MALAYSIA: An Introduction to Intellectual Property

The recent 15th General Election in Malaysia held in November 2021 has seen our Prime Minister, Anwar Ibrahim lead a “unity government” right at a time when the country was manoeuvring forward from the challenges of a global pandemic and various other worldwide economic, social and geopolitical woes. Transformative policies are being introduced with the aim of pushing Malaysia towards becoming a high-income nation. High on the government’s agenda is the Twelfth Malaysia Plan (2021–2025) (12MP) with structured policies aimed at achieving more sustainable economic growth. At the forefront is the push for greater innovation, more reliance on knowledge-based products and services, and the need for a strong intellectual property (IP) protection and enforcement framework.

Two years on since the introduction of 12MP, the government, through the Malaysian Budget 2024, allocated MYR510 million (approximately USD110 million) for research and development (R&D) funds which fall under the auspices of the Ministry of Science, Technology and Innovation (MoSTI) and the Ministry of Higher Education. Riding on this wave, there are plans to invest in technologies including big data and predictive analysis, cloud computing, artificial intelligence and blockchain in the healthcare and oil and gas sectors.

MyDIGITAL, an initiative introduced to complement the 12MP, estimates that the utilisation of generative artificial intelligence (AI) in the workforce could potentially unlock an amount as much as USD113.4 billion of the national Gross Domestic Product. Notwithstanding the economic benefits, there remains a lack of clarity surrounding the issues of ownership and infringement in relation to AI generative works. As it stands, the law requires a natural person to be the author of a copyrightable work. That said, individuals and companies alike ought to be wary of the real possibility of infringing a third-party’s intellectual property rights when relying on or using AI generative works, particularly in the course of business.

In the spirit of digital transformation, the Malaysia Digital Economy Corporation (MDEC), the country’s leading government agency for advancing the digital economy, has undertaken collaborative efforts to accelerate the country’s digital transformation journey, including initiatives to shape the country’s presence in the metaverse sector. For example, MDEC recently announced its collaboration with Acxyn, a web3 company, whereby the latter was awarded a grant of MYR750,000 (approximately USD160,000) to set up game monetisation and intellectual property tokenisation platforms.

In incentivising the commercialisation of intellectual property, the Ministry of Domestic Trade and Cost of Living (MDTCL) has launched the Intellectual Property Filing Fund 2.0 with the purpose of benefiting 2,000 micro, small and medium entrepreneurs. The initiative assists with covering the cost of filing of trade marks, copyrights and industrial designs through its fund of MYR2 million (approximately USD435,000), thereby encouraging small and medium-sized entrepreneurs to capitalise on the results of their own innovations.

Malaysia’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since 29 November 2022 is expected to eliminate a substantial amount of tariffs amongst participating countries and provide more access to new markets within the territories of the contracting parties. The substantive provisions in the IP chapter impose minimum binding obligations in the protection of trade marks, patents, copyright, trade secrets and industrial designs through international agreements and regulatory reforms that aim to harmonise international and domestic standards. These measures will not only bolster the nation’s legal framework but also create a more conducive environment for domestic innovation and international collaboration.

These past few years have also seen significant amendments being made to further align protection of IP rights. The Trademarks Act 2019 was introduced to finally recognise non-conventional trade marks and to also streamline, amongst others, the requirements of filing for a trade mark consisting of a geographical indication under the Geographical Indications Act 2022. The adoption of the Madrid Protocol filing system under the Trademarks Act 2019 has also resulted in more brand owners exploring trade mark protection outside Malaysia and, on the reverse, has seen an increase in the number of foreign owners exploring registration rights in Malaysia. The Trade Descriptions Act 2011 has also been amended to extend its scope to encompass statements or expressions with the effect of discriminating or boycotting any product or goods.

The Copyright Act 1987 was amended to introduce new provisions for the purpose of combating streaming technologies by making the manufacturing, importing, selling or letting for hire, offering, exposing or advertising for sale or hire, possessing or distributing a streaming technology an offence. In tandem with this, the MDTCL has partnered with the Malaysian Communications and Multimedia Commission (MCMC) to take down websites linked to illegal streaming, which will further curb the infringement of copyright by streaming. Additionally, the Enforcement Division of the MDTCL has risen to the occasion by conducting more regular criminal raids on infringing works including unlicensed software. The prevalence of online infringement activities still presents a problem to IP owners, where more seamless interaction between the authorities, internet service providers and the IP owners to take down infringing content is desired.

Provisions under the Patents Act 1983 were amended in March 2022 to bring the legislation in line with Malaysia’s obligations under the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure. Malaysia now accepts and recognises the deposit of a sample micro-organism with a National or an International Depositary Authority as being sufficient for the patenting process, providing convenience to prospective applicants. Other notable amendments include the allowance for third-party observation and opposition as well as the extension of the limitation period for the commencement of an action for infringement from five to six years. The Registrar is also now empowered to grant compulsory licences upon the application of any party notwithstanding any exclusive licence between the patent proprietor and any other party. Further, deferment of examination is now only available for modified substantive examination on the ground that the patent has not yet been granted. As with trade marks and industrial designs, patents can now be leveraged as moveable property and security interests.

In conforming the scope of protection of industrial design laws with that of other countries, the Intellectual Property Corporation of Malaysia (MyIPO) is engaging with rights-holders and representatives through public consultation on account of proposed new provisions and amendments to the existing Industrial Designs Act 1996. The paper proposes extending the scope of industrial designs to include interior design, exterior design, non-physical products and complex products in line with international practice, revising the criteria for the registrability of designs, the introduction of substantive examination, accession to the Hague Agreement Concerning the International Deposit of Industrial Designs, deferment of publication, the introduction of Guidelines to assist in the procedures of filing and registration, and the requirement to appoint an agent on record.

With all these changes in place, 2024 no doubt heralds an important year to observe the fruits of the above-mentioned initiatives. These outcomes will place a more definitive marker on whether the 12MP aspirations may be realised by the target year, 2025.