1 June 2010Jurisdiction reportsLim Eng Leong

IP law reforms on the horizon

Amongst the four main intellectual property acts in Malaysia, the trademark and copyright laws have not seen much action in terms of reform for more than half a decade. The Ministry of Domestic Trade, Cooperatives & Consumerism (MDTCC) has recently looked into reviewing all IP acts.

First on the list will be the Copyright Act 1987, which was last amended in October 2003. The Malaysian government is a strong proponent of an effective copyright regime that will assist creative industries: one of the keys to the country’s continuing economic growth.

The proposed amendments to the Copyright Act 1987 would address the rights of authors and performers, public policy, the powers of the copyright tribunal, Internet and technological development and enforcement-related issues, and the wide-ranging exceptions and limitations for private and educational purposes.

One controversial issue that may have an impact on the general Malaysian public is the proposed criminalisation of ownership of a single counterfeited item. For the average layman, this would mean owning a single pirated disc.

At present, possession of infringing copyrighted works is not an offence if it is proven that these are meant for private and domestic use. However, there is already a rebuttable presumption that if a person is in possession of three or more infringing copies, these are meant for import and not for private and domestic use. The proposed changes would mean liability for selling or buying infringing copies.

The ministry is also considering making owners of premises where counterfeiting takes place liable for copyright infringement by incorporating landlord liability.

On the trademarks front, there is strong will from trademark owners and the Malaysian Intellectual Property Corporation (MyIPO) to see the Trade Marks Act 1976 reformed and updated. It was last amended in 2003. MyIPO has indicated plans to include ‘non-traditional trademarks’ as trademarks that can be registered.

This proposal will be lauded, as non-traditional trademarks are already accepted in most countries. With the inclusion of non-traditional trademarks, an individual or business would be able to register sound, colour, smell, taste, texture and shape marks, or a combination of these elements.

"It is hoped that the border measure provisions in the Trade Marks Act will be given more bite by compelling the customs authorities to proactively monitor the flow of counterfeit trademark goods in and out of the country."

For practitioners, it is anticipated that the proposed amendments will include refinement of the examination procedures. We hope that objections will be carefully considered before being maintained and applicants being made to wait in a long line for a hearing before the examiner.

Once a refusal decision is issued, the grounds of the decision should be provided within a reasonable period so that the applicant can expeditiously file an appeal to the High Court if they wish. In order to ensure expediency, there ought to be some statutory timelines for each examination procedure.

It is hoped that the border measure provisions in the Trade Marks Act will be given more bite by compelling the customs authorities to proactively monitor the flow of counterfeit trademark goods in and out of the country. Relying on trademark owners to provide concrete evidence before action is taken can result in losses to the owners, since counterfeits can quickly make their way into the open market.

Foreign trademark owners would certainly love to see the Madrid Protocol provisions included, but to date, there is no confirmation that these will be incorporated into this round of amendments to the Trade Marks Act 1976. The government has said that it will listen to the views of legal experts, practitioners, industry and other stakeholders when pursuing these reforms.

It is expected that the amendments to the Copyright Act 1987 and the Industrial Designs Act 1996 will be tabled before the cabinet and discussed during the parliamentary sitting in June 2010, while changes to the Patents Act 1983 and Trade Marks Act 1976 are scheduled for the November session.

On the economic front, some encouraging incentives were announced in the recent Malaysian Budget 2010, including tax relief for companies that incur costs to register trademarks or patents in Malaysia. However, there are limitations on eligibility in terms of the size of the company and annual sales. Additionally, the relief does not cover industrial design registration.

There are also various grants available in the public and private sectors to spur the growth of R&D and creation of IP. However, as most funding currently favours patentable inventions, we foresee that there will be a demand for similar assistance for copyright and trademarks.

The effectiveness of the proposed reforms and incentives remains to be seen, but it is heartening to note that Malaysia has taken a step in the right direction. Any enhancement and fine-tweaking of the laws to fit the current global IP landscape will ultimately benefit our economy.

Lim Eng Leong is in-house legal counsel at Henry Goh & Co Sdn Bhd. He can be contacted at: engleong@henrygoh.com

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