By P. Kandiah
If one were to walk along the well-known streets of Kuala Lumpur often traversed by tourists, or patronize certain popular shopping complexes in the city, odds are one will find counterfeit merchandise such as watches, music CDs, digital video discs and T-shirts for sale. This brazen public display of knock-off products would give the common man the impression that Malaysia does not have a strong regime to protect intellectual property (IP). But is that the reality?
Malaysia has put in place a comprehensive set of IP laws, regulations and practices in compliance with its obligations under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. The 2015 International IP Index Fact Sheet published by the Global Intellectual Property Centre (GIPC) of the US Chamber of Commerce gave an overall score of 14.62 points for Malaysia. In contrast, a developed country like Canada received a score of 17.82 (This index takes into account indicators such as patent rights, copyrights, trademarks and their limitations, trade secrets and market access, enforcement, and ratification of international treaties).
Foreign owners of IP rights in Malaysia may be reluctant to take legal action against the offending traders for a variety of reasons, amongst them being;
- The loss in sales value attributed to the counterfeit goods is insignificant compared to the total volume of sales of their genuine products in Malaysia,
- It takes a lot of effort and time to initiate civil or criminal proceedings against the offenders,
- It is better to go after the manufacturers or importers rather than the retail street vendors.
Even if there are successful civil proceedings against infringers, the damage awarded to the IP rights owner is not a strong deterrent to the infringer. Malaysia adopts the UK common law system where all courts only award the actual losses suffered and proven by the plaintiff; except in a few situations, no exemplary damages are awarded by the courts.
In addition, upon successful prosecution, the fines imposed are not a sufficiently strong deterrent against the offenders. Custodial sentences are usually given for repeat offenders and not first time offenders. This may be the reason why Malaysia was given a score of 2.34 out of a total possible score of 6 in terms of enforcement in the 2015 GIPC International IP Index, where it was noted that despite increased enforcement against piracy in 2014, there were “still high levels of counterfeiting, software and music piracy” in the country.
Thus in Malaysia, the application and securing of IP Rights is fairly easy and affordable. It is the deterrent nature of the IP legislation that is weak, and therefore aggressive traders are willing to take the risk of trading in infringing goods. Perhaps when the government reviews the IP legislation, it should consider increasing the damages and penalties for the dealers in infringing goods under its civil and criminal legislation respectively.
While the government uses its resources (read: taxpayer’s money) to take action against those involved in the business of dealing with infringement and counterfeit products, one must note that IP rights are essentially private property rights. Therefore it is the owner’s duty and in his interests to eliminate the trade in the offending products infringing upon his IP rights.
The government has provided an affordable system and procedure to enable IP rights owners to enforce their rights. Unless the owner of the IP rights avails himself to the opportunity provided, he cannot complain that the government is not firm in enforcing IP rights.
The owner of the IP rights whose products are infringed or counterfeited has to take the initiative to identify the source of the offending products, which could be a local manufacturer or an importer, and the locations where the offending products are manufactured or warehoused or sold. He can then lodge an official complaint at the enforcement division of the Ministry of Domestic Trade, Co-operatives and Consumerism and provide all the relevant information obtained from his investigation.
Thereafter, the enforcement officials will initiate the necessary action to raid the premises of the offender, and, upon the completion of the investigations, file criminal charges in court against the offender. The owner of the IP rights has to provide the necessary cooperation to the prosecution team such as arranging for independent laboratory analyses where necessary and providing expert witnesses to establish counterfeiting during the trial to secure conviction and sentencing.
However, the IP rights owner must realize that once the case is in court, the prosecution has to prove its case beyond reasonable doubt just like any other criminal trial. Any benefit of doubt in the case will be given to the accused.
With the establishment of specialized IP courts in the country, IP rights owners can expect speedy trials and prosecutions against offenders of IP rights. It is hoped that, as the IP courts get more seasoned with time and our country continues to intensify its IP awareness and enforcement efforts, we will see a marked improvement in Malaysia’s overall score in the GIPC International IP Index in the near future.
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