An extract from The Intellectual Property Review, Edition 10

Enforcement of rights

i Possible venues for enforcement

Parties may file a civil suit in the specialised Intellectual Property Court for infringement of any intellectual property right. For patent infringement proceedings, an aggrieved person may institute court proceedings under Section 59 of the PA 1983. Patent invalidation is commonly used a counterclaim to a claim for infringement, and is governed by Sections 56 and 57 PA 1983.

Under Section 56 of the TMA 2019, the registered proprietor of a trademark may institute court proceedings against any person who has infringed, is infringing or is likely to infringe the registered trademark.

Copyright owners may bring a suit for infringement under Section 37 of the Copyright Act 1987 (CA 1987).

TMA 2019 and CA 1987 also provide for criminal sanctions further to the civil remedies mentioned above. Upon lodging a complaint to the Ministry of Domestic Trade and Consumer Affairs (MDTCA) with sufficient evidence, the MDTCA will exercise its search and seizure powers (with or without warrant) under the respective legislation to seize the infringing items from the offender's premises. The MDTCA will then proceed to impose a compound39 on the offenders or charge them in court.40 If they are charged, the Deputy Public Prosecutor will prosecute the offenders in the Sessions Court. There is no criminal enforcement available for patent and industrial design infringements.

ii Requirements for jurisdiction and venue

The Courts of Judicature Act 1964 provides that the High Court will only have jurisdiction to preside over all civil proceedings where:

  1. the cause of action arose;
  2. the defendant or one of several defendants resides or has his or her place of business;
  3. facts on which proceedings are based exist or alleged to have occurred; or
  4. any land, the ownership of which is disputed, is situated, within the local jurisdiction of the court and where all parties consent in writing within the local jurisdiction of the other High Court.41

The High Court also has discretion to decide on the applicable jurisdiction and will apply the doctrine of forums non conveniens, taking into account factors such as:

  1. the convenience and expense of hearing the case in Malaysia compared to another jurisdiction;
  2. availability of witnesses; and
  3. the law governing the relevant transaction.42
iii Obtaining relevant evidence of infringement and discovery

In any case, the court may order any party to proceedings to give discovery of documents by making and serving on any other party a list of documents that are or have been in his or her possession, custody or power.43 Parties to proceedings may make an application to court for an order requiring any other party to make an affidavit stating whether any document specified or described in the application or any class of document so specified or described is, or has at any time been, in his or her possession, custody or power, and if not then in his or her possession, custody or power when he or she parted with it and what has become of it.44

Where there is a risk that evidence essential to a claimant's case may be destroyed or concealed, the claimant can apply to the courts for an Anton Piller order. The Anton Piller order permits the claimant to enter into the defendant's premises to inspect and take into custody any documents and articles specified in the order. Any document or article taken into custody can be used by the claimant as evidence.45

In addition, it is settled law that improperly or illegally obtained evidence is admissible in Malaysia, provided that it is relevant.46

In respect of criminal matters, in addition to the search and seizure powers of the MDTCA to obtain relevant evidence of infringement, it is also common practice for pre-action investigations to be conducted to ascertain, secure and confirm the evidence of infringement.

iv Trial decision-maker

Judges presiding over IP cases may possess relevant IP training or technical experience, but these are not required for them to hear such cases. Malaysia does not operate a jury system. Intellectual property cases are heard in the High Court by a single judge. In the Court of Appeal, cases are usually determined by a panel of three judges. In the Federal Court, an application for leave to appeal to the Federal Court will usually be heard and disposed of by three judges, whereas the actual appeal proceedings are often heard by a panel of five judges.

v Structure of the trial

Registered or common law proprietors, where applicable, may initiate proceedings in Malaysia by way of filing a writ of summons to the court and serving the endorsed writ to the respective defendant. A plaintiff may alternatively file an originating summons for cases that are only concerned with matters of law and are unlikely to have substantial disputes of fact. For actions commenced by way of a writ, the plaintiff will file and serve his or her statement of claim, whereas the defendant will then file and serve his or her defence, and counterclaim if he or she wishes to do so. Afterwards, the plaintiff may file and serve his or her reply to the defence. The process continues by both parties communicating and exchanging and exhausting pleadings and documentary evidence, and the trial date may then be set by the court if the parties still have not chosen to settle. For actions commenced by way of originating summons, the pleadings will be affidavits filed by both parties and instead of a trial, a hearing will be fixed before the court.

In patent infringement or invalidation cases, documentary evidence is often used to establish a party's case, but as a general rule, it may only be admissible as evidence of fact if the maker of the statement has personal knowledge of the statement and is called as a witness in the proceedings.47 Witnesses are called to prove any alleged fact, and expert witnesses are very often called to assist in issues that require specialised skill or knowledge and in assessing issues through the lens of a 'person skilled in the art', particularly in disputes regarding novelty, inventive step and enabling disclosure. For copyright infringement cases, questions as to originality or whether a substantial part of a work is taken is generally the question for the court, assisted by documentary evidence and witnesses. For trademark infringement or passing-off cases, issues relating to facts may be proved by documentary evidence, witnesses and expert opinions. Survey evidence is admissible and given sufficient weight to support or disprove issues such as acquired distinctiveness or likelihood of confusion, but such survey evidence must meet the minimum criteria as set by case law.

vi InfringementPatents

Patent infringement consists of performing the exclusive acts of exploiting the patented invention, assigning or transmitting the patent and concluding licence contracts, by a person other than the owner of the patent and without the latter's consent to a product or a process falling within the scope of protection of the patent.48

The Malaysian courts have taken different approaches over the years in constructing claims for patent infringement proceedings.

In Cadware Sdn Bhd v. Ronic Corporation,49 the Court of Appeal held that the Malaysian courts ought to adopt the purposive construction approach as proposed by Improver Corpn v. Remington Consumer Products Ltd,50 and not apply the 'essential integers' test. However, the Court of Appeal in Yeohata Machineries Sdn Bhd (dahulunya dikenali sebagai Gaindex Sdn Bhd) & Anor v. Coil Master Sdn Bhd & 2 Ors endorsed the essential integers test.51

In Kingtime International Ltd & Anor v. Petrofac E&C Sdn Bhd, the High Court had applied the essential integers test, purposive construction approach and also the doctrine of equivalents as endorsed by the English Supreme Court in Actavis UK Limited and Others v. Eli Lilly and Company.52 The trial judge had applied all three tests and found that the defendant had infringed the patent. However, the application of the three tests should not be seen as setting a requirement that all three have to be met to find infringement.53

Trademarks

A person infringes a registered trademark if, without the consent of the proprietor of the trademark, he or she uses in the course of trade a sign that is identical or similar to the trademark in relation to goods or services identical or similar to those for which the trademark is registered, resulting in the likelihood of confusion on the part of the public.

Further to civil remedies, the TMA 2019 also provides for criminal sanctions. Section 99 of the Act provides for the imposition of a fine not exceeding 1 million ringgit, imprisonment for a term not exceeding five years, or both, to any person who counterfeits a registered trademark by making an identical or similar mark to a registered trademark with intent to deceive or by falsifying a genuine trademark without the consent of the trademark owner.54 A Registrar's verification obtained under Section 112 TMA 2019 shall be prima facie evidence in proceedings, civil or criminal, before the court.55

Copyright

Copyright is infringed where there is reproduction of the whole or a substantial part of the work. Further, Section 36 of the CA 1987 provides that copyright in a work is infringed when a person who, not being the owner of the copyright, and without licence from the owner, does or authorises an act that is controlled by the CA 1987.56

Similar to trademarks, the CA 1987 also empowers the courts to impose criminal penalties. Section 41 of the CA 1987 provides that a person who, during the subsistence of copyright in a work or performers' right, commercially deals with any infringing copy shall be fined an amount within the range of 2,000 to 250,000 ringgit or a term of imprisonment not exceeding 20 years, depending on the type of offence, unless he or she had acted in good faith and had no reasonable grounds for supposing that the rights would be infringed.57

vii DefencesPatents

An alleged infringer can argue that the patent is invalid as a defence on any of the following grounds:58

  1. not an invention: the alleged invention is not an invention, that is, it is not an idea that permits, in practice, a solution to a specific problem in a field of technology;
  2. not patentable: the alleged invention is not patentable under the PA 1983;
  3. contrary to public policy: the performance of any act in respect of the claimed invention would be contrary to public order or morality;
  4. not new: the alleged invention is not patentable because it is not new, as it has been anticipated by prior art;
  5. no inventive step: the invention is obvious having regard to what was known or used before the priority date;
  6. not industrially applicable: the invention cannot be made or used in any of kind of industry;
  7. description or claim does not comply with the Patents Regulations 1986: the specification is ambiguous or does not sufficiently and fairly describe the invention and the method by which it is to be performed or does not disclose the best method known to the applicant for the patent and for which they were entitled to claim protection;
  8. patentee not entitled: the right to the patent does not belong to the person to whom the patent was granted;
  9. incomplete or incorrect information: false or incomplete information has been deliberately provided, or caused to be provided, to the Registrar when filing a request for substantive examination by a patentee or their agent;
  10. approval: consent, conditional or otherwise, of the owner of the patent or his licensee;
  11. limitation: the rights under the patent shall extend only to acts done for industrial or commercial purposes and in particular not to acts done only for scientific research; or
  12. declaration of non-infringement: any interested person may request, by instituting court proceedings against the patent owner, that the court declare his or her performance to not constitute infringement.
Trademarks

A common defence to trademark infringements or passing off is that the defendant's mark is not identical or similar to the plaintiff's trademark or that the goods and services are not similar to those for which the plaintiff's trademark is registered.

Further defences available in a trademark infringement or passing-off action include:59

  1. use in good faith of own or predecessor's name;
  2. use in good faith of a description of the character and quality of goods or services or which is not deemed as trademark use;
  3. prior use of an unregistered trademark before the date of registration of the registered trademark;
  4. express or implied consent; and
  5. non-commercial purpose.
Copyright

Acts done by way of fair dealing for purposes of research, private study, criticism, review, reporting of news or current events accompanied by acknowledgements, and parody, pastiche or caricature are not infringing acts60. In addition, defendants may claim that no copyright was subsisting in the original work or that the plaintiff is not the owner of the work.

Defendants may further rely on any of the following as a defence for copyright infringement:61

  1. inclusion in a film or broadcast of any artistic work situated in a place where it can be viewed by the public;
  2. the copying of a work for the private and domestic use of the maker;
  3. the use of a work in judicial and legal proceedings;
  4. use of a work by a public or state organisation as prescribed by the Minister where:
    • it is in the public interest;
    • it is compatible with fair practice;
    • no profit is derived from its use; or
    • no admission is charged for the performance, showing or playing;
  5. reproduction and distribution of copies of any artistic works where such works are situated in places where they can be viewed by the public; or
  6. incidental inclusion of a work in an artistic work, sound recording, film or broadcast.
viii Time to first-level decision

A hearing in patent infringement proceedings typically takes about three to 21 days, depending on the number of witnesses and the complexity of the technology and issues involved. A judgment is usually available two to five months after the end of the trial.62

Depending on the complexity of the matter, a patent infringement proceeding typically takes about one to two years for the decision of first instance to be handed down.63

Trademark and copyright infringement proceedings, from the time the writ or originating motion (whichever applicable) is filed up to the conclusion or decision, typically take between 12 and 18 months, depending on the number of witnesses and the complexity of the claims. It is possible to expedite proceedings by filing a Certificate of Urgency.64

ix Remedies

Aggrieved parties may, as a preliminary relief, rely on the search and seizure provisions under the TMA 2019, PA 1983 and the CA 1987, particularly where there is a risk that evidence essential to the case may be destroyed or concealed.

Interim or interlocutory injunctions (inter partes and ex parte) are also available on application to the court to restrict the alleged infringing acts once an action has been filed. For ex parte interim injunctions, a Certificate of Urgency may be filed to support the application. Further, a Mareva injunction may also be granted if the claimant has evidence that the defendant is dissipating its assets to avoid having to pay damages likely to be ordered against it. The defendant's bank accounts may be frozen and the order may extend to assets outside Malaysia.65

Final remedies include monetary remedies which take into consideration loss of goodwill and reputation, account of profits, lost profits on goods or services, springboard damages, aggravated damages, exemplary and punitive damages and future loss of profits. Equitable remedies are also available, such as permanent injunctions to prevent further infringement, and delivery up or destruction of infringing goods.

x Appellate review

A defeated party can appeal against a judgment or order, or parts of the same, from the High Court to the Court of Appeal on both questions of fact and law. The appeal from the High Court to the Court of Appeal is a re-hearing based on the record of appeal so filed.

A further appeal on questions of law from the Court of Appeal lies with the Federal Court. Appeal is not as of right and prior leave has to be obtained from the Federal Court.

However, if the appeal arises from a judgment or order of the Magistrates or Sessions Court, the defeated party can appeal to the High Court and then to the Court of Appeal. There is no further right to appeal to the Federal Court.

The above process applies to both civil and criminal proceedings.

xi Alternatives to litigationArbitration

Arbitration is available to resolve intellectual property disputes for parties who prefer to keep matters confidential instead of the public proceedings of civil litigation. As disclosure of arbitral proceedings are strictly prohibited,66 this may be a more appealing alternative where businesses would prefer to keep matters private or away from other competitors.67 The Asian International Arbitration Centre (AIAC) is a common avenue for parties who wish to pursue arbitration. Notably, the AIAC also provides a simple and effective framework for the resolution of '.my' domain name disputes, with it being mandatory for '.my' domain disputes to be settled through Domain Name Dispute Resolution in Malaysia.

Mediation

The Mediation Act 2012 provides a detailed procedure for mediation and the recognition of agreements reached pursuant to mediation. Mediation is a non-adversarial and private process where the parties try to reach common ground with the assistance of a neutral third party. Judges of the High Court can give directions that the parties facilitate settlement of the matter through mediation.68 This method is also known as court-annexed mediation or judge-led mediation, which can be conducted under the direction of High Court judges, Sessions Court judges, magistrates and their registrars69.

Additionally, the AIAC provides a system for the conciliation and mediation of disputes. The Rules of the AIAC for conciliation and mediation incorporate provisions of the UNCITRAL Model Law on International Commercial Conciliation 2002.70