8 June, 2018
In today’s blog post we are taking a closer look at IP protection in the medical device and healthcare industries in Malaysia. You will learn more about the importance of patents in medical device industry and the various patents that can be applied in Malaysia as well as about the importance of brand protection.
As one of the main pillars of Malaysia’s economy, supported by numerous governmental initiatives, medical device and healthcare industry is growing fast in Malaysia, making the country one of the top destinations for medical tourism. Healthcare industry in Malaysia is expected to grow close to 30% per year up to 2020[1] and as Malaysian government is creating various incentives for foreign investments, this sector is expected to offer many promising business opportunities for European SMEs.
Malaysia has a large ageing population with rising disposable income and European SMEs can find business opportunities in many sectors including elderly care. As digitalization is still one of the challenges in Malaysia’s medical device and healthcare sector and since the government is encouraging the implementation of the E-Health Strategy, European high-tech solutions are much welcome in Malaysia. Furthermore, as Malaysia’s population is becoming increasingly affluent, consumers pay a lot of attention to wellness and disease preventions, meaning that there is growing market for medical devices that are used to self-monitor one’s health condition like blood glucose and pressure monitors[2].
European SMEs wishing to do business in Malaysia’s healthcare and medical device sector should pay attention to protecting their intellectual property rights, because even though Malaysia’s IP regulations have improved over the past years, counterfeiting and other IP violations are still commonplace in the country. At the same time, neglecting to protect IP rights can often quickly end European SMEs’ business endeavors in South-East Asia.
Use Patents to protect your Inventions
Medical device companies are driven by innovation and inventions that involve significant research and development costs. Therefore, to protect themselves against market failures and to prevent others from selling duplicate products, registration of patents rights is vital to these companies.
For an invention to be patentable in Malaysia, the invention must meet all three requirements: novelty; having an inventive step; and industrial applicability. By registering a patent for the innovative aspect of the product, the medical device company will be able to:
- create legal barriers to entry for competing medical devices by preventing others from copying, selling, or manufacturing the patented product
- license the patented invention to generate revenue
- enhance the value of the company by building equity in the company and creating assets that may attract other investments
It is wort mentioning that in Malaysia, there is also a utility innovation option. Utility innovations require less substantial examination because the degree of innovation required is lesser. In other words, utility innovations can be registered as type of simpler patent or for any incremental improvement of a known product or process. Utility innovation options are increasingly used in Malaysia by companies that develop medical devices, which have minor improvements or adaptations to existing products and are low in inventive step.
Utility Innovations are generally easier to obtain, and they can be granted faster than standard invention patents. Standard patent protection lasts for 20 years from the date of filing, while the duration of a utility innovation certificate is initially 10 years from the date of filing, but this term is extendable for another 2 consecutive 5-year terms by filing a formal request for extension, thus making a total of cumulative 20 years of enforcement. EU SMEs should thus consider utility inventions as a viable means of protection for their inventions.
Protect your design with registered designs
European SMEs producing medical devices should also include industrial design registration as part of their overall IP strategy. Industrial designs are used to protect the aesthetic aspects of products, but not their functionalities. Registered designs are increasingly used in the medical device industry to protect the appearance of products, like blood sampling devices, diagnostic devices, implant delivery tools and respiratory masks.
Registering the design of a device can be used to stop competitors making or selling similar looking products. The relatively quick registration rate of industrial designs allows the rights owner to prevent sale of imitations by counterfeiters when the corresponding patent application is still pending and cannot be enforced.
Industrial design registrations in Malaysia are given an initial protection period of 5 years from the date of filing and are extendable for a further 4 consecutive terms of 5 years each. The maximum protection period is 25 years.
Registered Industrial Designs also need to meet the novelty requirement, which means that they cannot be disclosed to the public in Malaysia or elsewhere before filing for registration. Both individuals or corporate entities can register industrial designs and it is not a requirement that a designer must be a Malaysian citizen or a Malaysian corporation, however, when the applicant’s ordinary residence or principal place of business is outside the country, it shall appoint a local qualified agent within the Register of Industrial Designs Agents of Malaysia.
Don’t forget to protect your brand
Brands can often promise quality and reliability, features that are especially valued in the medical device and healthcare industry where products and services directly affect the well-being of the users of these brands. Branding is thus essential in the medical device and healthcare industry. An important part of branding involves brand protection, as it could be devastating for the reputation of an European medical device or healthcare company if someone offered substandard products or services under the same or similar brand name.
SMEs are strongly advised to register their trade mark in Malaysia to protect their brand because IP rights are territorial and European trade marks are not automatically protected in Malaysia. Since Malaysia is party to the Paris Convention, EU SMEs can make a ‘priority claim’ for registration for trade marks, provided that the applicant will within 6 months apply to claim priority.
Furthermore, Malaysia adopts the ‘first-to-file’ system, meaning that the first person to register a trade mark owns that mark. It is particularly important for SMEs to register their trade marks in Malaysia in advance and as soon as possible, because bad faith registrations are still a serious concern in the country. ‘Bad faith registration’ means that a third party would register in Malaysia an identical or very similar mark usually belonging to others in different countries, thereby preventing the legitimate owner from registering it in the country and obtaining protection. These unscrupulous companies or individuals normally try to then resell the trade mark to its owner at an inflated price.
Trade marks are registered at the Trade Mark Division of the Intellectual Property Corporation of Malaysia (MYIPO), filings fees are approximately EUR 233 (administrative fees excluding agent fees), a small amount to pay compared to the costs incurred in case of an infringement or ‘bad faith’ registration.
Use copyright to protect instruction manuals and the source code
European SMEs should also bear in mind that instructions manuals of medical equipment and advertising materials can be protectable by copyright in Malaysia and can be used to enhance brand value. Furthermore, copyright can also be used to protect the source code of computer programs, which can be important for the smart diagnostic equipment producers. However, it should be noted that neither the functionality of a computer program, nor the programming language can be protected under copyright.
Although, copyright protection arises automatically in Malaysia, formal recordation of copyright at the Intellectual Property Corporation of Malaysia is recommended for EU SMEs, as it is useful as evidence of ownership in enforcement proceedings should infringements happen. In some cases, Malaysian authorities may not start legal proceedings without the copyright recordation certificate in cases where ownership is at dispute.
The typical official fees for a voluntary copyright notification in Malaysia start from RM 155 (approximately EUR 35), excluding fees of legal service providers. It is also important to note that notification of copyright can only be made by a citizen or a permanent resident of Malaysia, regardless of whether the notification is done by the author/owner or a representative. European SMEs can thus voluntarily register their copyright in Malaysia with the help of a Malaysian representative.
[1] Global Risk Insights, 2017, available at: https://globalriskinsights.com/2017/04/malaysia-healthcare-sector/
[2] US Department of Commerce, 2017, available at: https://www.export.gov/article?id=Malaysia-Medical-Devices
Helika Jurgenson, China IPR SME-Helpdesk
