KUALA LUMPUR (May 7): Power Root Bhd's subsidiaries have successfully recovered trademark of its own “Ah Huat” brand for coffee and tea beverages, after reaching an amicable out-of-court settlement with its Indonesian distributor CV Ego Sun Star Sukses Mandiri (CV Ego) following an infringement wrangle that started in 2013.
Power Root has settled the legal dispute by paying a total RM1.27 million to CV Ego in order to reclaim the brand.
According to a filing with Bursa Malaysia, the settlement agreement entails that CV Ego recognises and acknowledges Power Root (M) Sdn Bhd’s (PRM) ownership and rights of the "Ah Huat" trademark that have been used, filed and registered worldwide by PRM and its subsidiaries from April 25, 2012. CV Ego shall then discontinue the use in any manner of the "Ah Huat" trademark.
In return, Power Root's subsidiaries will provide a consideration of IDR725 million (equivalent to approximately RM213,000) to CV Ego, setting aside the verdict granted previously by the Central Jakarta Commercial Court (CJCC) for IDR74.5 billion (equivalent to approximately RM23.7 million) against Power Root Manufacturing Sdn Bhd and Power Root Marketing Sdn Bhd on Nov 15, 2023.
Besides that, the parties also entered into a trademark assignment agreement whereby CV Ego will transfer its "Ah Huat" trademark registered with the Indonesian Director-General of Intellectual Property to PRM for a total consideration of IDR4.28 billion (equivalent to approximately RM1.26 million).
The trademark assignment agreement is expected to be completed by the end of July 2024.
To recap, Power Root on Jan 3 said two of its subsidiaries — Power Root Manufacturing and Power Root Marketing — had been hit with a claim by CV Ego for damages totalling IDR74.5 billion for trademark infringement, with a verdict was granted by the Commercial Court in favour of CV Ego on Nov 15, 2023.
However, Power Root said procedural requirements for the claim were not fulfilled, as neither Power Root Manufacturing nor Power Root Marketing had received any written notification or court document about the claim prior to that, so they did not have the opportunity to attend to, and were not represented, at court proceedings.
As such, Power Root said it had strong grounds to appeal against the decision.
According to Power Root, the case started in January last year, when PRM commenced legal action against CV Ego and Lim Kok Kiong, an Indonesian citizen, to cancel the “Ah Huat” trademark that Lim had registered with the Indonesian Director-General of Intellectual Property on Feb 21, 2013 — just a day prior to CV Ego's official appointment as Power Root's distributor for Indonesia. This trademark registration was subsequently transferred to CV Ego on April 4, 2022.
In response to the trademark cancellation, CV Ego filed the first RM23 million trademark infringement lawsuit against Power Root's Indonesian subsidiary PT Natbio Marketing Indonesia.
This lawsuit was later dismissed by the Indonesian Commercial Court on grounds that the Power Root group had first filed the “Ah Huat” trademark in Malaysia on April 25, 2012, as well as in several other countries such as Taiwan, Australia and Japan.
Shares of Power Root gained one sen to RM1.81 on Tuesday, for a market capitalisation of RM836.55 million. Over the past year, the stock has dropped 32 sen, or 15.02%.