Malaysia: Critical Analysis : Malaysia's Trademarks Bill 2019

Last Updated: 29 July 2019
Article by Madhur Tulsiani

INTRODUCTION

Malaysia is in the process of acceding to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol), adopted in Madrid on June 27, 1989, in order to take advantage of the anticipated growth and development in the domain of trademarks owing to the exponential increase in established global businesses and ever growing enterprises, both real and virtual[1].

The first reading of the Trademarks Bill 2019 was presented at the Parliament on April 9 and was debated on 2nd July before passing it in the lower house, or Dewan Rakyat. Following this, the Trade Descriptions (Amendment) Bill 2019 and Trademarks Bill 2019 were passed with a simple majority following debate among eight MPs[2].

Current scenario of Trademark protection in Malaysia

Trademark law, till date, is governed by the Trademarks Act, 1976[1] and Trademark Regulations, 1997[2]. Even though both the Act as well as the Regulations have received a decent number of amendments[3], the time has come for Malaysia to bring a fresh Trademark Act in order to fulfill its international obligations.

1. IMPORTANT FEATURES OF THE TRADEMARKS BILL 2019[4]

The bill aims to provide monetization for trademarks by using it as a collateral against borrowed funds as an intellectual property asset, it was provides provisions for the recognition of non – traditional trademarks, protection of collective marks, single filing International Trademark Registration Process, lower fees, substantive examination, and efficiency in trademark enforcement and opposition proceedings. A few major changes are worth discussing in detail.

a. Madrid Protocol and single filing procedure of International application

The accession to the Madrid Protocol was part of Malaysia's obligation under the Asean Economic Community and commitment to the Asean Blueprint 2025.The move is long overdue as Malaysia was previously one of two members of Asean that had yet to accede to the Madrid Protocol[7]. With the enactment of this bill[8], Malaysia would be the latest country to accede to the Madrid Protocol.

The Madrid Protocol[9] is an international registration system which provides for the registration and administration of trademarks in up to 104 contracting parties through a single procedure, with a single administration, in a single language. Local businesses can now protect their trademarks internationally, in a more cost-effective manner. The local companies can now file an International Application at the International Bureau. From there, these companies can designate the countries they are interested in[10]. This also makes foreign business entities to designate Malaysia for protection of their trademarks.

b. Different types of marks recognized/ registered/ Registration of Non-traditional marks

Under Section 2(1) of the new bill, the definition of sign has been widened and now includes "any letter, word, name, signature, numeral, device, brand, heading, label, ticket, shape of goods or their packaging, colour, sound, scent, hologram, positioning, sequence of motion or any combination thereof.[11]" as in comparison with the present Trade Marks Act, 1976 which under Section 3 defines the term "mark" as including "a device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof.[12]", thus incorporating non – traditional trademarks such as scent, sound, shape, colour, holograms,positioning and motion marks[13].

(1) Recognition of collective marks

The new bill also definesrecognizes collective marks as "a sign distinguishing the goods or services of members of the association[14]", thereby expanding the ambit of trademark filing and registration processes.

(2) Multi class trademark applications

The new bill has also facilitated trademark filing where an application made to the Registrar under Section 17(2), can be made in a single application "listing goods or services belonging to several classes of classification[15]". This has particularly facilitated business through the ease of filing a trademark in respect of various goods and services under one application.

(3) Use of trademark as financial instrument

Section 81(e) of the new bill interprets the word "security" as "any sum of money in cash or other monetary instrument as determined by the Registrar[16]". Further, Section 62 defines the nature of the registered trademark as "a personal or moveable property and may be the subject of a security interest in the same way as other personal or moveable property[17]". Hence, on careful simultaneous reading of both the provisions of the Act, it can be understood that a registered trademark is practically an asset with easy liquidity as it can be used as collateral to obtain financing from financial institutions[18].

(4) Remedies against groundless threats

Further, Section 61(2) of the new bill elaborates upon the remedies available against groundless threats of infringement proceedings in the form of declaration, injunction or damages[19].

(5) Penalty for false representation/ misrepresentation

Under Section 104 of the new bill[20], any person who is found to falsely represents that a trademark is a registered trademark, makes a false representation as to the goods or services for which a trademark is registered, with the knowledge of it being false, will be liable to a fine not exceeding ten thousand ringgit.

CONCLUSION

Impact on businesses/ trademark applicants

As a consequence, the bill is set to significantly change the existing Malaysian trade mark landscape[21]. This long overdue amendment to trade mark laws will also help Malaysia become an attractive base for trade mark filings[22]. A total revamp of TMA or the introduction of a new act will put Malaysia on a new frontier of trademark development, on international and national fronts. A modern, lean and efficient trademark law is expected to transform Malaysia into one of the competitive players in trademark economy of the 21st century, ranging from a wide variety of businesses including e – commerce[23]. It was also stated by Chong Chieng Jen, Minister of Deputy Domestic Trade and Consumer Affairs that this bill after being enacted and enforced will offer trademark protection for businesses and assist them in expanding their products internationally[24].

Way forward

As the bill inches closer to its enactment, it is yet to be passed by the Senate or the Dewan Negara. After the bill is passed in the Upper House, it will be sent for the assent of Yang di-Pertuan Agong by affixing a public seal to it and its publication in the official gazette under Article 66(5) of the Federal Constitution of the Yang Di-Pertuan Agong[25].

References:

[1]https://www.nst.com.my/opinion/letters/2019/03/465405/new-trademark-frontier

[2]https://themalaysianreserve.com/2019/07/03/malaysia-a-step-closer-to-madrid-protocol-as-dewan-rakyat-passes-trademarks-bill/

[3]http://www.myipo.gov.my/wp-content/uploads/2016/09/Trade-Marks-Act-1976-Act-175.pdf

[4]https://drive.google.com/file/d/0ByGRaQs_wAHLRzk4Q2gtbjFQc0E/view?usp=drive_open

[5]http://www.myipo.gov.my/en/trade-marks-act-1976/

[6]http://www.cljlaw.com/files/bills/pdf/2019/MY_FS_BIL_2019_10.pdf

[7]https://themalaysianreserve.com/2019/07/03/malaysia-a-step-closer-to-madrid-protocol-as-dewan-rakyat-passes-trademarks-bill/

[8]https://www.aseanlip.com/malaysia/iplaw/legislation/bill...trademarks...2019/AL60926

[9]https://www.wipo.int/edocs/lexdocs/treaties/en/madrid-gp/trt_madrid_gp_001en.pdf

[10]http://www.kass.com.my/news/7-things-all-businesses-must-know-about-malaysias-new-trademarks-act/

[11]http://www.cljlaw.com/files/bills/pdf/2019/MY_FS_BIL_2019_10.pdf

[12]http://www.myipo.gov.my/wp-content/uploads/2016/09/Trade-Marks-Act-1976-Act-175.pdf

[13]http://www.kass.com.my/news/7-things-all-businesses-must-know-about-malaysias-new-trademarks-act/

[14]https://www.aseanlip.com/malaysia/iplaw/legislation/bill...trademarks...2019/AL60926

[15]https://www.aseanlip.com/malaysia/iplaw/legislation/bill...trademarks...2019/AL60926

[16]http://www.cljlaw.com/files/bills/pdf/2019/MY_FS_BIL_2019_10.pdf

[17]https://www.aseanlip.com/malaysia/iplaw/legislation/bill...trademarks...2019/AL60926

[18]http://www.kass.com.my/news/7-things-all-businesses-must-know-about-malaysias-new-trademarks-act/

[19]http://www.cljlaw.com/files/bills/pdf/2019/MY_FS_BIL_2019_10.pdf

[20]https://www.aseanlip.com/malaysia/iplaw/legislation/bill...trademarks...2019/AL60926

[21]http://www.conventuslaw.com/report/malaysia-trade-mark-bill-2019/

[22]http://www.conventuslaw.com/report/malaysia-trade-mark-bill-2019/

[23]https://www.nst.com.my/opinion/letters/2019/03/465405/new-trademark-frontier

[24]https://themalaysianreserve.com/2019/07/03/malaysia-a-step-closer-to-madrid-protocol-as-dewan-rakyat-passes-trademarks-bill/

[25]http://www.asianparliament.org/uploads/Country/Members/malaysia/malaysia%20const.pdf

[26]http://www.kass.com.my/news/7-things-all-businesses-must-know-about-malaysias-new-trademarks-act/

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