An extract from The Intellectual Property Review, Edition 10

Recent developments

i PatentsMerck Sharp & Dohme Corp & Anor v. Hovid Bhd [2019] 12 MLJ 66

The Federal Court had to consider whether the adjudication of an independent claim as invalid would automatically render claims that were dependent on the independent claim as also invalid, without the need for the court to separately consider the validity of each and every dependent claim.

The Federal Court reversed its earlier decision in SKB Shutters Manufacturing Sdn Bhd v. Seng Kong Shutter Industries Sdn Bhd [2015] 6 MLJ 293, a rare feat undertaken by the Federal Court, and held that a dependent claim is no longer invalid merely on the finding that the claim on which it is dependent is held to be invalid. In this ruling, the majority of the panel felt it essential for the court to evidentially assess each and every claim in a patent (be they independent or dependent) disjunctively from one another. Otherwise, granted claims would not be accorded the due protection that they deserve under the PA 1983.

ii TrademarksTrademarks Act 2019

In 2019, Malaysia acceded to the Madrid Protocol. As a result, prospective trademark applicants may now utilise the streamlined process to file and protect their trademarks in over 120 countries or territories of the system by filing a single international application in one language and paying a single set of fees. To ensure compliance with this accession, the TMA 2019 came into force on 27 December 2019, bringing about an overhaul to the earlier Trade Marks Act 1976 (TMA 1976). Among the new introductions are:

  1. registration of non-traditional marks (sound, colour, shape, hologram, etc.);
  2. multi-class applications;
  3. divisions and merger of trademark applications and registrations;
  4. absolute and relative grounds of refusal;
  5. introduction of collective marks, and abolishment of defensive and associated trademarks;
  6. reduction in time to challenge registered marks;
  7. recognition of trademark as a form of security interest;
  8. licensing regime, abolishing the system of registered user under the TMA 1976;
  9. transactions such as assignment, licensing and grant of security interest of a trademark may be registered with the MyIPO;
  10. an expansion to the scope of trademark infringement and exemptions;
  11. additional grounds for revocation for non-use;
  12. consolidated provisions for criminal sanctions and enforcement; and
  13. additional powers to enforcement officers to enforce the TMA 2019.
Diesel SPA v. Bontton Sdn Bhd [2020] MLJU 715

The Court of Appeal had to consider, among other things, whether it may exercise its inherent discretion to make a Declaration of Non-Infringement (DNI) in the absence of infringement proceedings and whether the Court should grant recognition of trademark ownership to a party under the 'own-name doctrine'.

The Court of Appeal allowed the appeal and set aside the decision of the High Court in denying the declaration. The Court had favoured the submission that the own-name doctrine was enshrined within Section 40(1)(a) TMA 1976. It found that Section 40(1)(a) TMA 1976 contained clear wording that the use in good faith by a person of his or her own name or the name of his or her place of business or the name of the place of business of any of his or her predecessors in business does not constitute an act of infringement of a trademark. The grounds under Section 40(1)(a) were silent as to when and how the provision may be invoked, and this provided the court with the flexibility in applying the own-name doctrine. As it was proven that the appellant had a bona fide intention to use its own name as a mark, in the interests of justice, the Court granted the DNI.

iii Industrial designsCMN International Sdn Bhd & Ors v. Dart Industries Inc and another appeal [2020] MLJU 903

The Court of Appeal had to consider whether a sub-licensee had the right to bring proceedings for industrial design infringement against another person when he or she was not an exclusive licensee.

In the High Court, the learned judge held that the second plaintiff (sub-licensee of the first plaintiff) had no right to sue as, in order for a licensee to bring an action for design infringement, Section 33(4) of the IDA needs to be satisfied, which it had not, and the second plaintiff was estopped by its sub-licence from filing the suit. The learned judge made a comparison with Section 61 of the Patents Act 1983 and transposed its meaning on to Section 33(4).

The Court of Appeal set aside the High Court's decision. It held that the learned judge had erred in law to compare provisions of the IDA and PA and to impose the applicability of the latter's provisions on to the IDA. Section 61 PA expressly stated that the beneficiary was required to request the owner of the patent to bring infringement proceedings prior to itself filing the suit, Section 33(4) applied to owners of the RID and an 'owner' is stated to include a licensee. Thus, the second plaintiff had the requisite locus to sue under Section 33 of the IDA.

Trends and outlook

The Malaysian government has undertaken and continues to take active steps to establish the country as a leading example for intellectual property protection and enforcement both regionally and globally.

Beyond enforcement actions taken in the domestic markets by the MDTCA, in the absence of an official customs recordal system for trademarks, the Royal Malaysian Customs also actively seizes consignments that are suspected to be counterfeits with the assistance of IPR owners working with local law firms. Customs training is conducted at all the important ports of entry in West Malaysia for clients providing, among others, luxury products, electronics, household items and health product industries. The training is often done in conjunction with the MDTCA.

In terms of legislative updates, on 30 January 2020, the Copyright (Amendment) Act 2020 was gazetted, amending the CA 1987 to empower the Copyright Tribunal to hear and determine any dispute relating to royalties arising between a licensing body and any of its members, as an alternative dispute resolution option.71

Further, on 28 August 2020, the Trademarks (Compounding of Offences) Regulations 2020 was published, supplementing Section 136(2) of the TMA 2019 by detailing the types of compoundable offences and the procedures involved. The Controller may at any time before a charge is instituted make a written offer to compound to the person reasonably suspected of having committed the offence. Once the offer has been accepted, payment may be made through various channels accepted under the Regulations or, if the compound is not paid within the time specified in the offer, prosecution for the offence may be instituted at any time thereafter without any notice to the offender. Once the offence has been compounded and the payment has been made, it is treated as a settlement of the matter in lieu of prosecution of the offence.72