MalaysiaRaising the profile of IP in Malaysia

Although the government's focus on developing a so-called multimedia super corridor in Malaysia has undoubtedly helped focus attention on intellectual property, awareness of IP and respect for IP rights within Malaysian society as a whole is still rather low. According to a survey by the Business Software Alliance (BSA), Malaysia has a software piracy rate of 68%, higher than the Asia Pacific average of 55%. Nonetheless, steps are being undertaken to address this matter, targeting both industry players as well as the general public. The government has stepped up its efforts in the "Ops Tulen" anti-piracy software campaign that it launched in 2002, by implementing "Tulen Patrol", a joint project by the Ministry of Domestic Trade and Consumer Affairs and the BSA. Under these patrols, between seven and 10 enforcement officers, together with BSA officials, conduct random checks at offices. This year alone, 24,000 warning letters have been issued to errant members of the public over their use of pirate software. In addition, the government has embarked on a blitz campaign in the media, highlighting the evils of piracy and theft of intellectual property. March 3 has now been designated "Intellectual Property Day" to raise awareness about the importance of respecting and valuing IP.

Malaysia's IP regime aims to protect patents, trade marks, industrial designs, copyright, geographical indications and layout designs of integrated circuits. Malaysia is a member of the World Intellectual Property Organisation, a signatory to the Paris and Berne Conventions and TRIPS.

The PCT effect

In 2003 the Patents Act 1983 was amended to provide for Malaysia's accession to the Patent Cooperation Treaty (PCT). Industry welcomed Malaysia's accession with open arms, promising as it did easier and more cost-efficient cross-border filings as well providing an extended period of time for applicants to delay examination of their applications. However, it is rather disappointing that - as at the date of writing - PCT filing procedures have yet to be implemented in the country. Queries to the Intellectual Property Corporation of Malaysia have revealed that procedures enabling patent applications to be filed under the PCT are not expected to be implemented until early 2005.

The Patents Act 1983 and the Patents Regulations 1996 govern patent protection in Malaysia and provide two types of proprietary rights for inventions - patents and certificates for utility innovations. In order to be granted a patent, an invention must be new, involve an inventive step and be industrially applicable. Getting a certificate for utility innovations, on the other hand, is substantially easier as it does not require inventive step. A patent is granted for a period of 20 years from the date of filling, while a utility innovation is valid for an initial duration of five years from the date of filing of the application, although the term is subject to three possible extensions of five years each.

Many hoped that recent amendments to the Patents Act would also specifically address the issue of software patents, but as of the date of writing, the patentability of software remains in question. This uncertainty stems from the fact that the 1983 Act is ambiguous as to the interpretation of Section 13(i), which lists items that may not be granted a patent in Malaysia. Among them, listed in sub-sections (a) and (c) are mathematical methods as well as schemes, rules or methods for doing business. Since the basis of all computer software are essentially (though albeit complex) mathematical methods of doing a particular act or business, there has always been concern that the 1983 Act has in essence ruled out the possibility of patenting software in Malaysia.

As it stands, software remains protected under the Copyright Act 1987 as a literary work. However, the dynamic nature of software has always created debate as to whether it would be more appropriately protected by means of patents, as is increasingly the case in other jurisdictions. In the US, IP owners have had reasonable success in getting patents for their software. The reason for this is that software is increasingly being seen as a patentable process rather than a mere mathematical method of computing results.

Initiatives by the Intellectual Property Corporation of Malaysia (IPCM)

The IPCM was formed in March 2003 to regulate and supervise matters relating to intellectual property in Malaysia. It took over the functions of the IP division of the Ministry of Domestic Trade and Consumer Affairs and has jurisdiction to regulate and supervise issues relating to intellectual property. This includes advising on IP legislation and expanding the pool of intellectual property expertise in Malaysia.

To date, the IPCM introduced several measures to enhance its own efficiency as well as the scope of its services. Efforts have been made to reduce the backlog of cases by employing more examiners and implementing a new system of concurrent examination of backlogged and new applications. It has upgraded its facilities and services, enabling searches for patent and trade mark registrations to be carried out over the internet, albeit on a trial basis. There are plans to introduce on-line filing for patent and trademark applications and to create a database to help the commercialization of patented products by matching patent owners with potential investors.

The growth of biotech

Biotechnology is being seen as the spur to the next wave of industrial wealth, and Malaysia is no exception in pursuing this trend. Malaysia recently launched its Bio-Valley initiative in a bid to woo foreign partners and investors. The government is planning a national biotechnology policy to address issues of infrastructure and incentives, with a Bill of Guarantees likely to be included for the benefit of biotechnology industry players.

The Bio-Valley, a 200-hectare project comprising research, commercial and education facilities relating to biotechnology activities, is expected to be completed in 2006. The first phase involves the implementation of three national institutes - the Institute for Agro-Biotechnology, the Institute for Pharmaceutical and Neutraceutical Biotechnology and the Institute for Genomics and Molecular Biology, which will act as centres of excellence to stimulate the development of the biotechnology sector in Malaysia.

The government has also established biotechnology venture capital funds amounting to over RM1.3 billion ($342 million) and is proposing a number of sweeteners to attract investment, including special tax status for companies as well as a five-year 50% tax exemption for researchers for the income they receive from commercializing their research findings.

Laws are also being drafted to protect and regulate access to Malaysia's local biodiversity resources, namely the Access and Benefit Sharing Bill and the Biosafety Bill.

The Access and Benefit Sharing Bill seeks to ensure fair and equitable sharing of benefits from the use of Malaysia's genetic resources and to avoid cases of bio-piracy. The Bill is expected to impose a requirement that parties wishing to conduct research on, and export or sell local bio-diversity resources must apply for specific permits for such activities. Those conducting such activities without permits may be liable to a fine and/or a jail term. It is hoped that this will enable the authorities to monitor such activities and avoid cases of bio-piracy.

Meanwhile, the Biosafety Bill aims to ensure that products are safe to use and do not pose any danger to the environment, humans and animals. Under the Bill, products must be introduced to a "competent authority" comprising representatives from various government departments so as to ensure that they comply with requirements under law. The Biosafety Bill is expected to be tabled in Parliament sometime this year.

A new IP court

Concerned by the number of backlogged intellectual property cases, the Malaysian government recently announced plans to set up an IP court to speed up the disposal of such cases. This move is to be lauded since intellectual property law is a highly specialized area of law and the number of cases has started to rise. Statistics show that as of 1999, there were 236 pending cases under the Copyright Act 1987 alone, which has yet to be settled.

The launch of a strategic IP plan

The Malaysian government has also proposed a strategic intellectual property plan to manage and commercialize the intellectual property sector comprehensively and to maximize revenue. Serving as a guideline to monitor all matters relating to intellectual property rights, the plan recommends the government adopt a 10-point thrust that deals with IP creation and commercialization, capability-building and awareness, international protection as well as innovation and management. Alongside the strategic IP plan, other proposals in the pipeline include the drafting of the Millennium Capital Bill to improve the commercialization and export of intellectual property.

Dealing with the internet

Malaysia has started talks about ratifying the World Intellectual Property Organisation (WIPO) Performance and Phonograms Treaty and the WIPO Copyright Treaty. Also known as the Internet Treaties, the two treaties establish basic standards of protection for copyright and related rights on the internet and other digital mediums.

Strictly speaking, the Copyright (Amendment) Act 1987 already substantially embodies and reflects the provisions of the Internet Treaties and as such, the ratification carries no real legal significance. Under the Copyright (Amendment) Act, unauthorized transmission of copyright works over the internet is already regarded as an infringement of copyright because the owner of a copyright work has the exclusive right to control "the transmission of a work through wire or wireless means to the public, including the making available of a work to the public in such a way that members of the public may access the work from a place and at a time individually chosen by them". Further, the definition of a literary work now includes table or compilations "whether or not expressed in words, figures or symbols and whether or not in a visible form," thus including works created by computer.

Notwithstanding the above, ratification of the Internet Treaties by Malaysia would signify Malaysia's commitment to developing a intellectual property legal regime and help promote the development of e-commerce in the country. The authorities have indicated that once the Internet Treaties are implemented, the legal and regulatory framework now in place will be reviewed and tightened to cater for new developments.

Contact details

Azmi & Associates

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203 Jalan Bukit Bintang

5510 Kuala Lumpur

Malaysia

Tel: +603 2145 6161

Fax: +603 2145 7171

Email: general@azmilaw.com.my

Website: www.azmilaw.com

Haslyna Hashim

Haslyna Hashim is a senior associate practising in the Multimedia, Technology & Intellectual Property practice group of Azmi & Associates. She graduated from the University of Kent, UK with an LLB in Law with Computing. Haslyna advises clients on matters relating to IP, IT and telecommunications. She represents both local and foreign companies, including a number of blue-chip companies. Before commencing legal practice, Haslyna gained insight into the IT industry through a stint at a leading IT company providing integrated software solutions for financial institutions. Haslyna has conducted talks and seminars on IT and intellectual property law at venues including the National Writers' Association and the Malaysian Judicial and Legal Training Institute. She also contributes articles in her practice area to local and international publications, and is a member of a number of intellectual property associations such as ASEAN IPA, MIPA and LESM.

AJ Surin

AJ Surin heads the Multimedia, Technology and Intellectual Property practice group of Azmi & Associates, a firm of over 30 lawyers. He has advised clients on matters relating to the law on digital signatures, regulatory and licensing issues relating to information technology, computer and telecommunications contracts as well as domain name issues. Surin frequently speaks at conferences and seminars on topics such as cyberlaws and IP. He recently spoke at the Asian Strategy & Leadership Institute's National Biotechnology and Life Sciences conference on the TRIPs agreement, and has also spoken on the harmonization of cyberlaws at the Infosecurity conference organized by the Malaysian National Computer Confederation and the conference on IT research and applications organized by the Tun Abdul Razak University. Mr Surin writes for a number of Malaysian newspapers, and previously wrote a regular column in the New Sunday Times called "The K-Economy". He contributes a monthly feature on cyberlaws in the computer supplement of the Star newspaper.