By Khin Yupar

Can a trademark certificate erase a business that was there first?

Does registration guarantee exclusivity, or does the marketplace still have the final word?

Trademark registration is often perceived as the strongest shield in brand protection. To many businesses, securing a registration signals certainty, exclusivity and legal dominance. Yet the LA VILLA dispute in Malaysia is a timely reminder that trademark law is not built on paperwork alone, but on use, goodwill and commercial reality.

In Antara Holiday Villas Sdn Bhd v Tedulous Travel & Tours Sdn Bhd [2025] 11 MLJ 100, the Malaysian High Court decisively reaffirmed a foundational principle of Malaysian trademark law: in a first-to-use system, registration does not defeat earlier, genuine use. The case illustrates how registered rights can be invalidated where another party demonstrates prior use of the mark in the course of trade, particularly where goodwill and consumer association have already taken root.

Background of the Dispute

The dispute essentially involved a boutique villa operator seeking to protect its business identity against a larger, well-established hotel chain.

In July 2013, a boutique operator (the defendant) started an accommodation business in Langkawi with just 11 pool villas, branding it “LA VILLA”. Over time, the business gained recognition among local and international guests, building its reputation organically through online booking platforms and word-of-mouth.

Meanwhile, Holiday Villa (the plaintiff), a well-known hotel chain, began using the same name in 2014 for a poolside restaurant in Langkawi. The “LA VILLA” branding was later extended to other hospitality services and printed material. By 2019, the plaintiff had applied for six trademarks for “LA VILLA” which subsequently proceeded to registration.

Armed with these registrations, the plaintiff initiated legal proceedings, alleging that the defendant’s continued use of “LA VILLA” constituted trademark infringement.

The dispute raised deeper questions than infringement alone:

1. Whether the defendant had established prior use of the ‘LA VILLA’ mark in the course of trade
2. Whether the plaintiff’s six trademark registrations could survive in light of such prior rights
3. Whether the plaintiff’s use of the name amounted to passing off
4. Whether the defendant’s continued use of the mark constituted infringement

The Court’s Findings

The High Court ruled decisively in favor of the defendant:

1. [Prior Use Confirmed] The Court found that the defendant had been trading as “LA VILLA” since 2013, well before the plaintiff’s first use in 2014 and its subsequent registrations. In Malaysia, priority of use outweighs priority of filing, and the defendant had produced extensive documentary evidence namely, online listings, invoices, booking records and marketing materials to substantiate its claim.
2. [Registrations Invalidated] As the plaintiff’s registrations conflicted with the defendant’s earlier unregistered rights, all six “LA VILLA” trademarks were declared invalid. The trademark register, the Court made clear, is not a reset button for commercial history.
3. [Passing Off Established] The Court further held that the plaintiff’s adoption and expansion of the “LA VILLA” name was likely to mislead consumers into believing that its services were connected with, or endorsed by, the defendant. This amounted to passing off, as it risked appropriating the goodwill that the defendant had painstakingly built. Notably, the Court rejected the argument that the defendant’s alleged regulatory non-compliance (such as licensing issues) negated its goodwill. Trademark rights, the Court stressed, are governed by use and consumer perception, not by regulatory technicalities.
4. [No Infringement] With the plaintiff’s registrations invalidated, the infringement claims necessarily failed. Even if the registrations had remained intact, the defendant’s prior use would have provided a complete defense.

An Unequal Battle and a Judicial Rebuke

The Court did not ignore the imbalance of power between the parties. Despite its modest scale, the defendant was forced into costly litigation to defend a name it had used first. The High Court openly criticised this state of affairs, characterising the dispute as one of Goliath versus David, and ordering the plaintiff to pay RM100,000 in costs.

This aspect of the decision sends a strong message: trademark litigation should not be wielded as a commercial weapon against smaller players where prior rights are plainly evident.

The LA VILLA dispute underscores a fundamental truth about trademark law: a brand’s strength lies not merely in certificates, but in the goodwill and trust cultivated in the marketplace.

For businesses expanding their portfolios, the case raises an uncomfortable but necessary question: Is your trademark truly yours, or does someone else’s history stand in the way? For practitioners, it is a reminder that legal advice must look beyond the register and into commercial reality.

In a first-to-use system like Malaysia’s, registration is important, but it is not sovereign. A trademark is more than a legal formality. It is a story of use, reputation, and consumer connection. And as LA VILLA makes clear, the law will protect the party who wrote that story first.

Should you require assistance with your clients’ IP needs, please do not hesitate to contact us at hello@kass.asia!