Chew Kherk Ying and Sonia Ong, Wong & Partners
The Trade Descriptions Act 2011 (TDA 2011) was recently passed by the Malaysian Parliament, published in the Gazette on August 18 2011 and came into force on November 1 2011. The new Act repeals the old Trade Descriptions Act 1972 (TDA 1972).
The TDA 2011, like its predecessor, aims to promote good trade practices in the market. In particular, the TDA 1972 offered a unique IP enforcement tool, known as the Trade Descriptions Order (TDO), which entitled trade mark owners – registered and/or common law owners – to apply for a declaratory court order from the Malaysian High Court declaring a particular infringing trade mark or get-up used by an infringer as a false trade description. The TDO empowered the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) to take criminal action against the infringer upon filing of an official complaint and the TDO by the trade mark owner. The TDO has been commonly used in Malaysia as a powerful quasi criminal instrument to prompt enforcement actions by the MDTCC.
The TDA 2011 has diluted the usefulness of the TDO with two amendments: only registered owners of trade marks in Malaysia are able to apply for a TDO; and the validity of a TDO has now been reduced from five years to one year.
In effect, trade mark 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. These trade mark 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. Trade mark owners must ensure that their marks are registered in Malaysia.
The reduced validity of a TDO may also not afford sufficient time to plan and execute enforcement actions effectively. However, the TDA 2011 permits the court to renew the validity of a TDO upon its expiry for a further period to be determined by the court, although this would entail time and cost for the trade mark owner.