EMERG ING IP RIGHTS COUNTRY REPORT - MALAYSIA

ASIAN PATENT ATTORNEYS ASSOCIATION

TEO BONG KW ANG Advocates ft Solicitors

Registered Trade mark, Industrial Design ft Patent Agents

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GOH NGE SEUNG Advocates ft Solicitors,

Registered Trademark, Industrial Design ft Patent Agents

Emerging IP Rights - APAA, KOREA 2010

Country Report - Malaysia

RECENT DEVELOPMENTS

A. Personal Data Protection

The Personal Data Protection Act 2010 has been published in the Gazette on 10 June 2010 but it is yet to be enforced. It is widely speculated that the Act will come into force before the second quarter of 2011, once the Personal Data Protection Commission is set up.

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The Act is not limited to any specific sectors or types of business but it is important to note that the Federal and State Government have been exempted from the ambit of the Act.

The Act is applicable to all "personal data" gathered as a result of any transaction which is of commercial nature regardless whether contractual or not.

The main purpose of the Act is to ensure that consumers' personal data processed by the related business organizations can only be used for the specified commercial activities and would not be abused. The law would cover the processing of private data, sensitive personal data, utilization of such data. It is aimed at protecting privacy rights and prevention of data abuse.

B. New Plants Varieties

The Ministry of Agriculture and Agro-based Industry Malaysia has been empowered to administer the New Plant Varieties Act 2004, which came into force on 1st January 2007.

The Act seeks to protect the contribution made by farmers, local communities and indigenous people in the creation of new plant varieties. It encourages research and development in the development of the breeding of new plant varieties by the public and private sectors. Under this Act, breeders (which include indigenous people) are allowed to register new plant varieties with the Ministry and claim the protection of "breeder rights". According to the Act, a holder of a "breeder right" shall have the right to carry out the following acts, i.e. producing or reproducing, offering for sale, marketing, exporting and stocking the new plant variety. However these rights shall not extend to certain acts such as any act done privately on a non commercial basis or for experimental purpose. The Act also gives the authorities the right to grant compulsory license after 3 years of registration subject to conditions.

As at the date of this report, there are a total of 54 applications for registration of new plant varieties submitted, most of them are in the category of forest plants. The other applications include 11 applications for cereals and 9 for industrial crops. Unfortunately none of the applications have proceeded to registration.

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C. Geographical Indications (G.I.)

1. G.I. Registration System

The Malaysian Government has passed the Geographical Indications Act 2000 which came into force on 15 August 2001. The Act provides for an avenue for producers in a geographical area, competent authorities, trade organizations or associations to register their Gis. However, registration is not compulsory. Unregistered Gis are protected as well under the Act (see section 3).

Based on the statistics released by the Intellectual Property Corporation of Malaysia (MyIPO), there are 22 G.I. applications being filed between 2003 and March 2010. Out of these 22 applications, 20 of them are for local geographical indications. Some of the local G.I. that have been registered include the following: "Sarawak Pepper", "Sabah Tea", "Baric Rice" and "Borneo Virgin Coconut Oil".

To date, there are only 2 foreign registered G.I. in Malaysia and they are "Scotch Whisky" and "Pisco". The "Scotch Whisky" registration, which is obtained by The Scotch Whisky Association based in Edinburgh, Scotland is the first European G.I. registration in Malaysia.

The number of registrations of G.I. as reported by MylPO is considerably small compared to the registrations in Europe. It is believed that there are more than 6,000 G.I. registered for products such as wine, spirit, cheese and chocolates in Europe. In Japan, the government is actively promoting the registration of G.I. through the concept of "one village one product" .

MylPO has continuously taken steps to increase the awareness among the Malaysian public about the possibility and importance of registration of G.I..

2. Recent Case Laws on G.I.

There are two reported decisions concerning G.I. which emanated from the Intellectual Property High Court of Kuala Lumpur. The first case concerns the registration of "PONNI" as a trade mark by a Malaysian trader, which the Agricultural and Processed Food Products Export Development Authority of India (APEDA), Tamil Nadu Agricultural University (TNAU),

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Indian farmers and two exporters claimed to be wrongfully registered as the word "paNNI" is in fact a descriptive name for a particular variety of rice originated from Tamil Nadu, India.

The learned IP Court Judge ruled in favour of the Indian parties and held that the Malaysian company was not entitled to register the word "paNNI" as a trade mark as it was not a word invented by them. Further, the word "paNNI" means Cauvery River in Tamil language, where the paNNI rice was grown.

In another case emanated from the same court, the learned judge has ruled that the word "SWISS" is qualified as a geographical indication. However, in an action for passing off and breach of G.!" his lordship held that the Defendant's logo "Maestro SWISS" does not amount to a use denoting geographical indication. The learned judge is of the view that since the packaging of the Defendant's product bears distinguishing words which clearly indicate that the Defendant is a Malaysian manufacturer and that its chocolate products are made in Malaysia, the inclusion of the word "SWISS" in its logo will not mislead and deceive the Malaysian public into thinking that the chocolate originates from Switzerland.

Further, the learned judge held that the word "SWISS" was not used as a form of geographic indicator, unlike in the case of "Sarawak Pepper" or "Sabah Tea". Since the words "Maestro SWISS" and the Defendant's logo are presented in a way which shows that they are intended to be used as a corporate logo and not a geographical indicator, confusion or deception would not arise.

D. Biodiversity Conservation

The National Biodiversity Policy was recently implemented to promote the development of biodiversity in Malaysia. There are many programmes and activities organized pursuant to the National Biodiversity Policy, such as:

i) improve the scientific knowledge base;

ii) enhance sustainable utilization of the components of biological diversity;

iii) develop a centre of excellence in industrial research in tropical biological diversity; iv) strengthen the institutional framework for biological diversity management;

v) strengthen and integrate conservation programmes;

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vi) integrate biological diversity considerations into sectoral planning strategies; vii) enhance skill, capabilities and competence;

viii) minimize the impact of human activities on biological diversity; ix) exchange of information;

x) establish funding mechanisms; and

xi) review legislation to reflect biological diversity needs Legislation framework.

E. Intellectual Property Commercialization Policy

To encourage and facilitate new innovations, the Government of Malaysia has put in place various funding schemes for the promotion of research and development. The various funds made available will create a conductive environment for the carrying out of R8:D activities as well as the subsequent patenting and commercialization of local inventions and innovations. This will encourage and assist the small and medium industries (SMI) and small medium enterprise (SME) to venture into creating more value-added technologies and businesses.

F. Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure

One of the biggest advantages of the Budapest Treaty is that it allows the deposition of microorganisms at an international depositary authority which is recognized by the member states. This will facilitate the registration of patents involving microorganisms. The Budapest Treaty will enable the patent applicant from any of the member states to only deposit one sample of the microorganism with the recognized authority. This will obviate the need to deposit such biological materials with all the patent offices worldwide. This arrangement will significant reduce the costs and risks involved in the deposition of biological materials or microorganism and at the same time, minimizes the need for patent offices to spend additional budget for the storage of such biological materials.

Nevertheless, despites the benefits mentioned above and the ratification of the Treaty by 73 countries worldwide, Malaysia has yet to take the steps to ratify the Budapest Treaty.

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G. Competition Act

In addition to the Personal Data Protection Act, the Malaysian government has also recently passed two important legislation on 2 June 2010, namely Competition Act 2010 and Competition Commission Act 2010. The Competition Act applies to any commercial activity, both within and outside Malaysia, provided that such commercial activity transacted outside Malaysia has an effect on competition in any market in Malaysia. In addition, commercial activity is defined to mean any activity of a commercial nature, but does not include any direct or indirect exercise of government authority, any activity based on the principle of solidarity and any purchase of goods or services for purposes other than offering such goods and services as part of an economic activity.

The Competition Act specifically prohibits any "horizontal" and "vertical agreement" which carries an adverse effect in preventing, restricting or distorting competition in any market for goods or services. Activities such as direct or indirect fixing of purchase or selling price, limiting or controlling the production, market outlets or market access, technical or technological development, investment or performing an act of bid rigging is deemed to carry an effect on preventing, restricting or distorting competition in any market for goods or services.

Under the Competition Commission Act 2010, a commission will be establish and some of its functions include acting as an advocate in competition matters; issuing guidelines in relation to the implementation and enforcement of competition laws; to implement and enforce provisions of the Competition law and to advise the Minister or any other public or regulatory authority on all matters concerning competition.

Since the Competition Commission has the power to adjudicate competition matters, it also inherits the power to impose penalty for the infringement of the provisions of the competition laws. If the relevant parties are not satisfied with the decision of the Competition Commission, the parties can submit an appeal to the Competition Appeal Tribunal and the Competition Appeal Tribunal may confirm or set aside the decision. A decision by the Competition Appeal tribunal is final and binding on the parties to the appeal.

9 Septem ber 2010

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