Patent enforcement proceedings

Lawsuits and courts

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

Patent rights are only enforceable by the patent owner by way of a civil action. There are presently no administrative proceedings available for the enforcement of patent rights.

There is a specialised Intellectual Property High Court in Kuala Lumpur and most civil actions for patent infringement are filed here. However, there is no legal prohibition for a patent owner to institute a civil action in high courts in other states of Malaysia if the parties reside outside Kuala Lumpur.

Trial format and timing

What is the format of a patent infringement trial?

The format of a patent infringement trial is the same as any general civil suit trial. Due to the nature of patent infringement, where substantial dispute as to facts is inevitable, a civil action is generally brought by way of a writ of summons together with a statement of claim setting out the material facts of the claim and the remedies sought. Malaysia adopts the common law system of pleadings where the parties are required to exchange pleadings within the prescribed time frame. After being served with the statement of claim, the defendant must file his or her defence and counterclaim (if any) within the prescribed period, followed by a reply by the plaintiff if necessary. Where the defendant disputes the validity of the patent, he or she must include the particulars of objections, setting out the grounds of objections clearly in his or her defence.

There is no trial by affidavit in Malaysia. Parties are required to prove their case by calling witnesses who state their cases in the first stage of trial, namely examination in chief, by way of written witness statements. However, all witnesses must be present in court during the trial for cross-examination.

Experts are invariably called to assist the court during a patent suit. In fact, expert opinions on the issues of novelty and inventive steps are indispensable in a patent trial.

Malaysia does not have a jury system, hence disputed issues are decided by a judge (or judges). A trial will typically last between one and two weeks, depending on the complexity of the matter and the issues in dispute.

Proof requirements

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

The burden of proof in a patent infringement suit is the civil burden of balance of probabilities. This same burden of proof applies to the issues of infringement, invalidation and unenforceability.

In order to make out a case for infringement, the following need to be proved:

  • that each and every essential integer or feature of the plaintiff’s patented claim is taken by the defendants; and
  • the defendants’ product works the same way as the plaintiff claims in his or her patent.
Standing to sue

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

The owner of the patent (section 59, Patents Act 1983), licensee and beneficiary of the compulsory licence (section 61, Patents Act 1983) have the right to sue for patent infringement.

 

The issue of the right of a licensee to bring an infringement action was discussed in a recent decision of the IP High Court of Kuala Lumpur, Kingtime International Ltd & Anor v Petrofac E&C Sdn Bhd [2018] MLJU 1840. In this case, the second plaintiff was a licensee of the first plaintiff. The defendant challenged the right of the licensee to be named as a co-plaintiff in a patent infringement action. The High Court agreed with the challenge and held that the licensee’s right to sue is only applicable in two limited circumstances stipulated in section 61 of Patents Act 1983, namely:

  • If three months upon receipt of the request from the licensee to file a patent infringement action, the owner of the patent has refused to do so or failed to do so; or
  • if the licensee is able to prove that immediate action is required to avoid damage to the patent licensee, the licensee may apply for an injunction to restrain a patent infringement.

 

The court decided that based on the facts of the case, the second plaintiff had no right to file a patent infringement action against the defendant as the first plaintiff had already filed the action.

 

An accused infringer can bring a lawsuit against the owner of the patent to obtain a declaration from the court that committing the act in question does not constitute an infringement of the patent. However, if the act in question is already the subject of an infringement action, and the accused infringer is already a defendant to that suit, the claim for a declaration of non-infringement is not allowed (section 62 PA). An accused infringer can also bring a lawsuit against the owner of the patent for the invalidation of the patent (section 56 PA). 

Inducement, and contributory and multiple party infringement

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

There is no provision for indirect or contributory infringement under the PA. In order to prove infringement, as mentioned above, each and every essential integer or feature claimed by the patented invention must be present in the defendant’s product or process. In a process or method patent, the defendant must be shown to have taken every step of the patented process. Thus, it is not possible to make the defendants jointly liable if they merely carried out part of the patented claim.

However, it is possible to sue based on the tort of conspiracy to injure, if the parties are acting in concert to injure the interests of the plaintiff.

Joinder of multiple defendants

Can multiple parties be joined as defendants in the same lawsuit? If so, what are the requirements? Must all of the defendants be accused of infringing all of the same patents?

Multiple parties can be joined as defendants in the same lawsuit with the leave of the court or if separate actions are brought against each of the defendants, where there are some common questions of law or fact that would arise in all the actions, and all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions (see Order 15 rule 4 Rules of Court 2012 (ROC 2012)).

Because of the requirement of commonality of issues of law and fact, it appears that all of the defendants have to be accused of infringing all of the same patents. Where it appears to the court that the joinder of causes of action or of parties may embarrass or delay the trial or is otherwise inconvenient, the court may order separate trials or make such order as may be expedient (see Order 15 rule 5 ROC 2012).

Infringement by foreign activities

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

Only committing an infringing act within Malaysia would constitute an act of patent infringement (see section 58 PA).

Infringement by equivalents

To what extent can ‘equivalents’ of the claimed subject matter be shown to infringe?

The court does recognise infringement by way of the ‘equivalents’ of the claimed subject matter. An assessment of the same would be done by way of a purposive interpretation of the claim set out in the widely accepted case of Catnic Components Ltd v Hill and Smith Ltd [1982] RPC 183. This approach has been accepted in the Court of Appeal’s decision of Cadware Sdn Bhd v Ronic Corporation [2013] 6 MLJ 19 where the Court of Appeal adopted the purposive construction doctrine laid down in the Catnic case as well as applying the Improver test (as expounded in the case of Improver Corpn v Remington Consumer Products Ltd [1990] FSR 181) when considering whether there is infringement of patent.

Related to the issue of infringement by equivalents is the issue of how Malaysian courts decide on whether there is a patent infringement. The Malaysian courts have adopted a combination of tests in determining whether there is an infringement of a patent. This is evident from the decision of the High Court in Kingtime International Ltd & Anor v Petrofac E&C Sdn Bhd [2018] MLJU 1840. The learned judge considered three tests:

  • the ‘Essential Integers’ test (as propounded in the UK House of Lords case of Rodi & Wienenberger AG v Henry Showell Ltd [1969] RPC 367;
  • the Improver test (as propounded in the UK High Court case of Improver Corp & Ors v Remington Consumer Products Ltd & Ors [1990] FSR 181); and
  •  the Actavis test, as propounded in the UK Supreme Court case of Actavis UK Ltd & Ors v Eli Lilly and Co, and other appeals [2018] 1 All ER 171, which reformulated the Improver test.

 

Applying all three approaches, the court found that the defendant has infringed the plaintiff’s patents.

Kingtime was the first Malaysian court decision to adopt the Actavis test. Subsequently, the following two High Court decisions have adopted the Actavis test: Mohammad Mubde Absi & Ors v Hyat Collections Sdn Bhd & Ors [2019] MLJU 1355 and Emerico Sdn Bhd v Maxvigo Solution Sdn Bhd [2020] MLJU 340.

Discovery of evidence

What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

Discovery of evidence is limited to the issues that had been raised by the particulars of infringement and particulars of objection to the validity of the patent (in a counterclaim). This may be done through the processes of discovery of documents or by interrogatories.

The Court may at any time order any party to a cause or matter to give discovery by making and serving on any other party a list of the documents that are or have been in his or her possession, custody or power, and may at the same time or subsequently also order him or her to file an affidavit verifying such a list and to serve a copy thereof on the other party. The documents where discovery may be ordered include documents on which the party relies or will rely; documents that would adversely affect his or her own case; adversely affect another party’s case; or support another party’s case (see Order 24 Rule 3 ROC 2012).

Where discovery is by way of interrogatories, a party to any cause or matter may apply to the court for an order giving the party leave to serve on any other party interrogatories relating to any matter in question between the applicant and the other party in the cause or matter and requiring that other party to answer the interrogatories on affidavit within a specific period of time, which shall not be less than 14 days from the date of service of the interrogatories (see Order 26 Rule 1 ROC 2012).

Litigation timetable

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

Depending on the complexity of the matter, a patent infringement lawsuit typically takes about nine to 18 months for the decision of first instance to be handed down. Proceedings in the appellate court may take about six to 12 months.

Litigation costs

What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal? Are contingency fees permitted?

The costs of a patent infringement suit are dependent on many factors, primarily the law firms and legal personnel involved, the complexity of issues involved and the time taken in prosecuting the case. The costs of the expert may be significant as well and vary from one case to another.

A typical range of legal costs of a patent infringement lawsuit is approximately as follows:

  • pre-trial costs, which will include the settling of pleadings, case management, preparation for trial (eg, preparation of witness statements and expert reports), but excluding interlocutory applications such as application for injunction: 150,000 to 300,000 ringgit;
  • trial proper: 200,000 to 500,000 ringgit for a three-to-five day trial and the preparation of written submissions; and
  • appeal (to the Court of Appeal): 100,000 to 250,000 ringgit.

 

Contingency fees are prohibited under the Legal Profession Act 1976.

Court appeals

What avenues of appeal are available following an adverse decision in a patent infringement lawsuit? Is new evidence allowed at the appellate stage?

A patent infringement lawsuit, which invariably includes a claim for permanent injunction, must be brought in the High Court. An appeal from the High Court can be made to the Court of Appeal as of right. There is a second chance for appeal to the apex court, namely the Federal Court. However, an appeal to the Federal Court is not automatic. The would-be appellant must first obtain leave from the Federal Court. Leave will be granted if there is a question of law that is of general application and not previously decided by the Federal Court or, alternatively, if it is a question of importance upon which further argument and decision of the Federal Court would be to public advantage. In the Federal Court decision of Spind Malaysia Sdn Bhd v Justrade Marketing Sdn Bhd and Anor [2018] 4 MLJ 34, the apex court of Malaysia held that the appeal should be confined only to the questions of law as determined by the Federal Court and other grounds which are necessary to decide on those questions.

New evidence is not allowed at the appellate stage, unless the Court is satisfied that the new evidence was not available to the party previously or reasonable diligence would not have made it so available, and the new evidence, if true, can reasonably be assumed to have had a determining influence upon the decision of the High Court.

Competition considerations

To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition, or a business-related tort?

A patent owner is granted the exclusive rights to ‘exploit’ the patented invention, to assign or transmit the patent, and to conclude licence contracts.

‘Exploitation’ of a patented invention is defined to include, among other things, the making, selling or using the patented product. Besides that, the owner of a patent is expressly given the right to institute court proceedings against any person who has infringed or is infringing his or her patent.

In enforcing a patent by way of infringement action, there is generally no risk of being liable for unfair competition or any tortious liability except when a case for ‘unlawful interference with trade’ is made out. The essential requirement for unlawful interference is that the claimant must prove ‘a deliberate interference with the claimant’s interests by unlawful means’. Case law has established that to enforce an IP right, even if the same is subsequently invalidated, is generally not to be regarded as unlawful. In view of this, it is generally believed that a claim for unlawful interference is hard to maintain based solely on the institution of an infringement action.

In enforcing a patent by way of concluding licence contracts or other agreements, a patent owner may be liable if the following two broad circumstances are proved:

  • if the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services; or
  • if the patent owner is engaging in, whether independently or collectively in any conduct that amounts to an abuse of a dominant position in any market for goods or services.

 

The above-mentioned dual prohibitions of anticompetitive conduct are clearly provided under the Malaysian Competition Act 2010 (CA 2010), which came into force on 1 January 2012. However, there is an express exception laid down in the CA 2010 whereby it is clearly stated that the prohibition against abuse of dominant position does not apply to the relevant enterprise in a dominant position in ‘taking any step which has reasonable commercial justification or represents a reasonable commercial response to the market entry or market conduct of a competitor’ (section 10(3) of CA 2010).

Recognising the need to address the increasing tension between the protection of intellectual property (IP) rights and anticompetitive conduct, the Malaysian Competition Commission (MyCC), a statutory body that is empowered to implement and enforce the provisions of the CA 2010, introduced the Guidelines on Intellectual Property Rights and Competition Law (the Guidelines) on 6 April 2019. The Guidelines outline some approaches adopted by the MyCC with respect to any competition issues under the CA 2010 relating to IP rights. The Guidelines, among others, address the interaction between IP rights and competition law and offer some guidance for acceptable contractual arrangements involving IP rights. Intellectual property owners, especially patent owners, may refer to the Guidelines to ascertain the scope of their IP rights and to protect themselves against anticompetitive activities.

Alternative dispute resolution

To what extent are alternative dispute resolution techniques available to resolve patent disputes?

The court will generally propose the option of mediation during the stage of pre-trial case management. Mediation may be carried out in the following ways:

  • by way of a judge-led mediation;
  • by way of a mediation to be carried out at the Asian International Arbitration Centre;
  • by way of a mediation to be carried out at the Malaysian Mediation Centre; or
  • by other mediators agreeable by both parties.

On 30 June 2016 the Chief Justice of Malaysia issued Practice Direction No. 4 of 2016 (Practice Direction on Mediation), directing that all judges of the High Court and the deputy registrars and all judges of the Sessions Court and magistrates and their assistant registrars may, at the pre-trial case management stage, give such directions that the parties facilitate the settlement of the matter before the court by way of mediation. IP cases are listed as examples of cases that are easy to settle by mediation. In practice, mediation of a patent lawsuit rarely happens, possibly because the issue of infringement is normally keenly contested and it is factually and legally complex.

Scope and ownership of patents

Types of protectable inventions

Can a patent be obtained to cover any type of invention, including software, business methods and medical procedures?

An invention is only patentable if it is new, involves an inventive step and is industrially applicable (see section 11 PA). An invention is regarded as ‘new’ if it is not anticipated by ‘prior art’ and ‘prior art’ is defined to mean everything disclosed to the public anywhere in the world by written publication, by oral disclosure, by use or in any other way, prior to the priority date of the patent application claiming the invention.

However, the following are excluded as patentable subject matters:

  • discoveries, scientific theories and mathematical methods;
  • plant or animal varieties or essentially biological processes for the production of plants or animals, other than man-made living microorganisms, microbiological processes and the products of such microorganism processes;
  • schemes, rules or methods for doing business, performing purely mental acts or playing games; and
  • methods for the treatment of human or animal body by surgery or therapy, and diagnostic methods practised on the human or animal body.

 

This does not include products used on any such methods (see section 13 PA). Based on the above, business methods and medical procedures are not patentable subject matters. Although software is not specifically mentioned, the Guidelines for Patent Examination Manual issued by the Intellectual Property Corporation of Malaysia state that a computer program by itself or as a record on a carrier is not patentable, irrespective of its contents. The situation does not change when the computer program is loaded into a known computer. The computer program will, however, qualify for patentability when the subject matter as claimed makes a technical contribution to the prior art.

Patent ownership

Who owns the patent on an invention made by a company employee, an independent contractor, multiple inventors or a joint venture? How is patent ownership officially recorded and transferred?

An invention made by an employee or pursuant to a commission shall be deemed to accrue to the employer or the person who commissioned the work in the absence of any provisions to the contrary in the contract of employment or for the execution of the work (see section 20 PA). Thus, if an independent contractor is engaged to research and come up with a new invention, and there is no express reservation of rights, the rights to the invention will be deemed accrued to the person engaging him or her.

Generally, the rights to a patent shall belong to the inventor. Where there are multiple inventors, the rights to the patent shall belong to them jointly (see section 18 PA).

A patent may be assigned or transmitted. Such assignment or transmission must be officially recorded and no such assignment or transmission shall have effect against third parties unless so recorded in the Register of Patents. Application to record an assignment or transmission must be effected by way of an application to the Registrar in the prescribed manner together with the payment of the prescribed fee. Further, in the case of an assignment, the application to record it must be accompanied by an assignment agreement signed by or on behalf of the contracting parties (see section 39 PA).

With regard to joint ownership of patents, it is clearly provided in the PA that in the absence of any agreement to the contrary between parties, such joint owners may separately assign or transmit their rights in the patent application or patent, among others (see section 40 PA).

Defences

Patent invalidity

How and on what grounds can the validity of a patent be challenged? Is there a special court or administrative tribunal in which to do this?

The validity of a patent can be challenged through an application by an aggrieved person for the invalidation of the patent. The application must be made with the High Court. The High Court will invalidate a patent upon proof of any of the following grounds:

  • that what is claimed as an invention in the patent is not an idea that permits, in practice, the solution to a specific problem in the field of technology, or is excluded from protection as it:
    • falls under the category of non-patentable inventions;
    • is contrary to public order or morality;
    • is not patentable because it does not comply with the requirements of being a new invention involving an inventive step, that is industrial applications;
  • that the description or the claim does not comply with the prescribed requirements for application, particularly on the issue of sufficiency of disclosure of the invention;
  •  that any drawings that are necessary for the understanding of the claimed invention have not been supplied;
  • that the right to the patent does not belong to the person to whom the patent was granted; or
  •  that incomplete or incorrect information has been deliberately provided or caused to be provided to the Registrar at the time of filing a request for a substantive examination by the person to whom the patent was granted or by his or her agent (see section 56 PA).

 

There is an Intellectual Property High Court established in Kuala Lumpur. However, it is not the only court with the sole jurisdiction where an action for invalidation must be filed. In fact, all civil High Courts in Malaysia are seised with jurisdiction to hear injunction applications as well as any disputes over granted patents. There is, however, no administrative tribunal empowered to hear disputes involving the validity of patents.

One of the vexed issues related to the issue of proof of infringement and invalidity is whether there is a necessity to examine the validity of the dependent claims when the independent claim is found to be invalid. The issue arose because of the decision of the apex court in SKB Shutters Manufacturing Sdn Bhd v Seng Kong Shutters Industries Sdn Bhd & Anor [2015] 6 MLJ 293 (SKB Shutters), which ruled that once an independent claim is shown to be invalid, the dependent claims will fall automatically. Fortunately, this issue has been clarified by another apex court decision in Merck Sharp & Dohme Corp & Anor v Hovid Bhd [2019] 12 MLJ 66; [2019] 9 CLJ 1. The facts of this case were not out of the ordinary. It was a standard infringement action with an expected counterclaim to invalidate the subject patent.

The plaintiffs, Merch Sharp & Dohme Corp and its related companies (the appellants in the appeal) brought a suit against the Malaysian defendant (the respondent) for the infringement of Malaysian Patent No. MY–118194–A (194 Patent). The invention related to the use of a pharmaceutically acceptable salt (alendronate) as a medicament for inhibiting bone resorption in humans. The 194 Patent comprised of one independent claim (claim 1) and 21 dependent claims. The defendant denied the alleged infringement and counterclaimed for a declaration that the 194 Patent was invalid.

The High Court dismissed the plaintiffs’ infringement claim against the defendant and allowed the latter’s counterclaim for invalidation of the 194 Patent. The High Court declared that the 194 Patent was invalid on the ground of obviousness and went on to hold that all dependent claims related to the 194 Patent fell as the independent claim was invalid. The plaintiffs’ appeal to the Court of Appeal was dismissed unanimously.

The dismissal led to the present appeal before the apex court of Malaysia, the Federal Court. The issues posed before the Federal Court were whether the dependent claims would automatically be rendered invalid following the invalidation of the independent claim, without the need for the court to consider separately the validity of each and every dependent claim, as held in SKB Shutters.

The Federal Court in a three-to-two majority ruled that each dependent claim must be assessed separately and would not automatically fall merely on the finding that the independent claim is invalid.

In arriving at its decision, the Federal Court categorised dependent claims into two types:

  • type 1: dependent claims that are subsets of a broad and general independent claim; and
  • type 2: dependent claims that refer to an independent claim but include additional features not in the independent claim.

 

If the dependent claims are of type 1 and the basis of the challenge relates to the lack of an inventive step or novelty, the majority in the Federal Court explained that the invalidation of the independent claim may lead to the invalidation of the dependent claims. That invalidation is, however, not automatic and can only be declared after the trial court has heard and considered evidence to this effect with the assistance of a person skilled in the art.

For type 2 dependent claims and when the basis of challenge relates to prior art, upon the invalidation of an independent claim, the dependent claims must be treated separately to determine their validity as the dependent claim may have additional features that are not anticipated by the prior art.

On other bases of challenges in an invalidation action, for example insufficiency of disclosure and ambiguity, the court is required to undertake the evidential process to consider the language and structure of all claims in order to determine the scope and validity of each claim.

By construing sections 56(3), 57(2), and 79A(3) of the Patents Act 1983 together, the Federal Court further held that in the event of partial invalidity, an application to amend a dependent claim may be permitted during court proceedings and made after proceedings. This is to ensure that the invalidity of the independent claim would not affect all other dependent claims. Therefore, the conclusion drawn in SKB Shutters, namely that amendments under the Act were prohibited was not entirely accurate.

The issue of whether a defendant could be liable for infringing activities that took place before the actual grant of a patent was brought up in the recent case of Kingtime International Ltd & Anor v Petrofac E&C Sdn Bhd [2018] MLJU 1840. The relevant facts of the case were that the plaintiffs brought a suit against the defendant for infringement of claim 1 of Patent 898 as well as claims 1 and 13 of the Patent 5004. The two patents, are owned by Kingtime International Ltd (the first  plaintiff), while the second plaintiff, Gryphon Energy (Asia-Pacific) Sdn Bhd is a licensee of the first plaintiff. The defendant denied the alleged infringement and counterclaimed to invalidate the aforementioned claims.

The defendant raised the objection that it was not liable for patent infringement because the alleged infringement occurred before the grant of Patent 898 and Patent 5004. Disagreeing with the contention, the court relied on section 35(1) of the Act and held that the 20 years’ duration of the two patents took effect from the filing date of the applications and not from the date of grant.

During the course of the previous reporting year, there were another two cases from the High Court that dealt with issues of proof of infringement and grounds to challenge the validity of a patent. A short account of these cases is provided below.

Mohammad Mubde Absi & Ors v Hyat Collections Sdn Bhd & Ors [2019] MLJU 1355

This case concerns the patentability of an instant (ready-to-wear and pinless) hijab (headscarf) under the Patents Act 1983. The plaintiffs, who are the co-owners of Patent No. MY-153705-A in relation to a pre-wrapped headscarf known as Bokitta Hijab (Patent 705), commenced action against the Defendants for infringing Patent 705 by distributing and selling their own product the Hyat Hijab). The defendants counterclaimed to invalidate Patent 705 on several grounds, including Patent 705’s lack of novelty and inventive step.

In assessing the validity of Patent 705, the High Court held that the ready-to-wear and pinless headscarf is an ‘invention’ within the literal meaning of section 12(1) of the Act. In this regard, the Court stated that the term ‘technology’ in that provision has a wide meaning and encompasses ideas regarding ready-to-wear and pinless hijabs. Patent 705 further provides a solution to the problems arising from traditional hijabs that require a longer time to wear, more amount of fabric and the usage of pins to secure the scarf.

The High Court also held that the invention of the Bokitta Hijab is novel within the meaning of section 14(1) of the Act for the following reasons:

  • There is no evidence that the essential integers reflected in claim 1 of Patent 705 were publicly known or available before the filing date of Patent 705. Such prior evidence is referred to as prior art.
  • There is no evidence that a person skilled in the art is able to design the Bokitta Hijab based on prior art.
  • Applying the ‘reverse infringement test’, there is no proof that any prior art would constitute an infringement of Patent 705.

 

The court was also satisfied that the Bokitta Hijab involves an inventive step pursuant to section 15(1) of the Act by applying the four-step test laid down in the UK Court of Appeal case of Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59. The defendants have therefore failed to discharge the burden under section 56(1) of the Act to prove that the claims in the Patent 705 lack novelty and inventive step. The defendants’ counterclaim was dismissed.

On the issue of infringement, the court found that the defendants’ Hyat Hijab infringed Patent 705 as it contains all the essential integers of the relevant claims of Patent 705 (ie, the Essential Integers test). In arriving at its decision, the court has also applied the Improver test as well as the Actavis test.

Emerico Sdn Bhd v Maxvigo Solution Sdn Bhd [2020] MLJU 340

The plaintiff brought a suit against the defendant for infringement of a utility innovation, namely No. MY-163605A (UI) in respect of a notepad protective sleeve. The plaintiff is the owner of the UI, while the Defendant manufactures notepad protective sleeve products known as ‘SMARTPAD’ and ‘MAT’ (the infringing products). The defendant denied the alleged infringement and counterclaimed to invalidate the UI. The defendant contended that the registration of the UI did not comply with procedural requirements and the UI was not novel.

The High Court held among other things that section 56 of the Patents Act 1983 provided for five distinct statutory grounds to invalidate a utility innovation. Given that procedural non-compliance is not expressly covered by section 56 of the Act, the defendant’s contention that the UI was invalid on that ground was unsustainable. In any event, the plaintiff’s application for division of its original patent application and conversion to a utility innovation were both filed within time and complied with the procedural time frame. The court also held that the Defendant’s expert witnesses lacked independence and thus, their evidence was treated with circumspection particularly when they varied with the opinion of the plaintiff’s expert witnesses; and the UI was novel as it was not anticipated by any prior art. Thus, the defendant’s counterclaim was dismissed. On the issues of infringement, the court held that the infringing products incorporated each and every claim feature and integer of the UI’s claim. Accordingly, the defendant had infringed the UI. In arriving at its decision, the court has applied the Actavis test.

Absolute novelty requirement

Is there an ‘absolute novelty’ requirement for patentability, and if so, are there any exceptions?

Yes, Malaysia practises an ‘absolute novelty’ requirement for patentability. The only exception where a disclosure may be disregarded is where:

  • such a disclosure occurred within one year preceding the date of the patent application, and if it was by reason or in consequence of acts committed by the applicant or his or her predecessor in title;
  • such a disclosure occurred within one year preceding the date of the patent application and if it was by reason or in consequence of any abuse of the rights of the applicant or his or her predecessor in title; and
  • such a disclosure is by way of a pending application to register the patent in the UK Patent Office as at the date the PA came into force (see section 14 PA).
Obviousness or inventiveness test

What is the legal standard for determining whether a patent is ‘obvious’ or ‘inventive’ in view of the prior art?

An invention is considered as involving an inventive step where, having regard to any matter that forms part of the prior art, such an inventive step would not have been obvious to a person having ordinary skill in the art (see section 15 PA). The test to apply to determine whether an invention lacks inventive step (or is obvious) or not is set out in the case of Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 (Windsurfing test), which is to:

  • identify the inventive concept embodied in the patent in suit;
  • the court has to assume the mantle of the normally skilled but unimaginative addressee in the art at the priority date and to impute to him or her what was, at that date, common general knowledge in the art in question;
  • identify what, if any, differences exist between the matter cited as being ‘known or used’ and the alleged invention; and
  • the court has to ask itself whether, viewed without any knowledge of the alleged invention, those differences constitute steps that would have been obvious to the skilled man or if they require any degree of invention.

 

The Windsurfing test has been adopted by Malaysian courts in, among others, the court of appeal decision of Seng Kong Shutter Industries Sdn Bhd & Anor v SKB Shutters Manufacturing Sdn Bhd [2014] 5 MLJ 98; [2014] 4 CLJ 1037; the Federal Court decisions of Spind Malaysia Sdn Bhd v Justrade Marketing Sdn Bhd and Anor [2018] 4 MLJ 34; [2018] 4 CLJ 705 and Merck Sharp & Dohme Corp & Anor v Hovid Bhd [2019] 12 MLJ 66; [2019] 9 CLJ 1. 

Patent unenforceability

Are there any grounds on which an otherwise valid patent can be deemed unenforceable owing to misconduct by the inventors or the patent owner, or for some other reason?

Except for the provisions for invalidation of a granted patent (and probably on grounds of public order and morality), there is no statutory provision that may be relied upon to render a granted patent unenforceable. In fact, section 31 PA clearly provides that even if the performance of any act in respect of a claimed invention is prohibited by any law or regulation, the patent shall not be invalidated ipso facto.

Prior user defence

Is it a defence if an accused infringer has been privately using the accused method or device prior to the filing date or publication date of the patent? If so, does the defence cover all types of inventions? Is the defence limited to commercial uses?

Prior use as a defence is clearly provided under the Patents Act. However, it is provided that the use must be in good faith in Malaysia at the priority date. The element of good faith is an indispensable requirement for the defence. Such rights of prior use, however, cannot be assigned or transmitted, except as part of the business of the person concerned (see section 38 PA). It appears that there is no limitation on the type of invention or that the use must be confined to commercial uses. In any event, the right of a patent owner does not include the right to stop anyone from uses in respect of scientific research (see section 37 PA).

Remedies

Monetary remedies for infringement

What monetary remedies are available against a patent infringer? When do damages start to accrue? Do damage awards tend to be nominal, provide fair compensation or be punitive in nature? How are royalties calculated?

Upon a successful claim against a patent infringer, the court may award monetary remedies in the form of an account of profits or damages. Account of profits is not awarded as of right. There must be some justification, such as on equitable grounds, for the court to order an account for profit. The court will also award reasonable costs against the patent infringer. Damages are at large and normally cover three types: loss of business profits, loss of opportunity and damage to goodwill. Damages start to accrue from the first date of infringement that is proven. The burden is upon the plaintiff to prove its losses. Damages are generally compensatory and not punitive in nature. There are two broad bases for assessing damages: upon the proof of loss of business profit, and on a royalty basis (if the patent owner is customarily in the business of granting licences). There is no fixed method for calculating royalties; it is a matter of contractual agreement between a licensor and licensee.

Injunctions against infringement

To what extent is it possible to obtain a temporary injunction or a final injunction against future infringement? Is an injunction effective against the infringer’s suppliers or customers?

Interlocutory injunctions and final injunctions are possible remedies to be obtained against future infringements. The courts are generally less inclined to grant an interlocutory injunction pending trial due to the severe implications the injunction may have on the business of the defendant unless the principles expounded in the case of American Cynamid Co v Ethicon Ltd [1975] AC 369 are clearly established. The requirements for a grant of an interlocutory injunction are as follows:

  • there are bona fide issues to be tried;
  • the balance of convenience is in favour of the applicant for injunction;
  • there is an undertaking as to damages by the plaintiff; and
  • damages are not an adequate remedy.

 

An injunction is not applicable against the infringer’s suppliers or customers, unless an application is made to join them as parties to the injunction application.

Banning importation of infringing products

To what extent is it possible to block the importation of infringing products into the country? Is there a specific tribunal or proceeding available to accomplish this?

There is presently no provision under the Patents Act 1983 to prevent the importation of infringing products into Malaysia. Parties who wish to do so would have to obtain a court order to be served on the customs officials.

Attorneys’ fees

Under what conditions can a successful litigant recover costs and attorneys’ fees?

The award of costs to a successful party is a matter of right. However, the amount of costs to be awarded is a matter within the discretion of the court. Attorney fees are normally not recoverable as cost per se. The costs awarded to the winning party may represent only part of the legal costs actually incurred.

Wilful infringement

Are additional remedies available against a deliberate or wilful infringer? If so, what is the test or standard to determine whether the infringement is deliberate? Are opinions of counsel used as a defence to a charge of wilful infringement?

There is no provision for additional remedies provided under the PA against a deliberate or wilful infringer.

Time limits for lawsuits

What is the time limit for seeking a remedy for patent infringement?

Five years from the act of infringement (section 59 PA).

Patent marking

Must a patent holder mark its patented products? If so, how must the marking be made? What are the consequences of failure to mark? What are the consequences of false patent marking?

There is no provision for patent marking in Malaysia. However, it is an offence to falsely represent that any product for sale is a patented product or process. Upon conviction, a person is liable to a fine not exceeding 15,000 ringgit or to imprisonment for a term not exceeding two years, or to both (see section 64 PA).

Licensing

Voluntary licensing

Are there any restrictions on the contractual terms by which a patent owner may license a patent?

Parties are generally free to decide on the terms of their licence agreements provided that they are in compliance with the general law relating to formation and legality of contracts and do not breach section 45 of the PA. Section 45 clearly states that any clause or condition in a licence contract shall be invalid in so far as it imposes upon the licensee, in an industrial or commercial field, restrictions not derived from the rights conferred under the Act on the owner of the patent, or unnecessary for the safeguarding of such rights. There is, currently, no case law that touches or expounds on this section. We believe one of the examples that may fall within the section 45 prohibition is the tying-in provision.

Compulsory licences

Are any mechanisms available to obtain a compulsory licence to a patent? How are the terms of such a licence determined?

The mechanism and conditions for securing a compulsory licence are laid down in sections 48 to 54 of the PA. The gist of these provisions is that any person, who made efforts to obtain authorisation from patent owners on reasonable commercial terms and conditions, but was unsuccessful within a reasonable time period, may apply to the Registrar for a compulsory licence any time after the expiration of three years from the grant of a patent or four years from the filing date of the patent application, whichever is later, under any of the following circumstances:

  • where there is no production of the patented product or application of the patented product or application of the patented process in Malaysia without any legitimate reason; or
  •    where there is no product produced in Malaysia under the patent for sale in any domestic market, or there are some but they are sold at unreasonably high prices, or do not meet the public demand without any legitimate reason.

 

The other ground upon which one may apply for compulsory licence is the so-called ‘interdependence of patents’ ground. This is when the invention claimed in a later patent cannot be used in Malaysia without infringing an earlier granted patent, but the invention claimed in the later patent constitutes, in the opinion of the Malaysian Intellectual Property Office (MyIPO), an important technical advance of considerable economic significance. In these cases MyIPO may grant a compulsory licence to the owner of the later patent when requested to the extent necessary to avoid infringement of the earlier patent.

When applying for a compulsory licence, the applicant shall set forth the amount of royalty, the conditions of the exploitation of the patent and the restrictions of the rights of the licensor or the licensee, as the case may be, and a request of the said licence.

The MyIPO shall fix the scope of the compulsory licence upon granting the same to specify, in particular: the period for which the licence is granted; the time limit within which the beneficiary of the compulsory licence shall begin to work the patented invention in Malaysia; and the amount and conditions of the royalty due from the beneficiary of the compulsory licence to the owner of the patent. 

Patent office proceedings

Patenting timetable and costs

How long does it typically take, and how much does it typically cost, to obtain a patent?

The timeline for securing a patent in Malaysian is dependent on the type of application filed. A straightforward local patent application or a Patent Cooperation Treaty national phase entry application with no objection will typically take four to six years from the Malaysian filing date to be granted.

The total estimated legal cost to obtain a straightforward local patent (with less than 10 claims) would be within the range of 5,000 to 7,000 ringgit.

The official filing fees to obtain a straightforward local patent (with less than 10 claims) from filing through to registration would be 1,550 ringgit (excluding professional fees service tax and disbursements). The official filing fees are provided on the MyIPO website at the following link: www.myipo.gov.my/en/patent-form-fees/?lang=en.

Expedited patent prosecution

Are there any procedures to expedite patent prosecution?

There are provisions for filing a request for an expedited examination of a patent application based on any of the following grounds:

  • it is in the national or public interest;
  • there are infringement proceedings taking place or evidence showing potential infringement with regard to the patent being applied;
  • the applicant has already commercialised the invention or plans to commercialise the invention within two years from the filing date of a request for expedited examination;
  • application for grant of the patent is a condition to obtain monetary benefits from the government or institutions recognised by the Registrar of Patents;
  • the invention relates to green technologies that will enhance the quality of the environment or conservation of energy resources; or
  • there are other reasonable grounds that support the request.

 

In addition, MyIPO has also launched a Patent Prosecution Highway (PPH) pilot program with the cooperation of the Japan Patent Office (JPO), European Patent Office (EPO) and China National Intellectual Property Administration (CNIPA). PPH is an initiative which provides a means to accelerate the examination of the application if the examination work has already been conducted by the above-mentioned patent offices. If the applicant has a corresponding application that has been found to be acceptable by the JPO, EPO or CNIPA, he or she may proceed to request for an accelerated examination under the PPH. There is no official fee prescribed for a PPH request.

Patent application contents

What must be disclosed or described about the invention in a patent application? Are there any particular guidelines that should be followed or pitfalls to avoid in deciding what to include in the application?

A patent application shall contain: a request for the grant of a patent; a description; a claim or claims; a drawing or drawings as required; and an abstract. It is further clearly provided that the descriptions shall, among other things, disclose the invention in such terms that it can be understood, and in a manner sufficiently clear and complete, for the invention to be evaluated and to be carried out by a person having ordinary skill in the art, and state any advantageous effects of the invention with reference to the background art.

In addition, the claims of the patent shall be clear and concise and fully supported by the description; and the number of the claims shall be reasonable taking into consideration the nature of the invention. Where the application contains drawings, the technical features mentioned in the claims shall, wherever possible, be followed by Arabic numerals to such features and placed between parentheses.

There are a number of standard application requirements, such as all application documents must be of a high enough quality as to allow direct reproduction by photography, electrostatic processes, photo offset and microfilming and shall be on white, matte, durable A4 paper (measuring 29.7cm x 21cm) .

There is also, however, a requirement imposed by the Malaysian Patents Regulations, that in the application, every fifth line of each sheet of the description and the claims shall be numbered in Arabic numerals placed to the left of the relevant lines but to the right of the margin.

Prior art disclosure obligations

Must an inventor disclose prior art to the patent office examiner?

There is no legal obligation to disclose the prior art to the patent office. However, it is a requirement imposed by the Regulations that the description of the patent shall indicate the background art, as far as is known to the applicant, which can be regarded as useful for the understanding, searching and examination of the invention; and, wherever possible, cite the document reflecting such art. It is understood that these requirements are merely advisory.

Pursuit of additional claims

May a patent applicant file one or more later applications to pursue additional claims to an invention disclosed in its earlier filed application? If so, what are the applicable requirements or limitations?

It is permissible for an applicant to file one or more ‘divisional applications’ to pursue additional claims to an invention disclosed in its earlier filed application provided that each divisional application shall not go beyond the disclosure in the initial application. This is the so-called ‘no added new matter’ limitation. Procedurally, in accordance with Regulation 19A of the Patents Regulations 1986, a voluntary request for divisional application must be filed within three months from the date of the mailing of the Examiner’s first report.

Patent office appeals

Is it possible to appeal an adverse decision by the patent office in a court of law?

Any person aggrieved by any decision or order of the Registrar may appeal to the court (see section 88 PA).

Oppositions or protests to patents

Does the patent office provide any mechanism for opposing the grant of a patent?

The Patent Office does not provide for any mechanism for opposing the grant of a patent in Malaysia. However, the Patent Office does accept observations made by any third parties.

Priority of invention

Does the patent office provide any mechanism for resolving priority disputes between different applicants for the same invention? What factors determine who has priority?

The Patent Office does not provide any mechanism for resolving priority disputes between different applicants for the same invention. The Malaysian Patent Office recognises the ‘first to file’ principle. The only way to resolve such disputes would be to file a civil suit seeking a declaration of right in the High Court or through voluntary arbitration proceedings between the parties.

Modification and re-examination of patents

Does the patent office provide procedures for modifying, re-examining or revoking a patent? May a court amend the patent claims during a lawsuit?

The Registrar may, upon an application made by the owner of a patent, amend the description, the claim or claims or the drawings of the patent, or amend any other document associated with the patent for the purpose of correcting a clerical error or an obvious mistake, or for any other reason acceptable to the Registrar. However, no amendment should be allowed if the amendment would have the effect of disclosing a matter that extends beyond that disclosed before the amendment or if the amendment would have the effect of extending the protection conferred at the time of the grant.

The Malaysian Patents Act does not have similar provisions to that in the UK, which allows a court to amend the patent claims during a lawsuit. It has, however, recently decided in the Federal Court case of Merck Sharp & Dohme Corp & Anor v Hovid Bhd [2019] 12 MLJ 66; [2019] 9 CLJ 1 that in the event of partial invalidity, an application to amend a dependent claim may be permitted during court proceedings, and made after proceedings. In another words, the Federal Court has in the Merck case overruled its previous decision of SKB Shutters Manufacturing Sdn Bhd v Seng Kong Shutter Industries Sdn Bhd & Anor [2015] 9 CLJ 406, which ruled that amendments of patent claims during a lawsuit were prohibited under PA.

Patent duration

How is the duration of patent protection determined?

The duration of the 20-year patent protection is determined from the filing date.

Update and trends

Key developments of the past year

What are the most significant developing or emerging trends in the country’s patent law?

Possible amendments to the Patents Act

The Intellectual Property Corporation of Malaysia (MyIPO) has, in the third quarter of 2019, held a consultation session with members of the industry and invited feedback on proposed amendments to the Patents Act 1983. Some of the proposed amendments include, among others, provisions allowing for the accession to the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure; incorporating article 31-bis of the TRIPS Agreement in respect of the grant of compulsory licences; allowing amendments of patents during court proceedings; allowing post-grant opposition; and concerning the monetisation and securitisation of patents.

Law stated date

Correct on

Give the date on which the information above is accurate.

30 April 2020.