Malaysia – The New Trademarks Act 2019 And Broader Enforcement Rights For Brand Owners.

In this article, Raghuram Supramanium examines the provisions on trademark enforcement in the new Trademarks Act 2019.

 

Introduction

 

The much-awaited new Trademarks Act 2019 (the “new Act”) came into effect on 27 December 2019, repealing the previous Trade Marks Act 1976 (“TMA 1976”). For many international brand owners looking towards Malaysia, this change in the trademarks landscape will most certainly make a difference in their decision making for the new Act has introduced many significant changes that could benefit all brand owners.

 

The TMA 1976, amongst others, did not contain provision for criminal enforcement or penalties against counterfeits and infringement. Such recourse was only available under the Trade Descriptions Act 2011 (“TDA 2011”).

 

All provisions on trademark enforcement have been moved from the TDA 2011 to the TMA 2019. The new Act sets out a consolidated approach to comprehensively provide for civil and criminal enforcement, offences and penalties within the same piece of legislation.

 

The Ministry of Domestic Trade and Consumer Affairs will continue to have enforcement powers over trademark-related offences prescribed in the TMA 2019, as it previously did under the TDA 2011.

 

Trademarks Act 2019

 

In essence, the provisions of the new Act are broad in nature and provide new sanctions or tools to empower brand owners. Each provision now deals with multiple offences; thereby different offences of similar nature may have the same threshold.

 

For instance, where there were two separate provisions to deal with offences involving identical and non-identical marks in the TDA 2011, now both offences are being dealt with under one unified provision, with the same threshold to establish infringement of identical and non-identical trademarks.

 

Another most notable and significant change made to the enforcement provisions is the abolition of the Trade Description Orders for enforcement actions against offenders counterfeiting with non-identical trademarks.

 

Previously, under the TDA 2011, for non-identical trademarks, the complainant would be required to file an ex-parte application to the Court to obtain a Trade Description Order, and the burden of proving the similarities between the registered and offending marks rested with the complainant. This was a quasi-criminal relief whereby registered owners of registered trademarks could seek to immediately protect their registered trademark from further infringement by getting the Court to declare the infringing mark as a false trade description. Its purpose was for the speedy prevention of further and continuing damage that may be caused by the presence of the product carrying the false trade description being in the market.

 

With the new Act doing away with the need for a Trade Description Order, it will be easier for brand owners to now commence criminal enforcement actions against acts of passing-off without having to go through the hassle of applying to the Court for a Trade Description Order.

 

Where similar marks are concerned, in place of the Trade Description Order, the TMA 2019 provides that the Trademarks Registrar’s verification must be first obtained. The Registrar’s verification that the counterfeit mark is confusingly similar to the registered trademark will be accepted as prima facie evidence in any legal proceedings.

 

Over and above unifying the different offences, another significant change introduced by the new Act are the new penalties. Previously under the TDA 2011, there was a maximum cap of RM15,000 (for each good) for body corporate offenders and RM10,000 (for each good) or three-years imprisonment for individual offenders. In the new Act, the fine for the offences have been increased to RM1 million.

 

The enforcement provisions in the TMA 2019 now also extend to cover “alteration, addition, effacement, partial removal” of registered trademarks. This will make it easier for brand owners to commence actions against offenders who previously would deliberately attempt to change offending marks to easily circumvent the provisions of the TDA 2011.

 

Other additions to the TMA 2019 include the offence of falsely applying a registered trademark to goods or services. The predecessor provision under the TDA 2011 did not specifically cover trademarks but pertained to trade descriptions in general. Now, these provisions have been revamped and incorporated into the new Act to specifically cover trademarks and provides for a broader scope of protection against trademarks and any sign that may be taken as a trademark.

 

Under section 2 of the TMA 2019, a “sign” includes 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. From the wording of the new provision, this appears to be an additional cause of action brand owners can consider including in their criminal actions against counterfeiters, as it refers to non-genuine goods.

 

The above provision deals with the false application of a registered trademark on physical goods, advertisements and business documents relating to the goods and services.

 

This means affixing of a trademark without consent or operating a business, offering services or delivering goods (even for goods or services not registered by the original brand owner) with the offending trademark are now offences under the new Act. This would be a very powerful tool for brand owners in their fight against stores and e-commerce sellers passing-off as their authorised retailers, resellers or distributors.

 

Another notable addition to the New Act is the provision that covers the act of making or possessing of an article for committing an offence. Such a provision did not exist under the TDA 2011, and brand owners were unable to act against offenders for use of offending contrivances, equipment and tools that are used to commit trademark infringement.

 

They are now able to do so under the TMA 2019.

 

Conclusion

 

Unquestionably, the new Act is a major step in the development of the Malaysian trademarks landscape. Brand owners in Malaysia can now more easily enforce their rights.