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December 23, 2019

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Intellectual Property - Malaysia’s Trademark Legislation goes under the Knife


- Karen Abraham, Head of the Intellectual Property Department and Information Technology Department [ Shearn Delamore & Co. ]

Karen-Abraham

It is a major step towards progression of the Malaysian trademarks landscape, and brand owners who have been waiting to protect their non-traditional trademarks or file their trademarks worldwide at a cheaper cost or even monetize their intellectual property will heave a sigh of relief...

Malaysia was one of the 12 countries to sign the now-defunct Trans-Pacific Partnership Agreement (TPPA) back in 2016, along with Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States.

Given the significance of the Intellectual Property (IP) Chapter in the TPPA, the ratification of this Treaty was seen to be very important to Malaysia, as it would have made some radical changes to the intellectual property landscape in Malaysia. Various Intellectual Property legislations were slated for updates or amendments, some of which were eagerly awaited by the legal fraternity.

When TPPA fell apart following the withdrawal of the United States, the future of the Malaysian legislations that were slated for change became uncertain, until very recently, at least for trademarks.

The outgoing Malaysian Trade Marks Act was enacted in the year 1976 and came into force in 1983. It goes without saying that the Act required an update or revision altogether to keep up with the many changes in trademark laws around the world.

After careful studies and deliberation, the Malaysian government recently introduced the Trade Marks Bill 2019.

The Trade Marks Bill 2019 had its first reading on 9 April 2019 and is expected to come into force sometime during the second half of 2019 upon completion of the Regulations. The Bill, when enforced, will seek to replace the outgoing Trade Marks Act 1976 by leaps and bounds.

This long overdue amendment to the trademark laws, in fact, will also help Malaysia to become an attractive base for trademark filings, certainly. It is a total revamp of the Trade Marks Act 1976, which will put Malaysia on a new frontier of trademark development, on the international and national fronts.

For many international stakeholders looking towards Malaysia, this change in the trademarks landscape will most certainly make a difference in their decision-making, for the Act has many significant changes that could benefit all stakeholders alike. Be it companies intending to enter the Malaysian market, or companies which have been trading here for a while and have been awaiting updates to the law to expand their trademarks protection.

So what are some of the changes international and regional stakeholders could rejoice about?

Act-1976

First, the introduction of non-conventional trademarks. At present, the outgoing Trade Marks Act 1976 defines use of a mark to include only “use of a printed or other visual representation of the mark”. Under the upcoming Act, the term trademark will refer to “any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings”. With the recognition of shape, sound and scent marks, Malaysia will be on par with other jurisdictions such as Singapore, US and Europe.

Second, there will also be a revision for collective marks, which will be of particular interest to organizations from Accountancy, Legal, Medical and other relevant industries. At present, Section 56 of the outgoing Act only allows for certification marks, and protection for collective marks is not provided for.

Next, if not the most significant, is probably one of the most sought-after change - being the introduction of the international trademark registration process, following Malaysia’s accession to the Madrid Protocol. With the introduction of this system, trademark owners may need to file only one single application for a trademark in Malaysia and across various other jurisdictions within the Madrid system, with the formal examination undertaken by World Intellectual Property Organisation (WIPO) and at a significantly lower cost compared to filing individual national applications in these member countries. The examination period of the trademarks under the system will also be reduced to below 18 months to avoid unnecessary delays. The Madrid Protocol was introduced in 1989 to allow a trademark owner to seek protection of its trademark in several countries simultaneously by filing one application with a single office, in one language and by paying one fee.

Then, there is the multi-class application which has also been long awaited. With the introduction of this system, trademark owners may henceforth be able to file one application across multiple classes, which would in turn result in significant cost savings for them. This would certainly be of interest to stakeholders who trade across various industries and businesses.

Fifth, the new Act is also introducing provisions on monetization of trademarks, wherein brand owners could now treat their trademarks as a form of property for the purposes of obtaining security of interest. Provisions on trust and equities placed on a trademark have also been introduced, alongside some changes to the licensing on trademarks for the purposes of monetization as well.

Sixth, enforcement procedures have also been made simpler. Provisions relating to trademark enforcement, which were previously in the Trade Descriptions Act 2011, are being imported to and revised in the new Trade Marks Act. This means civil enforcement and criminal enforcement are now under the same legislation, with similar requirements and threshold.

Last but not least, in respect of the rights of trademark owners, with the amendments to the provisions on infringement, trademark owners will henceforth be able to commence actions against infringers for goods that are simply related to goods claimed under a registered mark, and not necessarily for identical or goods falling under similar categories.

So what does the above mean to stakeholders interested in investing in or expanding to Malaysia?

Having undergone the second reading at the Parliament in July 2019 and slated for royal assent sometime in the fourth quarter of 2019, there is still a long way towards enforcement of the new trademarks legislation, particularly when the trademark regulations covering all the new procedures and systems introduced in the Act have yet to be introduced. Nevertheless, it is a major step towards progression of the Malaysian trademarks landscape, and brand owners who have been waiting to protect their nontraditional trademarks or file their trademarks worldwide at a cheaper cost or even monetize their intellectual property could finally breathe a sigh of relief. It is recommended that trademark owners audit their portfolios in anticipation of the changes to the new Act. Trademark owners should take advantage of the amended definition of trademarks to consider the opportunity of extending rights into nontraditional trademarks.

To summarize, essentially the amendments to the trademark legislation are as follows:

AMENDMENTS UNDER THE TM
BILL 2019
PREVIOUS PROVISIONS UNDER THE
TMA 1976
Recognition of non-conventional trademarks namely shape, color, sound and scent marks Only provides for registration of conventional trademarks
Protection of collective trademarks Only provides for protection of certification trademarks
Introduction of international trademark registration procedure i.e. a single filing procedure for a trademark across various other jurisdictions within the Madrid system Not available
Provides for multi-class application Provides for single-class application
Introduction of provisions in relation to monetization of trademarks Not available
Introduction of provisions in relation to criminal enforcement procedures Not available. Provisions in relation to criminal enforcement procedures are provided under the Trade Descriptions Act 2011
Trademark infringement action can be taken against infringers for goods/services that are RELATED to the goods/services claimed under a registered trademark Trademark infringement action can only be taken against infringers for goods/services that are IDENTICAL to the goods/services claimed under a registered trademark
Provides for remedies for groundless threats of infringement proceedings Not available
No longer available Defensive Trademarks
Objection based on “earlier trademark”, which includes a registered trademark, a protected international registration designating Malaysia, and well-known trademark. Also extended to cover a pending application that may become “earlier trademark” upon registration. Not available

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.

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