JURISDICTION REPORT: MALAYSIA
NEW TRADE DESCRIPTIONS ACT 2011
Kherk Ying Chew and Esther Low Wong & Partners
Te Trade Descriptions Act 2011 (TDA 2011) was passed by the Malaysian parliament and published on August 18, 2011. It is presently anticipated to come into force in January 2012 and repeals the old Trade Descriptions Act 1972 (TDA 1972). Te TDA 2011, like its predecessor, aims to promote good trade practices in the market. However, the TDA 2011 is now much wider in scope—some key amendments are highlighted below.
Trade Descriptions Order Te TDA 1972 offered a unique intellectual property enforcement tool, known as the Trade Descriptions Order (TDO), which entitles trademark owners (registered and/or common law proprietors) to apply for a declaratory court order from the Malaysian High Court declaring a particular infringing trademark or get-up used by an infringer as amounting to a false trade description. Te TDO empowered the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) to take criminal action against the infringer upon lodgement of an official complaint and the TDO by the trademark owner. Te TDO is commonly used in Malaysia as a powerful quasi-criminal instrument to prompt enforcement actions by the MDTCC.
Two amendments in the TDA 2011 will dilute the usefulness of the TDO: (i) only registered proprietors of trademarks in Malaysia will be able to apply for a TDO; and (ii) the validity of a TDO has now been reduced from five years to one year. In effect, trademark owners who have not registered their marks in Malaysia but have prior goodwill and reputation will not be able to enforce their common law rights through a TDO. Tese trademark owners will still be able to bring a civil action for passing off against infringers but civil proceedings are more costly and protracted as opposed to criminal enforcement by the MDTCC. Trademark owners must, therefore, ensure that their marks are registered in Malaysia.
Further, the reduced validity of a TDO may not afford sufficient time to plan and execute enforcement actions effectively. Note, however, that the TDA 2011 permits the court to renew the validity of a TDO upon its expiry for a further period as may be determined by the court. Yet, this would entail the incurrence of time and cost on the part of the trademark owner.
False or misleading statements Te TDA 2011 introduces provisions as to the use of false and misleading statements in advertisements and contests. Te following are now offences under the TDA 2011:
• Making any false or misleading statement in any advertisement in relation to goods/services.
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“THE TDA 2011 INTRODUCES PROVISIONS AS TO THE USE OF FALSE AND MISLEADING STATEMENTS IN ADVERTISEMENTS AND CONTESTS.”
• Making any false or misleading statement (i) that the goods/services offered by him are able to facilitate winning in any contest, or (ii) that any person has already won, will win, or will, by doing a particular act, win a prize or other equivalent benefit where in fact there is no prize or equivalent benefit or where the same is not offered or provided or is subject to the person paying money, incurring cost or other unreasonable condition.
Te penalties for these offences for bodies corporate have been increased from the general penalties under the TDA 1972: RM500,000 ($167,000) (previously RM250,000) for the first offence and RM1,000,000 ($333,000) (previously RM500,000) for the second and subsequent offences.
Certifications Te TDA 2011 has extended the powers of the minister to assign any expressions or descriptions used in relation to goods/services or in the course of trade to have definite meanings. Specifically, the minister is empowered to appoint specific regulatory bodies as the exclusive awarding body of a particular expression or description. It is believed that this was introduced to facilitate the government’s efforts to standardise and regulate the certification of Halal products in Malaysia.
Te coming into force of the TDA 2011 will bring about significant changes to the means by which trademarks are enforced in Malaysia, plus a more cautious approach to statements made in advertisements and in relation to contests. More stringent regulation of Halal certifications is also expected. Te MDTCC has expressed that it will be actively enforcing the TDA 2011.
Kherk Ying Chew is the managing partner at Wong & Partners. She can be contacted at:
kherk.ying.chew@
wongpartners.com
Esther Low is an associate at Wong & Partners. She can be contacted at:
esther.low@wongpartners.com
World Intellectual Property Review November/December 2011 77
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