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    Malaysia and Indonesia – trademarks update


    Counterfeiting is a global menace polluting worldwide markets with tainted stock, which in turn creates false impressions of economic security. Counterfeiting is also a local nuisance, which can set the scene for other illegitimate activities, such as money laundering and human trafficking.

    Malaysia’s legal trademark infrastructure has been aggressively enhanced through legal reform and government enforcement initiatives in an effort to quash the perception that Malaysia is a hotbed for counterfeiting.

    Legal framework

    In Malaysia, both registered and unregistered trademarks are protected under the Trademark Act 1976. Owners of registered trademarks can bring both infringement and passing off actions against counterfeiters in the civil courts.

    Owners of unregistered marks can avail of a cause of action under the tortious wrong of passing off against the wrongdoer. Various enactments and laws may be invoked against counterfeiters. These include:

    • the Trademark Act 1976, which provides a framework for the protection and enforcement of trademarks through civil redress;
    • the Trade Description Act 1972, which governs the quasi-criminal nature of state prosecution that may be initiated by the trademark owner. Both this and the Trademark Act are used by the enforcement division of the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) to detect, deter and detain counterfeiters;
    • the Copyright Act 1987, which provides remedies to wronged trademark owners where the mark also comprises copyright interests;
    • the Trade Descriptions (Original Label) Order 2001, which came into force on January 15 2003 as yet another attempt to address ever-increasing levels of piracy and counterfeiting in the film, music, games, software and audio recording industries. Under the order, all optical disc products are required to carry an original label, usually a hologram, granted by the MDTCC. The holograms must be conspicuously affixed inside the shrink wrap of all copies of works distributed in Malaysia (whether manufactured locally or abroad); and
    • the Price Control (Labelling by Manufacturers, Importers, Producers or Wholesalers) Order 1980, which makes it an offence to sell a product that does not carry the name and address of the manufacturer, importer, producer, wholesaler and, in the case of imported items, country of origin. The information displayed on counterfeit products is rarely accurate; counterfeiters often use fictitious names and addresses. If these details are incorrect, inadequate or incomplete, the products may be seized by the MDTCC, which is empowered to enforce such provisions.

    The long-anticipated overhaul of Indonesia’s IP legislation came back on track earlier this year when the government issued a draft Trademark Bill. It is expected to issue draftcopyright, designs and patent bills in early 2010.

    Indonesia already has a comprehensive legal IP framework which, in spite of a number of flaws, functions well. The following IP legislation applies:

    • the Trademark Law 2001;
    • the Designs Law 2000;
    • the Copyright Law 2002;
    • the Patents Law 2001;
    • the Integrated Circuit Layout Design Law 2000;
    • the Plant Variety Protection Law 2000; and
    • the Trade Secrets Law 2000.
    Government review of IP legislation

    The four main IP laws – the Trademark Law, Designs Law, Copyright Law and Patents Law – are all under review at present. This review began in 2007 but was stalled by the elections that took place in the first half of 2009.

    The government has completed the first round of consultation for the Trademark Law and issued a draft bill. Consultation on the remaining laws will continue in the first quarter of 2010, before all four bills are submitted to the House of Representatives for debate.

    It is expected that the new legislation will become law in the second half of 2010.

    Trademark Bill

    The draft Trademark Bill makes no significant changes to the existing Indonesian trademark law. The majority of amendments fall into two categories. The first is the codification of existing practices. For example, the draft bill specifies that the statutory limitation of five years that applies to cancellation proceedings would not apply if the grounds for cancellation were bad faith. This exception was formerly contained in the Trademark Law’s elucidation and therefore was not binding.

    The second is acceleration of processes. Most significantly, trademark applications would be published for opposition purposes before examination by the Trademark Office, which would reduce the examination process by approximately 12 months. In addition, under the bill the Commercial Court would have only 60 working days in which to issue a decision, instead of the current 90.

    The bill sets outs a number of other improvements, including the following:

    • All penalties for trademark infringement would be increased and the police would be able to detain trademark infringers for up to 60 days before trial in order to complete their investigation. In addition, the bill would provide trademark owners with what would effectively be a preliminary injunction. The only exception would be for infringement of geographical indications, where infringers could not be detained before trial.
    • The bill would provide for filing using the Madrid Protocol system. However, significant improvements would need to be made to the Trademark Office registration process, particularly the timeframes, before this could be implemented. This will be the subject of further government regulation.
    • Similarity with a prior application would be added as an absolute ground for rejection of a trademark application. Under the current law, the Trademark Office must wait until the prior applied mark has been registered before rejecting a subsequently filed trademark application.
    • The bill transforms a number of Trademark Office practices into statutory obligations.
    The draft bill does not address some of the more significant deficiencies in the Trademark Law, most notably the absence of any prohibition against the use of wellknown marks. Under the Trademark Law, a well-known mark can be enforced in Indonesia only if it is also registered.

    “WTR Weekly Trademark Update” 09.09.2010