Trademarks Act 2019 in Malaysia Brings Intellectual Property Protection to International Standards

The new Trademarks Act 2019 (“TMA 2019”), which repealed the previous Trade Marks Act 1976 (“old Act”), has fundamentally changed the trademark law and registration system in Malaysia following its accession to the Madrid Protocol administered by the World Intellectual Property Organisation (“WIPO”)  in Geneva, Switzerland that came into effect on 27 December 2019.

The Madrid Protocol or Madrid System governed by the Madrid Agreement provides a compliant mechanism to ease registration and management of trademarks through an international registration system whereby trademark owners can file their trademarks for goods and services in multiple jurisdictions. Thereafter, trademarks owners will get protection coverage in over 125 countries with 109 members. It is mandatory to refer to the Nice Classification for the national and international registration of classes of marks.

The accession allows Malaysia to stay abreast of and provide for the evolving nature of protection needed by trademark owners. The expansion is reflected in the legislative changes that broaden the definition of ‘trademark’ for it to be compatible with the legal framework established within the international community. The Intellectual Property Corporation of Malaysia (“MyIPO”) is the acting Office of Origin, under the Director-General of MyIPO as the Registrar of Trade Marks in Malaysia, and empowered to implement the rules in accordance with the Madrid Protocol concerning the International Registration of Trade Marks.

Definition of Trademark

In Malaysia, the definition of “Trademark” prescribed under section 3 of TMA 2019 is as follows:

(1) “Trademark” means any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings.

(2)  A sign may constitute a trademark even though it is used in relation to a service ancillary to the trade or business of an undertaking and whether or not the service is provided for money or money’s worth.

(3)  References in this Act to a trademark include, unless the context otherwise require, references to a collective mark or certification mark.”

Trademark is essentially a form of identification of goods and services used to represent a company in the course of trading. Customers are able to distinguish one product from other identical or similar products in the marketplace through its sign, design or expression in which it encompasses its own unique characteristics, features and quality.

Key Aspects of TMA 2019

Under the old Act in Malaysia, registration of a trademark via single-class filing system essentially provides for filing one application per mark and per class, and likewise to protect such trademarks in other countries by filing national applications in each of the countries separately. However, under the new implemented TMA 2019, trademark owners are able to conduct registration by way of:

1. “Multi-class” filing system – Trademark owners can now file under one single application with multiple classes of goods and services, in the applicant’s chosen language (English, French or Spanish) and one set of fees in a single currency paid to the WIPO in order to designate the different countries of interest.  
2. International registration – Trademark owners can file for an international registration application through their local intellectual property office of origin and designate Malaysia, in return Malaysia can designate one or more of the over 100 member countries under the Madrid System in which they register their trademarks. Similarly, it would offer more foreign brand owners to seek their trademark protection in Malaysia by way of a simple designation.

Registration of Non-traditional Trademarks

The TMA 2019 has expanded its scope of non-traditional trademarks to include 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, on the condition that the mark is “capable of being represented graphically” and meets the test of registrability where the mark is capable of distinguishing the proprietor’s goods or services from those of others.

In addition, collective marks are now registrable under the TMA 2019, which basically allows an association to register its mark as a collective mark for the protection of members of the association. 

Benefits of Using the Madrid System

The Madrid System provides a simplified filing process, a convenient and significantly cost-effective solution and reduced bureaucracy for registration and management of trademark protection across multiple territories for members. The Madrid System also enables foreign companies and foreign trademark owners of active/existing international trademarks to manage post-registration or subsequent designation of other countries in the future (for instance modify, renewal, assignment or licence recordal) through one centralised system without having to appoint local representatives in each designated country.

However, the levels of protection can vary and the process is not without its shortfalls. A trademark must first be filed or registered in its own home country of citizenship or incorporation which is a member and the trademark will be considered as a “basic mark,” failure of which will subject the filing to cancellation. The basic mark and international trademark registration must be identical, have the same holder, and the goods and services designated by the international trademark must be the same or be comprised within the description of the basic trademark(s). However, if the basic trademark is limited, denied, expired or cancelled, these actions will also affect other international trademark designations, possibly being limited or no longer valid.

Disadvantages of International Registration

Despite the many benefits from the administrative efficiencies of the Madrid Protocol, the international registration system should not be treated as a “one-size-fits-all” solution. The caveat on the limitation of the Madrid Protocol is the inability to transfer trademark ownership to another owner who is not a resident in a member country without first withdrawing it from the Madrid System. A trademark (like any moveable property) can be assigned to another which must be done in writing and signed by all parties.

The main downside of the Madrid Protocol would be the threat of a possible “central attack.” International application depends on home filing for a period of five years from the date of the registration. Accordingly, if the home filing is abandoned or cancelled during the dependency period, the international registration will be automatically cancelled. If a third party initiates a proceeding or notice of opposition which has been duly filed or failed to observe the application for extension of time, invalidation or revocation via the Malaysian trademark office or the courts against the registration of the international trademark may trigger subsequent registrations in the other member states to collapse, in whole or in part of the national mark on which the international registration is based.

Length of the Application Process

Prior to the application via the Madrid System, it is advisable to conduct a registration feasibility study in the jurisdictions of interest, on whether it infringes absolute prohibitions or against other enforceable earlier rights that could hinder or prevent the registration of the trademark so as to prevent the possibility of a central attack. If there is an attack on the basic application, the designated countries on the international application would also be similarly affected.

During the process of the application, there is a fixed examination period within 12 months for the Registrar to raise any objection or to revoke the trademark application, after having taken into account any relevant obligations of Malaysia under an international agreement or convention or any special circumstances. In the absence of such objection, the application will obtain automatic protection and the registration will be deemed valid and conclusive for 5 years after registration (instead of 7 years under the old Act).

Recognition of Unregistered Trademarks

In Malaysia, registration of a trademark is not mandatory to establish rights or use in a mark, and to a certain extent, both registered and unregistered trademarks do enjoy some protection under TMA 2019. Section 24(4) provides that unregistered trademarks or signs used in the course of trade are protected under common law rights in the form of the tort of “passing-off”. To succeed in legal action against passing-off, the plaintiff must establish elements, namely, the defendant has committed a misrepresentation leading or likely to lead the public to believe that his goods or services are those of the plaintiff and that his business reputation or goodwill has suffered damages. Undoubtedly, it is advisable to have a trademark registered for its distinct advantages with the presumption of a full and exclusive bundle of rights over the trademark in the first instance.

Factors where Trademark Registration may be Challenged

Trademark registration should fulfil all the necessary requirements under the TMA 2019 and should not fall foul of the grounds of refusal under absolute and relative grounds. Registrations of trademarks can be challenged in various ways under TMA 2019:

1. by revocation by the Registrar within 12 to 18 months of the date of registration on the basis that it was a wrongful grant; or
2. removed by Court (application initiated by an aggrieved person); or
3. under certain prescribed circumstances; or
4. 3 years’ non-use from the date of issuance of the notification of registration or suspended use for a continuous 3 years’ period without proper reasons.

Grounds for Refusal of Registration

Revocation of registration by the Registrar of Trademark can also be made based on fraud or misrepresentation in the procurement of the registration on the basis of absolute grounds according to section 23 of the TMA 2019 which provides, among others, the following:

(i)  Prohibited marks

1. Any trademarks devoid of any distinctive character and that will likely deceive or cause confusion, commonly used word(s) which confuse or deceive the public or is/are contrary to the public interest or to the morality of any written law, a trademark that misleads the public in terms of nature, quality or geographical origin of the goods or services including those which contain or consist of any scandalous or offensive matter;
2. Where some specific marks protected by statutes such as marks consisting of a flag of a country, national emblem or royal arms otherwise authorised by prescribed authorities or international intergovernmental organisations;
3. Trademarks consisting of an international non-proprietary name as declared by the World Health Organisation.

(ii)  Prejudice to the Interest or Security of the Nation

1. The Registrar bears the responsibility of determining whether the trademark might be prejudicial to the interest or security of the country;
2. A mark may contain an inflammatory statement or word.

Undoubtedly, revocation applies to any element of fraud or misrepresentation in the procurement of the registration. Furthermore, section 24 of the TMA 2019 sets out a list of relative grounds for refusal which hinges on examination of earlier marks including well-known marks and that the Registrar will also recognise consent given by the owner of an earlier conflicting mark on the basis of public interest and the likelihood of confusion.

Enforcement Rights of a Trademark Owner

While criminal enforcement can be effective, however civil litigation often provides a wider choice of remedies available for any intellectual property infringement. In fact, civil remedies may possibly be the only recourse under the common law tort of “passing-off” that an action be brought against infringers who misrepresented the goods as being similar to or being produced by the owner of the unregistered trademark in order to take advantage of the latter’s established goodwill and reputation. Most enforcement of trademarks rights is usually initiated in the intellectual property specialised High Court in Kuala Lumpur. A registered trademark gives the owner privileges such as:

1. Exclusive rights – Trademarks owners have the exclusive right to the use of the mark in relation to the goods or services for which the mark is registered. They can take legal action for infringement under the trademark law against others for violation or misuse of their marks without consent provided that the conditions stipulated under the TMA 2019 are met.
2. Legal evidence – A registration certificate issued by the Registrar Office is a prima facie evidence of trademark ownership which serves as an important document to establish ownership of goods exported to other countries.
3. Acts amounting to infringement – Trademark infringement under the TMA 2019 expands the scope of potential infringers to include secondary users and holds that trademark infringement can be established even in cases where the goods and/or services are similar (as opposed to identical) and that such similarity will give rise to a likelihood of confusion.
4. Remedies – In the event there is a complaint made by a person, the Assistant Controller may conduct an investigation on any person who may have committed any offence under section 112(1) of TMA 2019, in relation to a trademark which is not identical to the registered trademark. The registered proprietor or licensee may obtain the Registrar’s verification by virtue of section 112(3) of TMA 2019 and admit as prima facie evidence in any proceedings according to section 112 (4) of TMA 2019. The typical remedies requested and granted are permanent injunctions to prohibit further infringement, full discovery, deliver- up, declarations, general and punitive damages and costs.

Establishing Infringement under TMA 2019

Under the old Act, infringement action required that the infringing mark was identical and/or confusingly similar to the registered mark and that the alleged infringement applied to goods or services covered in the subject registration.

Notably, the scope of infringement, invalidation and revocation and its exemptions have been substantially expanded under the new TMA 2019. Multiple avenues of enforcement exist, both criminal and civil but the new criminal offences under the new TMA 2019 made it easy for enforcement officers to go against potential infringers, including any person who creates or is in possession, custody or control of an article or machine that copies a registered trademark or a sign likely to be mistaken for that trademark. Similarly, lodging a complaint with enforcement officers of the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) has vast powers to arrest persons, search and seize infringing properties such as counterfeit goods or copyrighted materials, with the eventual aim of bringing criminal proceedings against the infringer.

The TMA 2019 also expands to include any documents in any medium, which arguably includes physical and digital, and such protection covers other media such as the online sphere. Further, the offences also include counterfeiting of trademarks, which essentially simplifies the procedural and formality aspects for owners to enforce their rights. Moreover, the TMA 2019 made it a lot easier to hold the alleged infringer liable for attempting to deceive consumers.

Duration and Renewal of Registered Trademarks

Duration and renewal of registration shall be for a period of 10 years from the date of registration. Upon the payment of a fee and determined by the Registrar, the registration may be renewed for further periods of 10 years and in perpetuity, under section 39(1) of TMA 2019. Trademark owners can manage their brand portfolio through a centralised system and easily expand protection into new markets.

A request for renewal shall be made within six months after the date of expiry of the registration, otherwise the trademark shall be deemed removed. Request for restoration of the removed registration must be made within six months from the date of removal together with the fee prescribed, otherwise the registration shall cease. Renewal or restoration of trademark registration will be published in the Intellectual Property Official Journal.

Symbols to Denote Trademarks

Trademark owners may use the symbol “R” to denote that their trademark is deemed registered or any word or symbol importing a reference expressly or impliedly to registration. Using the symbol without valid registration or having reason to believe that the representation is falsely committed, on conviction, shall be liable to a fine not exceeding MYR10,000 according to section 104 and section 106 of the TMA 2019.

Conclusion

All in all, the long-awaited TMA 2019 undoubtedly brought the Malaysia trademark registration regime to be consistent and in line with the international protection and enforcement of trademark rights for owners around the globe.

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