New Trade Descriptions Act 2011
The Trade Descriptions Act 2011 (TDA 2011) was passed by the Malaysian parliament and published on August 18, 2011.
It is presently anticipated to come into force in January 2012 and repeals the old Trade Descriptions Act 1972 (TDA 1972). The TDA 2011, like its predecessor, aims to promote good trade practices in the market. However, the TDA 2011 is now much wider in scope—some key amendments are highlighted below.
Trade Descriptions Order
The TDA 1972 offered a unique intellectual property enforcement tool, known as the Trade Descriptions Order (TDO), which entitles trademark owners (registered and/or common law proprietors) to apply for a declaratory court order from the Malaysian High Court declaring a particular infringing trademark or get-up used by an infringer as amounting to a false trade description.
The TDO empowered the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) to take criminal action against the infringer upon lodgement of an official complaint and the TDO by the trademark owner. The TDO is commonly used in Malaysia as a powerful quasi-criminal instrument to prompt enforcement actions by the MDTCC.
"THE TDA 2011 INTRODUCES PROVISIONS AS TO THE USE OF FALSE AND MISLEADING STATEMENTS IN ADVERTISEMENTS AND CONTESTS."
Two amendments in the TDA 2011 will dilute the usefulness of the TDO: (i) only registered proprietors of trademarks in Malaysia will be able to apply for a TDO; and (ii) the validity of a TDO has now been reduced from five years to one year.
In effect, trademark owners who have not registered their marks in Malaysia but have prior goodwill and reputation will not be able to enforce their common law rights through a TDO.
These trademark owners will still be able to bring a civil action for passing off against infringers but civil proceedings are more costly and protracted as opposed to criminal enforcement by the MDTCC. Trademark owners must, therefore, ensure that their marks are registered in Malaysia.
Further, the reduced validity of a TDO may not afford sufficient time to plan and execute enforcement actions effectively. Note, however, that the TDA 2011 permits the court to renew the validity of a TDO upon its expiry for a further period as may be determined by the court. Yet, this would entail the incurrence of time and cost on the part of the trademark owner.
False or misleading statements
The TDA 2011 introduces provisions as to the use of false and misleading statements in advertisements and contests. The following are now offences under the TDA 2011:
