Enforcing Intellectual Property Rights in Malaysia Training of Trainers Programme organised by WIPO, MyIPO, MDeC, 24 February 2011 TEO BONG KWANG Advocate & Solicitor Registered Trade Mark, Patent and ID Agent Managing Partner, Wong Jin Nee & Teo

Road Map of the Talk Why enforcement is important The overall strategy Criminal enforcement Civil enforcement

Importance of Protecting and Enforcing IPRs Important for various reasons: Maintaining competitive edge Enhance brand loyalty Protect goodwill over brand Generate more income Maintain & enhance value of IP

Enforcement of IPRs – Some Preliminary Observations Crucial to adopt a vigilant attitude against improper use of IPRs so as to prevent dilution of prestige of brands or damage to goodwill To be effective, such vigilance policy has to be implemented and practised by the top management and all level of marketing personnel The employee should be the ear and eye for the trade mark owner

Overall Enforcement Approach Strategic planning and implementation BIG picture & holistic approach Policing Regular and consistent enforcement Internal policy Publicity Engagement

How to Curb Infringing or Counterfeiting Activities You cannot eradicate them completely but you can definitely reduce them. Report suspected cases immediately Buy trap purchases – keep receipts, jot down the identities of the sellers. Consider surveillance/investigation against big target like wholesaler, importer.

The Pyramid of an Effective Enforcement Engagement Education

Enforcement Steps Identifying instances of infringing activities Evaluating leads Gathering evidence Taking action against offenders Warning notice Cease and Desist letters Criminal raid Civil action

Two Main Enforcement Routes Criminal Enforcement Civil Enforcement

Criminal Enforcement Criminal sanctions (through Enforcement Division of the Ministry of Domestic Trade, Co-operatives and Consumerism) are key to protection and enforcement of IPR Element of fear Demonstrates gravity and seriousness Deterrent sentences – fines and jail sentence

Enforcement under Trade Descriptions Act (‘TDA’) Prohibition against false trade descriptions Applying a false trade descriptions to goods Supplies or offers to supply goods to which a false trade description is applied in the course of business

What is Trade Description? Any indication whether given directly or indirectly, and by whatever means given of any of the following matters with respect of any goods: Nature or designation; Approval by any person Person by whom the goods is manufactured, produced.

What is a False Trade Description? Any trade description which is false to a material degree

Penalty for False Trade Description For individual, on conviction, shall be liable to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding 3 years or to both. For corporate offender: a fine not exceeding RM250,000.

Trade Description Order (“TDO”) An order issued by the High Court declaring certain mark or get-up to be a false trade description. Peculiar to Malaysia

Effect and Importance of a TDO Effect of a TDO: It is admissible and conclusive proof of a false trade description. No need to prove that the mark or get-up as specified in the TDO is a false trade description again in any proceedings under the TDA

Effect and Importance of a TDO The IPR owner who obtains a TDO will go to the Enforcement Division (‘ED’), lodges a complaint regarding the infringing activities. The officers of the ED are obliged to investigate the complaint and seize the infringing goods. Search and Seizure Prosecution of the infringer.

CIVIL ACTION

Notice before action Normally, before a civil suit is instituted, the IPR owner will issue a cease and desist letter (‘C&D letter’) Before instituting a civil suit, think about the following….

Litigation: Going to War ? Sword Is litigation necessary? Infringer refuses to comply with C&D To avoid an image of “paper tiger” Right to sue Recordal of Assignment? Registered User Exclusive Licensee Check your weapons Any flaws – e.g. non-use for 3 years Ability to substantiate claims based on records? Aggressive but not reckless Aim for quick result and adopt pragmatic approach Summary judgment Shield Any way to avoid litigation Settlement on a without admission of liability basis? Licensing/acquisition? Challenge validity of IPR? Investigate defences available Can someone else pay? Source of supply Warranties/Indemnity provided by suppliers Do not discount out of court settlement at any stage

Pre-emptive remedy: Anton Piller Order If there is reason to believe that the Defendant may destroy the offending goods or evidence of infringement – IPR owner may consider filing for an Anton Piller Order (‘APO’).

Pre-emptive remedy: Anton Piller Order APO: the Nuclear Weapon of civil procedure.

Pre-emptive remedy: Anton Piller Order An order permitting the applicant to enter specified premises to inspect and take into custody documents or articles relevant to the action, which may be otherwise destroyed. The main objective: to preserve material evidence.

Pre-emptive remedy: Anton Piller Order Conditions for an Anton Piller Order: The plaintiff has an extremely strong prima facie case that the defendant is liable for infringement That the defendant has in his possession incriminating documents or evidence That there is a real possibility that such evidence may be destroyed

Ways to End Litigation Quick Interlocutory Injunction Anton Piller Order Summary judgment Early trial? (instead of applying for interlocutory injunction)

Case Study: Abercrombie & Fitch Co Case Study: Abercrombie & Fitch Co. & Anor v Fashion Factory Outlet KL Sdn Bhd & Ors (reported in [2008] 4 MLJ 127; [2008] 7 CLJ 413) Cease and desist letter sent Letter of Undertaking (LOU) signed Criminal enforcement raid done Civil suit filed based on result of criminal raids Summary judgment obtained Directors permanently injuncted as well Payment of damages Publication of apology ad

Case Study: Leo Pharmaceutical Products Ltd A/S v Kota Pharma (M) Sdn Bhd (reported in [2009] 5 MLJ 703) Attempts were made to settle - failed Action for trade mark infringement and passing off filed Attempt for interlocutory injunction failed Full trial completed – succeeded on both causes of action Substantial damages assessed and agreed

Case Study: Leo Pharmaceutical Products Ltd A/S v Kota Pharma (M) Sdn Bhd (reported in [2009] 5 MLJ 703) Fucidin v Axcel Fusidic Fucicort v Axcel Fusi-corte

Any other issues Questions??

 Wong Jin Nee & Teo, February 2011 THANK YOU! Mr. Teo Bong Kwang Tel : +603 20923322 Email : tbk@wjnt-law.com Copyrights & Trade Marks of third parties in this presentation belong to the respective owners and are used solely for purpose of private study & a non-commercial basis  Wong Jin Nee & Teo, February 2011