Trademark procedures and strategies: Malaysia

Legal framework

Trademarks in Malaysia are governed by the new Trademarks Act 2019 and the Trademarks Regulations 2019, which came into effect on 27 December 2019 and repealed the Trademarks Act 1976 and the Trademarks Regulations 1997. The administration and practice of these laws come under the purview of the Intellectual Property Corporation of Malaysia.

Malaysia is also a member of various trademark-related and WIPO-administered treaties, including, among others:

• the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (27 December 2019);
• the Nice Agreement Concerning the International Classification of Goods and Services (28 September 2007);
• the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (28 September 2007); and
• the Paris Convention for the Protection of Industrial Property (1 January 1989).

Malaysia has been a member of the World Trade Organisation’s Agreement on Trade-related Aspects of Intellectual Property Rights since 1 January 1995.

Unregistered marks

Under the law, legal action against trademark infringement is available only when a registered mark is infringed. However, all is not lost for pending or unregistered marks, as there are certain common law rights in the form of the tort of passing-off accorded to such marks since Malaysia practises the ‘first to use’ principle, provided that these marks have attained goodwill and reputation in the country. As to whether there is sufficient goodwill in Malaysia, that is a question of fact that depends on both the quantity and quality of evidence that can be tendered. The burden of proof in a common law action for passing-off is definitely higher when compared to a registered trademark that enjoys some presumption of rights in the first instance. Thus, protection regarding registration would always be recommended.

Registered marks

Section 17 of the Trademarks Act provides that any person who claims to be the genuine owner of a trademark may apply for the registration of that trademark if:

• the person is using or intends to use the trademark in the course of trade; or
• the person has authorised or intends to authorise another person to use the trademark in the course of trade.

Similar to the previous law, no power of attorney is required by a representative or trademark agent before filing.

In the spirit of long-overdue modernisation, the act has finally taken the giant leap of expanding the types of trademark recognised for registration in Malaysia. Non-traditional marks have been considered conventional for a while now in many mature IP markets – including shape, colour, sound, scent, hologram, positioning and sequence of motion marks; with the caveat that they must be signs capable of being represented graphically.

In a similar vein of expanding the scope of registrable marks, collective marks are now protected under the new act and are defined as “a sign distinguishing the goods or services of members of the association which is the proprietor of the mark from those of other undertakings”.

Some culling of the previous Trademarks Act 1976 means that archaic trademark concepts such as ‘defensive marks’ and ‘association of marks’ have been abolished under the new statute.

While there is wide recognition of what can be protected under the 2019 act, there is also ample exclusion from protection. Under the absolute grounds now listed in Section 23 of the act, some of the marks that will be refused by the registrar for registration include, among others:

• trademarks devoid of any distinctive character;
• signs consisting exclusively of a shape resulting from the nature of the goods themselves, necessary to obtain a technical result or shape giving substantial value to the goods;
• trademarks that are of such a nature as to deceive or mislead the public regarding the nature, quality or geographical origin of the goods or services;
• trademarks that are contrary to public interest, morality, interest or security of the country;
• trademarks consisting of the flag of a country, national emblem or royal arms; and
• trademarks consisting of an international non-proprietary name as declared by the World Health Organisation.

Procedures

Search

The trademarks register will be made available for public inspection (subject to some prescribed conditions) by way of application through the form determined by the registrar together with the payment of the prescribed fee.

Section 13 of the Trademarks Act continues to make available preliminary advice and search by the registrar. On receiving such a request, the registrar may provide such advice and search results to any person who proposes to apply for the registration of trademark as to whether the mark is prima facie a registrable trademark. Such advice and results are confidential and will not be made available for public inspection. Notwithstanding this, the registrar, after further investigation or consideration, may raise any refusal to the effect that the trademark is not registrable. In such circumstances, the applicant will be entitled to have refunded any fee paid on the filing of the application on giving notice of the withdrawal of the application within a prescribed period.

Application

Another measure taken by the act to make trademark administration more efficient is allowing multiple classes to be designated in a single application, replacing the need to file one application per mark, per class. The consolidation of classes will reduce cost, paperwork and formal examination time. Along with this positive change is the corresponding allowance for division and merger of applications so that trademark owners can better manage their portfolio.

A series of trademarks (ie, a single application consisting of not more than six representations of a mark, resembling each other in material particulars) may be filed.

One particular provision found in the act states that the application date of a trademark in Malaysia should be its filing date, regardless of the priority claimed from a Paris Convention application. Any such priority date is limited in purpose for determining the precedence of rights during examination.

Examination

The registrar will examine a trademark application pursuant to Section 29 of the act, including a search of earlier trademarks to the extent considered necessary. In the act’s pursuit of expediency, a trademark applicant is now allowed one strike only in the form of the registrar’s provisional refusal of the application based on absolute (inherent registrability) and/or relative (conflict with earlier or well-known marks) grounds within the act. The applicant has the opportunity to make representations, amend the application or furnish evidence or information within such period as specified in the written notice from the registrar. If the registrar maintains the refusal following the applicant’s one-off submissions, they will issue a total provisional refusal where the applicant is forced to appeal to the High Court if it is to avail itself to another round of argument.

Opposition

The Trademarks Act and its accompanying regulations provide for a robust opposition proceeding; involving back-and-forth exchange of information and documents between the parties and before the registrar. It begins with the opponent filing its grounds and notice of opposition within two months of the publication of a trademark. Once the opposition is filed, the applicant must file a counter-statement within two months of receiving the notice. Within two months of the receipt of the statement, the opponent must file their evidence by way of statutory declaration in support of the opposition. Two months thereafter, it will be the applicant’s turn to file their statutory declaration in reply and to support the opposed mark.

The opponent then has a choice of filing a further evidence-in-reply, strictly in reply to the applicant’s declaration. Thereafter, no further evidence may be filed by either side, except by leave of the registrar. On completion of evidence, the registrar will request both parties to file written submissions. The registrar is entitled to make an order to:

• refuse to register the trademark;
• register the trademark absolutely; or
• register the trademark subject to such conditions or amendments that they think fit.

The registrar’s decision is subject to appeal to the High Court.

At each stage of the opposition proceedings the registrar has strict control over how long the applicable deadline can be extended in order to minimise any delay or abuse of proceedings by the parties. To avoid miscommunication, there is also a statutory requirement for a party to file an affidavit of service to the registrar within three days of serving a copy of the relevant documents to the other party.

The Trademarks Act provides a registered trademark owner with specific grounds of opposition to weaponise in administrative proceedings before the registrar. It even allows for continuation of the opposition by a successor-in-title to the trademark in proceedings originally commenced by its predecessor. The current practice by the registrar to defer any opposition proceedings on request by the opposition parties is solidified in the act, as long as it falls under prescribed circumstances.

Registration

On successful registration, only a sealed notification will be issued by the registrar. If the registered owner would like a certificate of registration, a request with prescribed fee would have to be submitted. The presumption (with exceptions) that a registration is valid and conclusive will begin five years after registration, instead of seven years as under the 1976 act. Renewal of a multiple class registration can be selective, but the classes that will not be renewed must be removed by way of filing a division.

Removal from register

Besides voluntary cancellation by the owner, registered owners should be aware that their registrations could be challenged in various ways under the Trademarks Act. A registered trademark could be revoked by the registrar within 12 months of the date of its registration, on the basis that it was a wrongful grant. More importantly, the registration could be revoked by the court (on application by an aggrieved person), under different prescribed circumstances, including three years’ non-use from the date of issuance of the notification of registration, or suspended use for a continuous three-year period without proper reasons.

A registered trademark can also be invalidated by the court (on application by an aggrieved person) based on absolute or relative grounds under the act, fraud or misrepresentation in the procurement of the registration.

Enforcement

In general, and to a certain extent, both registered and unregistered trademarks are protected in Malaysia. Most enforcement of trademark rights are usually initiated in the IP-specialised High Court in Kuala Lumpur. Unregistered trademarks are protected under common law rights, especially in the tort of passing off. In fact, even during the examination of a trademark, the registrar will refuse, under relative grounds of Section 24(4), to register it if the mark’s use in Malaysia is prevented by virtue of any rule of law protecting an unregistered trademark or other sign used in the course of trade, including under the law of passing off.

Section 159 specifically provides that nothing in the act will be deemed to affect the right of action against any person for passing off goods or services as those of another person or the remedies in respect of the goods or services. The same section, however, provides that no person will be entitled to initiate any action to prevent or to recover damages for the infringement of an unregistered trademark. In other words, trademark infringement action is reserved for those marks that have attained registration.

The scope of trademark infringement and its exemptions has been substantially expanded by the new statute. There could now be infringement even in the use of a similar mark on similar (as opposed to identical) goods or services to those registered by the plaintiff. Liability will stick to secondary users who know or have reason to believe that such use is without the trademark owner’s authorisation.

The typical remedies that will requested and granted are:

• permanent injunction to prohibit further infringement;
• full discovery;
• delivery-up;
• declarations;
• general and punitive damages; and
• costs.

The remedies will have to be pleaded in the statement of claim. It is possible to obtain preliminary injunctions where the applicant must show that:

• a serious issue is to be tried;
• damages are not an adequate remedy; and
• the balance of convenience is in favour of granting the preliminary injunction.

To give more bite to the reliefs already available to a registered owner, exemplary damages akin to aggravated damages can now be ordered by the court where appropriate, including where there is flagrancy in the infringement or a need to punish the defendant. The factors that are normally considered for a plea in exemplary damages include:

• whether the defendant deliberately infringed;
• whether the defendant knew of the plaintiff’s registered rights;
• the extent of the defendant’s business activities and its financial position;
• the duration of the defendant’s infringing activities; and
• the extent to which the defendant’s infringing conduct offends the public sense of justice and propriety.

As anticipated, it is now an actionable offence under the Trademarks Act to threaten infringement without basis, although a mere notification that a trademark is registered does not constitute a threat. An aggrieved person may seek a declaration from the court that the threats are unjustified, that damages for loss suffered from the threat are available and that the court will injunct against any continuation of such threat. This will curtail any errant intimidation from persons who have no business enforcing trademark rights.

Many of the criminal offences, penalties and enforcement provisions in relation to counterfeit trademarks under the Trade Descriptions Act 2011 have been moved over to the Trademarks Act. Most notably, after the amendment of both these statutes, there is no longer any need to obtain a trade description order to act against a counterfeit trademark that is not identical to the registered mark. Instead, the registrar’s verification whether there are confusing similarities will be prima facie evidence in such legal proceedings.

Ownership changes and right transfers

Registered trademarks in Malaysia have been finally accorded due legal recognition under the Trademarks Act as personal or movable property and thus may be the subject of a security interest in the same manner as any other such property. Together with other registrable transactions (eg, assignment of a trademark, security interest, placing a charge or a court order for transfer of ownership), it must be noted that these transactions are not enforceable against another conflicting interest unless they have been recorded with the registry. The only statutory exception would be for trademark licences, where registration will remain non-mandatory as per the current position. However, should a trademark licence be recorded with the registry, the public will be deemed to have notice of the licence.

Licensing provisions mean bidding farewell to the archaic term ‘registered user’. Licences are effective so long as they are put down in writing and signed by the licensor. The terms ‘exclusive licence’ and ‘sub-licensing’ are expressly recognised; with new rights of an exclusive licence being introduced as distinct from those of non-exclusive licensees. Even losses suffered by a licensee will be considered by the court in infringement proceedings.

Related rights

The refusal grounds under Section 24(4) of the act provide that during the examination of a trademark, the registrar will refuse to register if the mark’s use in Malaysia is prevented by virtue of an earlier right, including under copyright and industrial design law.

So as to not artificially extend industrial design rights (which are finite and limited to a maximum 25-year term in Malaysia) to the realm of trademark rights (which are infinite, if renewed on time), the registration of shape marks is prohibited under the act where:

• the shape results from the nature of the goods themselves;
• the shape is necessary to obtain a technical result; or
• the shape gives substantial value to the goods.

Online issues

The act makes no specific provisions for online use of registered and unregistered marks as domain names. Nonetheless, Section 162(2)(p) states that the minister may make regulations for the purpose of regulating matters relating to the use of trademarks online. Following this, so far Regulation 6 of the Trademarks Regulations provides that when it comes to the use of a sign or trademark on the Internet, the registrar or the court will have regard to the provisions of the act and regulations and the Joint Recommendation Concerning Provisions of Marks, and Other Industrial Property Rights in Signs on the Internet.

In Malaysia, the registration of domain names is governed by the Malaysian Network Information Centre Berhad (MyNIC), which is an agency under the Ministry of Science, Technology and Innovation. MyNIC allows any domain name to be registered as long as it is available, but it does have a policy to which all domain registrants are bound: the MyNIC’s Domain Name Dispute Resolution Policy (MyDRP). For example, to prove cybersquatting, the complainant must prove that the domain name is identical or similarly confusing to its trademark, and that the domain name was registered and/or used in bad faith.

In the event that cybersquatting is successfully proven, the complainant will be unable to seek an order for damages. The MyDRP states that there are only two remedies:

• to require the cybersquatter to transfer the domain name to the complainant; or
• to require the cybersquatter to delete the contentious domain name.

If a party is dissatisfied with MyDRP proceedings and wishes to take the case to court or through another dispute resolution mechanism (eg, ICANN, WIPO or the Asian Domain Name Dispute Resolution Centre), they can do so provided that MyNIC is provided with such documentation. Failure to do so would mean MyNIC implementing the decision from the MyDRP proceedings.