EnforcementOfIPR

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Enforcing your Intellectual Property Rights

By Lee Swee Seng

LLB, LLM, MBAADVOCATE & SOLICITOR

CERTIFIED MEDIATORPATENT AGENTNOTARY PUBLIC

[email protected]

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Intellectual Property Intellectual Property (IP) has become

a significant area of focus in law. Now companies have begun to

understand the importance of extracting the maximum value from their IP in terms of managing license and other contractual arrangements.

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Malaysia is also taking greater steps in protecting IP by the proposed creation of IP Courts and the 9th Malaysia Plan which will include measures to promote franchising.

To protect IP rights, Malaysia has local legislation like the IP Corporation of Malaysia Act 2002, Trademarks Act 1976, Patents Act 1983, Copyright Act 1987, Industrial Design Act 1996, Layout Designs and Integrated Circuit Act 2000, Geographical Indications Act 2000 and Optical Discs Act 2000.

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Intellectual Property Rights Main IP Rights: Patents Copyright Trademark Industrial Designs Trade Secret & Confidential

Information

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Patents Patent Act 1983 Patent Regulations 1986 Provides 20 years legal protection

to patent holders which includes exploitation of the patents, the assignment or transfer of rights and license contract.

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Patents The Act was revised in accordance

with the Paris Convention and TRIPS Agreement

The Patent Act provide for the patent enforcement by the Enforcement Division of the Ministry of Domestic Trade and Consumer Affairs.

The Division will conduct the necessary investigations and prosecutions.

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is a treaty administered by the World Trade Organization (WTO) which sets down minimum standards for many forms of intellectual property (IP) regulation

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Patents In accordance with TRIPS, the

Patent Act provides a protection period of 20 years from date of filing an application

Similarly a utility innovation certificate provides for an initial period of 10 years from the date of filing an application

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Patent Infringement Once a patent has been granted,

exploiting without the consent of the proprietor is an infringement.

In the case of a product patent and process patent, any making, disposal, import, the use without consent would be an infringement.

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Patent Remedies Injunction Damages or account of profit Order of delivery up or destruction Declaration that the patent is valid

and has been infringed

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Patent - Enforcement Entitlement to damages from date

of publication. Plaintiff must show not only the act

infringed the patent but the claims in the form in which they were contained in the application immediately before publication

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Copyright Copyright Act 1987 Copyright (Licensing) Regulations 2000 protects : literary works, musical works,

artistic works, films, sound recordings, broadcasts and derivative works

protection lasts for authors lifetime and 50 years after his death

for sound recordings, protections subsist for 50 years

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Copyright Act also provides for the performer’s rights

in a live performance which subsists for 50 years.

Copyright is infringed when an unauthorized person reproduces, makes for sale or hire, distributes, possess, exhibits in public, etc.

The Act provides enforcement by the Enforcement Division apart from the police.

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Copyright owners to take precaution Copyright owners are advised to make

sure: authors’ name appears on all copies of

literary, dramatic, musical works, etc publisher’s name appears on all copies copyright owner’s name and date of first

publication and the country of first publication appears on sound recordings and computer programmes

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Copyright owners to take pre-caution

Anti-counterfeiting devices to aid solicitors executing Anton Pillar Orders, police officers executing search and seizure warrants and Enforcement Division Officers who are looking for counterfeit copies, to detect the genuine copy.

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Remedies for Infringement of Copyright 2 ways: Public enforcement enforcement by the police, customs

officers and Enforcement officers from the Ministry of Domestic Trade and Consumer Affairs.

Private enforcement civil action taken by private individuals to

enforce their copyright through Court.

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Remedies for Infringement of Copyright Interlocutory Remedies; Court can issue interlocutory

orders to prevent substantial injustice being done in the meantime.

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Remedies for Infringement of Copyright Courts can issue: Interlocutory injunction Anton Pillar Order Norwich Pharmacal Order

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Copyright - Injunction Interlocutory injunction is sought

to preserve the status quo pending hearing in Court.

It may be a ‘prohibitive order’ which prevents the Defendant from performing certain acts in the interim ie. Destroying the infringing copies.

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Copyright - Various orders of injunctions A ‘mandatory order’ is to ask the Defendant

to carry out some act ie. Asking Defendant to deliver up the infringing works to the Plaintiff.

In deciding to grant an interlocutory injunction, the Court will follow the principle laid down in American Cyanamid v Ethicon Ltd by the House of Lords which was applied in Keet Gerald Francis v Mohd Noor [1995] 1 CLJ 293.

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Copyright - Injunction The principle laid down in American

Cyanamid ie. A serious issue to be tried, balance of convenience and is the damages adequate for the Plaintiff.

The Court will consider the balance of convenience test and if the balance of convenience is equal the Court will either maintain status quo ie. injunction should stay or look into the merits.

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BASKIN ROBBINS INTERNATIONAL CO. & ANOR. V. AVONDAY SDN. BHD.[1992] 2 CLJ 201 (Rep) [1992] 2 CLJ 1198

This is an application by the Plaintiff for an interlocutory injunction to restrain the Defendant from selling Defendant’s ice cream using the mark USA 31.

To apply for an interlocutory injunction, the Plaintiff has to satisfy certain requirements under American Cyanamid case.

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Hashim Yeop Sani J mentioned the case Prof Dr. A Kahar Bador & Ors v N Krishnan & Ors [1982] CLJ 630 (REP), stating that an interlocutory injunction is merely provisional and does not conclude a right. If a person can show that he has a fair question to raise as to the existence of the right which he alleges he may be entitled to it.

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The Court went on to apply the principles in American Cyanamid.

The Court is satisfied that the claim is not frivolous or vexatious and there are serious issues to be tried.

As to whether damages would be an adequate remedy, the Court opined that if the Plaintiff succeeds at the trial without this injunction, it would not be possible to assess the amount of

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damages they would have suffered as it would not be possible t o account the number of customers that they had thereby been deprived of.

However the injunction is not to put an end to the Defendant’s ice cream business. They can still market their product before they decided to adopt

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the impugned mark USA 31. Thus the Court opines that the

balance of convenience lies in allowing the injunction as it would not do a greater harm to the Defendant.

Another factor is that the Plaintiff applied promptly hence the issue of statues quo being preserved only existed before the Defendant began

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SAP(M) Sdn Bhd v I World HRM Net Sdn Bhd & Anor [2006] 2 MLJ 678 The Second Plaintiff is the owner of

the copyright in a business application software programme.

The First Plaintiff is the second Plaintiffs exclusive distributor of the software in Malaysia.

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SAP(M) Sdn Bhd v I World HRM Net Sdn Bhd & Anor [2006] 2 MLJ 678

their business in that manner. The Court allowed the Plaintiff’s

application for an interlocutory injunction against the Defendant.

The alleged breach that the First Defendant and the Second Defendant had infringed the copyright in the said software by

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communicating the software to a third party without the Plaintiff’s consent.

The Plaintiffs are applying for an interim injunction to restrain the Defendants from using the Plaintiffs software and also to stop them from infringing the Plaintiff’s copyright in

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the said software. The Court allowed the Plaintiff’s

application for interlocutory injunction as it would surely damage the Plaintiff’s goodwill and reputation as any disruption of service would make the customers lose confidence in the Plaintiff’s software.

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SAP(M) Sdn Bhd v I World HRM Net Sdn Bhd & Anor [2006] 2 MLJ 678 The damage suffered would be

irreparable and monetary compensation would not be an adequate remedy.

The balance of convenience favours the Plaintiff who will not be able to control the licensing of the software if the interim injunction is not granted.

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Although there was delay in the application for the interim injunction. The Defendants were not prejudiced as the delay was due to ‘ongoing negotiations’. (Larut Consolidation Bhd v Khoo Ee Bee [1997] 5 MLJ 77- delay for 2 years was excused)

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“Delay defeats Equity” Evercrisp Snack Products (M)

Sdn Bhd & Anor v Sweeties Food Industries Sdn Bhd [1979] 1 LNS 19

The Plaintiff applied for an interlocutory injunction that the Defendants be restrained until the trial of the action of passing off.

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Evercrisp Snack Products (M) Sdn Bhd & Anor v Sweeties Food Industries Sdn Bhd [1979] 1 LNS 19

But the Court HELD that there was unreasonable delay in applying for the relief and the delay was not satisfactorily explained thus dismissing the motion to apply for an interim injunction.

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Copyright - Anton Pillar Order The Anton Pillar Order was named

after the case, Anton Pillar KG v Manufacturing Process [1976] 1 Ch 55 whereby it permits the Plaintiff to enter the Defendant’s premises to inspect the relevant documents and to remove them (search & seizure).

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Copyright - Anton Pillar Order In the case above, the Court

opined that there must be a balance between the Plaintiffs claim that the evidence may be destroyed and the Defendants claim that there should be no invasion of privacy.

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Copyright - Anton Pillar Order To apply for Anton Pillar Order, the

Plaintiff must show he has a strong prima facie case, the damage caused is very serious, there is clear evidence the Defendants have in their possession the incriminating document and real possibility that they may destroy the materials.

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Copyright-Norwich Pharmacal Order The Norwich Pharmacal Order which

originated from Norwich Pharmacal Co. and Others v. Commissioners of Customs and Excise[1973] 2 All ER 943 aids the Plaintiff to compel a third party to reveal information so the Plaintiff may ascertain the actual wrongdoers.

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Copyright-Norwich Pharmacal Order The House of Lords HELD that

where a person is innocently involved in the wrongdoing act of a third party, he is under a duty to assist the Plaintiff by releasing the identity of the wrongdoers but the he may not be liable to the Plaintiff.

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ESPL (M) Sdn Bhd v Harbert International EST Sdn Bhd [2003] 3 CLJ 864 The Plaintiff had obtained by way

of ex- parte application a Norwich Pharmacal Order and an Anton Pillar Order against the Defendant.

In the light of the above facts, the Defendant applied to set aside the said Orders on the following grounds:

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ESPL (M) Sdn Bhd v Harbert International EST Sdn Bhd [2003] 3 CLJ 864 a) The Norwich Pharmacal Order

should have been made inter parte instead of ex parte.

b) The Plaintiff who after having failed to subpoena the Defendant to produce documents, decided to apply for Norwich Pharmacal Order, was clearly committing an abuse of the process of the court.

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ESPL (M) Sdn Bhd v Harbert International EST Sdn Bhd [2003] 3 CLJ 864 c) In respect of the application to

set aside the Anton Pillar Order, the Plaintiff could not show any risk that there is a risk of the documents being destroyed.

Therefore, the Court arrived at the decision that the Defendant’s application to set aside be granted.

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Copyright - Final Remedies After liability for copyright has been

established, the Court may grant final remedies:

Permanent injunction Order for delivery of infringing

copies Inquiry to damages or an account of

profit

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Copyright - Damages The basic measure for damages is

the depreciation caused by the infringement, exploitation of the copyright owner’s work, ‘going market rate’, applicable royalty rate, etc.

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Copyright - Damages Since copyright infringement is a

tort, rules of causation and remoteness will apply ie. Whether loss was in fact caused by infringement and whether loss was foreseeable.

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Copyright - Damages If the copyright work is circulated

in the market, then the Plaintiff may calculate damages via loss of profits.

The Plaintiff has the option to choose whether he wants an account of profits or having damages assessed.

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Copyright - Damages The Plaintiff may ask the

Defendant to account for his profits made via sale of infringing copies and to have them confiscated.

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Copyright - Offences In addition to civil suit, s41 Copyright

Act 1987 made certain infringing acts an offence.

The provision covers sales, distribution, possession, exhibition, imports of the infringing copy shall be guilty of an offence and shall on conviction be liable to a fine of not less than two thousand

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Copyright - Offences

ringgit and not more than twenty thousand ringgit for each infringing copy, or to imprisonment for a term not exceeding five years or to both.

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Copyright - Offences Any person who causes a literary or

musical work to be performed in public shall be guilty of an offence under this subsection unless he is able to prove that he had acted in good faith and had no reasonable grounds for supposing that copyright would or might thereby be infringed [s41(3)]

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Copyright - Offences s44 allows an Inspector to enter into

premises with a warrant to search and inspect infringed goods and to seize and remove them under s45 but a list must made of the goods seized as required under s46.

Remedies under criminal proceedings are fines and jail sentences and not to recover monetary compensation.

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Prosecution of Copyright Infringements Operations conducted by enforcement

officers together with representatives from the copyright industry.

Surprise inspections and raids with the aid from the Police and RELA (Peoples Voluntary Corps) to ‘protect’ the enforcement officers while they search and seize infringed items or products.

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Prosecution of Copyright Infringements Various bodies involved; BSA, RIM(Recording Industry of

Malaysia), MPA(Motion Pictures Association of America), IFPI (International Federation Phonographic Industry), PPM (Public Performance Malaysia) & MACP (Music Authors Copyright Protection).

Sources from xvi [2002] 4 MLJ Prosecution of copyright infringements :s42

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Prosecution of Copyright Infringements Total of 45,241between 1999-2002

inspections and raids were conducted nationwide by various enforcement officers, police, customs, Ministry of Home Affairs, FINAS (National Film Developing Corporation) and local authorities.


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Prosecution of Copyright Infringements s42 states that an affidavit or

statutory declaration (SD) may be made by owners and agents and both are admissible in criminal and civil proceedings.


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Trademark Trade Marks Act 1976 Trade Marks Regulations 1997 The Act provides protection for

registered trademarks and service marks.

It is a sign that distinguishes the goods and services of one trader from those of another.

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Trademarks According to MyIPO (Intellectual Property

Corporation of Malaysia), trademarks exhibits the following function:

origin function choice function quality function marketing function economic function The Intellectual Property Division (IPD) was established on the 27th October 1990 under the jurisdiction of The Ministry of Domestic Trade and

Consumer Affairs Malaysia. The division is responsible for the development and management of intellectual property system in Malaysia. Prior to its establishment, it was known as the 'Pejabat Pendaftaran Cap Dagangan dan Jaminhak' under the jurisdiction of The Ministry of Trade and Industry.

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Trademark As for trademark, the period of protection

is 10 years, renewable for every period of 10 years thereafter [s41 TM 1976]

However protection is difficult and tedious as owner must convince the Court that the infringing act misleads the public and secondly the infringing goods and services may be mistaken from this own goods and services.

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Infringement of Trademark Section 38 of the Trade Marks Act

1976 A registered trademark is infringed by

a person who is not a registered proprietor when he uses a mark which is identical with it or so nearly resembling it as it likely to deceive or cause confusion in the course of the trade.

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Electro Cad Australia Pty Ltd & Ors v Mejati RCS Sdn Bhd & Ors [1998] 3 MLJ 422

The plaintiffs launched this suit to protect their Stopcard Auto Theft Device (Stopcard).

The use by the defendants of the trademark “Stopcar” which is very similar to that of the Plaintiffs’ “Stopcard” is an appropriation of Stopcard’s goodwill.

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Electro Cad Australia Pty Ltd & Ors v Mejati RCS Sdn Bhd & Ors [1998] 3 MLJ 422 The High Court granted the

following orders against all the defendants:

a) a declaration that Stopcard is the owner of the goodwill in the trade name “Stopcard” in Malaysia

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b) an injunction to restrain defendants from manufacturing, selling or dealing with their product “Stopcar” which possesses features identical or similar of the Plaintiff’s product “Stopcard”.

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c) delivery up or destruction upon oath all documents in the possession of the Defendants or under the control bearing the word “Stopcar”

d) damages to be assessed by the Deputy Registrar

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Alternative enforcement of Trademark Trade Descriptions Act 1972 (TDA)

is enforced by the Ministry of Domestic Trade and Consumer Affairs.

TDA regulates the descriptions in relation to goods and services.

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Trade Description Act 1972 TDA prohibits the making of false

trade descriptions ie. In the course of trade; apply a false trade description to any goods or supply or offer to supply any goods to which a false trade description is applied.

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Parkson Corp Sdn Bhd v Fazaruddin Ibrahim [2002] 4 CLJ 18 The Respondent obtained a Trade

Description Order under s16 Trade Description Act 1972(TDA) and prayed for assessment of damages.

The Appellant appealed against the assessment of damages.

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Parkson Corp Sdn Bhd v Fazaruddin Ibrahim [2002] 4 CLJ 18 The Court of Appeal HELD that

Parliament intended to criminally punish the infringer and not to make an order under s16 to award damages.

The Court opined that there can be no assessment of damages unless there is an order awarding damages, and in this case there isn’t any thus allowing the appeal.

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Trade Description Act 1972 The owner may apply to Court for an

Order declaring the infringing trade mark as a false trade description under TDA known as a Trade Description Order (TDO).

A Trade Description Order is not an injunction order but a declaratory order which deems the infringing trade mark as a false trade description.

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Trade Description Act 1972 The owner has to establish a case of

trade mark infringement or passing off before the Court grant the TDO.

Application for TDO proceeds on an ex-parte basis.

In recent cases, some Courts have directed the applicant to advertise the fact that he is applying for a TDO.

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Trade Description Order Time and cost is saved as it is usually a

fraction of that of a civil suit. Actual enforcement and prosecution of

the offence is conducted by a government agency at no cost to the rights owner.

TDO is an order in rem (against the world at large) and has a lifespan of 5 years.

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Original Label EnforcementTrade Description (Original Label) Order 2002 With effect of January 2003, Ministry of

Domestic Trade and Consumer Affairs has been gazetted to provide all copyright owners and persons authorized by the owners shall put original label on original optical disc before entering the market.

This is to protect copyright owners and fight piracy activity.

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Original Label EnforcementTrade Description (Original Label) Order 2002

Under this order, enforcement officers may arrest without a warrant any person suspected of having committed an offence whether at permanent or open premise.

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Enforcement of the Trade Description Order The Enforcement Division has the

authority to take action on its own accord and also to take action based on complaints lodged by person who suspects trademark infringement or passing of action.

When complaint is lodged, Enforcement Division will study merits of the case.

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Enforcement of the Trade Description Order If there is doubt as to whether the

goods bearing the allegedly false trade description may violate the TDA, the Enforcement Division will require the rights owner to obtain a TDO prior to taking action.

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Powers of Enforcement Division provided under the Trade Description Act 1972 Enter premise [s28] Seize and detain goods [s28] Order offender to produce relevant

books and documents [s28A] May compound the offence or

prosecute the offender [s28B]

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Trade Description Order Prosecution is conducted by the

Enforcement Division and at its own cost, thus rights owner is not party to the prosecution and not entitled to any damages.

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Acushnet Company v Metro Gold Manufacturing [2006] 7 CLJ 557 US golf equipment manufacturer

Acushnet, which owns Titleist trade mark in Malaysia, obtained summary judgment against a local company

Enforcement division of the Ministry of Domestic Trade and Consumer Affairs raided the Defendant’s premises and seized several items bearing the Titleist trade mark.

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Acushnet Company v Metro Gold Manufacturing [2006] 7 CLJ 557 The Plaintiff sued the Defendant for

trade mark infringement and requested for a permanent injunction, order for delivery, records of all parties who supplied the Defendant with the infringing goods and damages.

The Defendant claimed that they had purchased the goods from a company known as Zonson Sports (M).

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Acushnet Company v Metro Gold Manufacturing [2006] 7 CLJ 557 The Court HELD that there was

infringement of the Plaintiff’s trade mark as it was identical to the Plaintiff’s.

There was no evidence that Zonson was an agent of the Plaintiff and nonetheless the Defendant had failed to conduct any due diligence with regards to the representations made by Zonson and cannot shift the burden onto the Plaintiff.

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Acushnet Company v Metro Gold Manufacturing [2006] 7 CLJ 557

The Court further HELD that by disposing of the goods, Zonson was itself infringing the Plaintiff’s trade mark.

It is not open to the Defendant to claim innocence, since there is no such defence in trademark law.

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Maju Perak Tepung Beras Sdn Bhd v Tiga Gajah Cho Heng Sdn Bhd [2001] 3 CLJ 241

Dispute about the use of a trademark. Both sides claim right to use it, but

Respondent is the registered user and later obtained a trade description order (TDO).

The Appellant applied to set aside TDO and even tried to rectify through the Register of Trademarks which both failed.

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The Appellant argued that ex-parte TDO is flawed because it failed to identify the sufficient infringing trademark as required under s16 Trade Descriptions Act 1972.

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As followed in Re Chuan Kuan Sang [1992] 4 CLJ 2104 and Cho Heng Rice Vermicelli Factory Co Ltd [2000] 8 CLJ 85, the applicant under s16 of the Act is obliged to identify clearly and specifically the contravening trade mark.

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The Court opined that a TDO can only be given against specific infringing trade marks if particulars of the trademark offender be known and such offender would have to made party in proceeding.

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The Court HELD that there is no other description of the mark either by reference to colour or other distinguishing feature.

Merely annexing a mark to the order without proper description does not satisfy the requirement of s16 of the Act.

The Court allowed the appeal hence setting aside the TDO.

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Passing Off - Enforcement Plaintiff may issue a letter before

action to demand Defendant to cease all tortious act immediately.

The letter will provide adequate details of the Plaintiff’s intellectual property, identify tortious act and to demand him to cease all acts.

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Passing Off - Enforcement It may include a demand providing

particulars of the infringing articles like the quantity in stock or delivery up for destruction.

The letter also may include compensation for wrongful acts and even demand a public apology.

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Passing Off - Enforcement Damages will generally include a

loss in trade or a damage to the Plaintiff’s goodwill.

Plaintiff must provide evidence of a loss of sales or a dip in transactions and have the Court to draw inferences based on the result of the Defendant’s act.

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Passing Off - Remedies An order of an inquiry is to permit

the Court to assess the amount of damage suffered by the Plaintiff due to the Defendant’s wrongful act.

A Plaintiff may also apply for an account of profits of the Defendant.

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Passing Off - Remedies It is an equitable remedy granted

by the Courts and it involves a calculation into the Defendant’s profits made from his wrongful acts.

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Passing Off - Remedies However an account of profits

involves detailed investigation of the Defendant’s books and cost of such investigation and as such not commonly resorted.

A related cause of action to passing off is defamation ie. Injurious or malicious falsehood.

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Industrial Designs Industrial Designs Act 1996 Industrial Designs Regulations

1999 It covers features of shape,

configuration, pattern or ornament applied to an article by any industrial process.

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Industrial Designs Pattern or ornament – eg. textile

pattern applied to the fabric by painting or weaving

Shape or configuration – eg. ready-made garment by making the article in that shape or configuration.

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Remedies on Industrial Design Injunction Either damages or an account of profit An order for delivery up or disposal Registered industrial design are

protected for an initial period of 5 years which may be extended for another two 5 year terms, totaling to a period of 15 years.

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Trade Secret & Confidential Information If employees are found to have

divulged confidential information while in employment or after having left the employment, the employers have the right to require the employee or former employee to stop divulging the said information and to return any documents related to the said information.

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Trade Secret & Confidential Information - Remedies Remedies available to the

employers: Interlocutory Injunctions Mandatory or prohibitory injunction

(final) Passing off Damages in conspiracy

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Yeohata Industries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2001] 6 CLJ 418 The Plaintiffs alleged the Defendants

unlawfully used the confidential information relating to the production, operation and marketing of Yeohata to profit themselves and therefore applied for interlocutory injunction to restrain the Defendants from using the confidential information.

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Yeohata Industries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2001] 6 CLJ 418 The Court HELD that the Plaintiffs were in

a better position to pay damages in the event the Defendant succeeded at the trial and the balance of convenience favours the granting of injunction.

The risks that other companies could unlawfully use the confidential information to manufacture and market a similar machine like Yeohatas and the possibility

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Yeohata Industries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2001] 6 CLJ 418 that the Defendants and their foreign

partner had conspired to injure the Plaintiffs business constituted special factors that required an injunction relief.

A mandatory injunction was granted as it would be just and equitable that the Plaintiffs interest be protected to avoid irreparable damages.

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Electro Cad Australia Pty Ltd & Ors v Mejati RCS Sdn Bhd & Ors [1998] 3 MLJ 422 The Plaintiffs claimed for specific

performance as against the first Defendant of the confidentiality agreement, action in passing off and damages on the basis of conspiracy by Defendants to obtain information from Plaintiffs and to utilize it to manufacture a product identical to the Plaintiffs product and damages in conversion.

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Electro Cad Australia Pty Ltd & Ors v Mejati RCS Sdn Bhd & Ors [1998] 3 MLJ 422 The Court HELD allowing the Plaintiffs

claims as the Defendant had divulged confidential information and trade secrets for their benefit.

The Plaintiffs were also granted an injunction over the Second Defendant for breaching his fiduciary duties to not obtain a business advantage over the Second Plaintiff.

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Electro Cad Australia Pty Ltd & Ors v Mejati RCS Sdn Bhd & Ors [1998] 3 MLJ 422 The law of passing off is related to the

protection of the goodwill associated with a business. The Second Plaintiff has done extensive advertising campaign hence generating a goodwill in their product.

Thus the adoption by the Defendants of the trademark in relation to a product

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identical to the Plaintiffs was done with intention of appropriating the Second Plaintiffs goodwill and to pass off the Defendants products as that of the Second Plaintiffs.

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Can intellectual property misappropriation constitute a criminal act?

Criminal sanctions are often warranted to ensure sufficient punishment and deterrence and to curb wrongful activity.

Violations of intellectual property rights often involved no loss of tangible assets as they do not even require any direct contact with the rights holder.

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Software Piracy -Business Software Alliance The term software piracy covers

different activities: illegal copying of programmes. counterfeiting and distributing

software. even sharing a programme with a

friend.

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Business Software Alliance Endorsed by the Ministry of Domestic

Trade and Consumer Affairs. Provides the BSA Software Audit

Programme 2006 which encourages organizations to conduct a software audit on all computers and servers ensuring the software is adequate, correct and legal.

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Companies worldwide suffers billions in losses EU/US step up efforts to fight piracy &

counterfeiting. According to FBI, Interpol and World

Organization and the International Chamber of Commerce estimates, roughly 7-8% of world trade was in counterfeit goods which was equivalent to as much as USD512 billion in global lost sales.

Bernama.com 2 Feb 2007 by Tengku Noor Hamsiah

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Recent Raids conducted

“Computer software worth RM115,300 seized” [The Star, Friday May 19 2006]

Enforcers raided an architect firm in Kota Kinabalu and seized 26 illegal copies of software and 7 computers worth RM21,000/-.

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Recent Raids conducted in KL city

“Bukit Bintang no longer hub for pirated software” [The Star, Saturday February 17 2007]

Raids (Ops Helang) were conducted from 5 December 2006 to 6 February 2007 on 82 premises at 4 shopping complexes in 2 months.

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Recent Raids conducted in KL city

The complexes involved are Sg. Wang, Low Yatt Plaza, Imbi Plaza and Berjaya Times Square.

28 arrests were made and RM2.3 million worth of CDs and 9 vehicles were seized.

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United States Trade Representative (USTR) 2005 “Special 301” Annual Review of IPR Protection - Malaysia

Malaysia is not doing enough to curtail the high piracy rates for optical media and is a substantial exporter of counterfeit and pirated products.

No protection for pharmaceutical and agricultural chemical test data from unfair commercial use.

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USTR 2005 “Special 301” Annual Review of IPR Protection - Malaysia

USA copyright industry estimated its losses in Malaysia at approximately USD188 million in 2004.

Drug counterfeiting is a growing problem in Malaysia.

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IP Court to solve IP matters The Government will establish an

Intellectual Property (IP) Court by this year(2007).

The move is to eradicate piracy and counterfeiting activities.

Intellectual Property Corporation of Malaysia (IPC) is organizing seminars for prosecuting officers to enhance their knowledge in IP laws.

Bernama.com 23 May 2006

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IP Court to solve IP matters Main IP laws dealing with criminal

provisions are Copyright Act that dealt with piracy and the Trade Descriptions Act 1972 that dealt with counterfeiting.

The Domestic Trade and Consumer Affairs may amend the copyright laws to prosecute landlords or premise owners who allowed their tenants to sell counterfeit products.

Bernama.com 23 May 2006

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Factories warned if producing unauthorized optical disc The Government warned licensed optic

disc factories nationwide that they would be closed down if caught producing pirated video or music discs.

Between 2001 and 2006 18 Sept, 902 raids were conducted on these factories and recorded 39 cases of various offences.

Article - Sept 25 2006 Sun2Surf(theSun)

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Factories warned if producing unauthorized optical disc 40 optical disc production machines

worth RM72.6 million were seized. In the first 6 months of 2006, Ministry

officers conducted 179,195 raids nationwide.

39,346 cases were recorded involving the arrest of 1,948 vendors for selling pirated discs worth RM475 million.


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Factories warned if producing unauthorized optical disc According to statistics gathered by

6 local authorities in Klang Valley, 166 raids were made on vcd/cd sales centre in their respective areas, where 214,091 discs worth RM1.1 million were seized.


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Piracy v Counterfeiting Piracy describes the act of

reproducing movies, music, books and other copyrighted works without permission from the copyright owner or illegitimate copying.

Counterfeit describes fake goods or goods packed so as to resemble the original.

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Types of Piracy 1) Piracy in the home. 2) Copying of sound recordings from

an audiotape onto a compact disc. 3) The use of copying machines to

make copies of literary works. 4) Home copying of sound recordings 5) Home copying of broadcasts. Flint, A Userguide to Copyright

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Types of Piracy 6) Home copying of computer

programmes and video games. 7) Commercial piracy and

counterfeiting-industrial designs and artistic works ie. Tennis rackets, golf club, shirts printed with patterns which copy registered designs, etc.

Flint, A Userguide to Copyright

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Types of Piracy 8) Piracy of broadcasts and cable

programmes ie. Receiving a programme in a broadcasts or cable programme with intent to avoid payment.

9) Commercial piracy and counterfeiting-cinematograph films ie. Copying an original feature film from its 35mm version onto video tapes.

Flint, A Userguide to Copyright

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Types of Piracy End user or corporate copying Counterfeiting Hard disk loading-OS installed

without supplying original CDs, end user license agreement, certificate of authenticity, etc

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Types of Piracy Mischannelling-distribution of

software under special discount licenses and then redistributed to others who do not qualify for these licenses

Internet Piracy

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The position in Malaysia Criminal Sanctions for IP are

available under: Copyright Act 1987 Trade Description Act 1972 Optical Disc Act 2000

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S 41 of the Copyright Act 1987 Any person who during subsistence of

copyright in a work or performers’ right:- a) makes for sale or hire any infringing

copy; b) sells, lets for hire or by way of trade,

exposes or offers for sale or hire any infringing copy;

c) distributes infringing copies; d) possesses, otherwise that for his private

and domestic use, any infringing copy;

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S 41 of the Copyright Act 1987

e) by way of trade, exhibits in public any infringing copy;

f) imports in Malaysia, otherwise that for his private and domestic use, any infringing copy;

g) makes or has in possession any contrivance used or intended to be used for the purposes of making infringing copy;

h) circumvents or causes the circumvention of any effective technological measures;

i) removes or alters any electronic rights management information without authority;

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S 41 of the Copyright Act 1987 j) distributes, imports for distribution

without authority, works or copies of works in respect of which electronics rights management information has been removed or altered without authority,

shall, Unless he is able to prove that he acted in good faith and had no reasonable grounds for supposing that copyright or performers’ right would or might thereby be infringed, be guilty of an offence.

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Trade Description Act 1972(TDA) The TDA prohibits the making of false

trade descriptions. The TDA makes it an offence for any

person to, in the course of trade: (1) apply a false trade description to

any goods or (2) supply or offer to supply any good to

which a false trade description is applied

Hence, in some way it includes counterfeit products.

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Optical Disc Act 2000 (OPA) The OPA establishes a licensing and

regulatory framework for all processes or activities that are involved in manufacture of optical disc.

This Act aims to reduce piracy of IP by requiring all makers of optical disc to obtain licenses from both the Ministry of International Trade and industry and the Ministry of Domestic Trade and Consumer Affairs

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Optical Disc Act 2000 (OPA) Under this Act, any person who

manufactures optical disc without a valid license or manufactures optical disc in a place other than the licensed premises commits an offence.

The Act also requires the licensee to cause the optical disc to be marked with the manufacture code.

Failure to do so will amount to an offence.

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Offences under Optical Discs Act 2000 - Statistics s4 ODA 2000(producing OD

without license): 2004 - 6 cases and RM13.5 million

in seizure value 2005 - 7 cases and RM27.5 million

in seizure value Annual Report of Ministry of Domestic Trade and Consumer Affairs

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Offences under Optical Discs Act 2000 - Statistics s19 ODA 2000(producing OD without

displaying the Plant Code): 2004 - 4 cases and RM1.9 million in

seizure value 2005 - 5 cases and RM300,000/- in

seizure value Total of 22 cases and RM43.2 million

in seizure [2004-2005] Annual Report of Ministry of Domestic Trade and Consumer Affaris

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Conclusion Malaysia provides a well established

framework in the protection of IP rights. Owners of IP rights should also remain

proactive in enforcing their IP rights against infringement,

In view of the growing importance in Malaysia, investment in the protection of IP rights has become increasingly vital to protect the competitive advantage accorded by IP rights.

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END

Assisted by:Kenneshwaran Kandiah LLB(Hons)Sum Wai Hoe LLB(Hons) CLP

EnforcementOfIPR

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