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Last September the International Trademark Association (INTA) released the results of an impact study conducted by Frontier Economics across five major Association of Southeast Asian Nations economies, showing the correlation between trademarks and their economic contribution to the country’s gross domestic product (GDP), employment and share of exports.
Specifically, the data gathered was to illustrate how trademark activities by trademark-intensive industries contributed to technological innovation and international business growth. Trademark-intensive industries were defined as those which file more trademarks than others, with an above-average use of trademarks per employee.
Malaysia came in at a respectable second position with a 30.3% direct contribution to GDP, while indirect contributions stood at 60%.
Direct contributions were defined in terms of employment, output and value added generated by a particular trademark-intensive industry. Indirect contributions designate the interdependencies between the trademark intensive industries and non-intensive ones.
What this means is that the various trademark-intensive industries in Malaysia significantly promote their activities within the business communities, government and the consuming public, all of which led to immense cross-sectoral economic growth for the country. In tandem with this, a strong and earnest protection and enforcement programme as well as brand investment becomes important.
At the very least, this involves a coherent and strategic system of filing trademark applications and ensuring proper enforcement once registered.
A healthy interest
The Malaysian IP Office (MyIPO) 2017 statistics serve to underscore the results of the impact study. MyIPO received its highest number of trademark applications filed to date, with 41,093 new applications. This was a substantial 58% increase of applications filed within the last decade.
There is just a 10% variance between applications from foreign applicants (21,612) and those from local businesses and individuals (19,481). The healthy number of trademarks filed continues to indicate that Malaysia remains an attractive country to invest in, particularly for foreign brand owners confident in our country’s trademark system. It also indicates the increasing awareness of local companies on the importance of obtaining trademark protection.
Hand in glove with the above would be an effective enforcement procedure. Last year, the enforcement unit of the Malaysian Domestic Trade and Consumerism Ministry acted on almost 1,500 complaints lodged under the Trade Description Act and conducted various raids and seizures.
The most useful and effective tool under the act is the trade description order (TDO) made available to proprietors of registered trademarks. It is a court order that declares any infringing mark or get-up as a false trade description when applied to goods specified in the order and is a beneficial instrument for brand owners to use when necessary.
On the case law front, an interesting decision has been handed down at the Malaysian Federal Court, which is Malaysia’s apex judiciary court. The case of Low Chi Yong (t/a Reynox Fertichem Industries) v Low Chi Hong & Anor dealt with the issue of whether a registered proprietor was entitled to defend his statutory rights amid allegations of abandonment.
The trademark in question, ‘Reynox’, was initially filed by the appellant who is the first respondent’s brother and a shareholder of the second respondent. After the business relationship went south and the appellant left, he claimed trademark infringement and passing off.
The respondents counterclaimed that the appellant had consented to the use of the mark through his involvement with the second respondent and alleged an assignment of the registered mark did not follow through.
After sifting through the evidence and submissions from both parties, the Federal Court decided the appellant had exclusivity over the trademark as it was properly registered under his name. There was no dispute that consent was granted to the second respondent to distribute the goods but this was revoked when the appellant left the second respondent. The evidence also showed that he asserted his ownership by sending various notices to the respondents asking that they desist from using his registered mark.
"It has been an encouraging year for Malaysia on the trademarks front despite the fact that it still has not acceded to the Madrid Protocol."
In summary, it has been an encouraging year for Malaysia on the trademarks front despite the fact that it still has not acceded to the Madrid Protocol. It is hoped that the accession will finally come to fruition before the end of 2018.
Azlina Aisyah Khalid is the senior legal counsel (in-house) at Henry Goh and heads the prosecution unit of the trademarks department. She can be contacted at: email@example.com
Azlina Aisyah Khalid, Henry Goh, Low Chi Yong, Reynox Fertichem Industries, Malaysian Federal Court, Malaysian Domestic Trade and Consumerism Ministry