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The Madrid System’s Continuing Effect and the Trend for Malaysian Intellectual Proprietary Rights to Expand Beyond International Borders

It has been approximately 3 years since Malaysia’s accession to the Madrid Protocol System in 27.09.2019 in Geneva and since then, the effects of this inclusive system has slowly been felt in trademark registration market, predominantly in the sense that the trademark proprietors and business’ owners have started gaining awareness of the possibility of growing their marks not just in the borders of Malaysia, but also developing their marks along with their business opportunities overseas. The Madrid System has definitely broken down the nationalistic restrictions which was experienced by the Malaysian market prior to the accession, and in a lot of ways help paved way for Malaysian business owners’ determination to progress its business overseas.

The Madrid system is afforded to any Malaysian citizen, body or corporation incorporated under the laws of Malaysia, persons domiciled in Malaysia  and/or even as long as such persons have real and effective industrial/commercial establishment in Malaysia. In another words, as long as you have a business ongoing in Malaysia, you will be able to avail yourself to the convenience of Madrid System. Fees wise, you would only need to pay for handling fee (MyIPO), the basic fees for WIPO, and fees for the designated countries you wish to have coverage of protection for your mark.

Currently, the Madrid System comprises of 106 members and in total, covers 122 countries. Other than the local application for trademark at MyIPO, a business need only to file one additional, single application for the relevant trademarks and protection will be afforded to over 122 countries through this system. It also greatly reduces the fees and costs involved, as businesses prior to this would be required to engage separate trademark agents in each individual country it seeks protection towards, and would be required to pay varying amount of fees throughout each country. Now, you need only to engage one single trademark agent which you are familiar with in your own home country. The Madrid System essentially breaks down the encumbrances brought on by country borders and nationalistic bureaucracy, and in turn embraces an inclusive business worldview. Malaysia in acceding to the Madrid Protocol also shows commitment in pushing forward internationalisation of Malaysian-established businesses, and to further enhance the notion of intellectual proprietary rights and protection.

It is also interesting to observe that other facets of the intellectual property law are also starting to not only embrace, but to strengthen the governance of Trademark in international terms. The latest Geographical Indications Act 2022 (which repeals the Geographical Indications Act 2000) has shown material changes, which includes:-

  • i. The eligibility of registration for a Geographical Indication has been changed from trade organisation or association in the old act (which restricts the eligibility to bodies and corporates) to the word “persons” in the new act. This allows more entities to be eligible to register for a geographical indication.
  • ii. A much more detailed procedure for the application of Geographical Indication has been proffered, whereby the process of examinations, provisional refusals, and acceptance was all enumerated;
  • iii. Grounds for refusal, which was not previously listed, was also stated clearly in the new GI Act 2022;
  • iv. The GI Act 2022 also had, in tandem with the other intellectual property statutes, introduced enforcement and offences.

To understand how geographical indications is material to the internationalistic trend of intellectual property rights, one can just simply look at the Federal Court’s decision in Maestro Swiss Chocolate Sdn Bhd & ors v Chocosuisse Union Des Fabricants Suisses De Chocolat & ors and Anor Appeal [2016] 2 MLJ 359, whereby the brand of “Swiss Chocolate”, emphasis being on the geographical indication of “Swiss”, is protected as the Swiss Chocolatiers’s goodwill and reputation in terms of their geographical indication is a material intellectual property rights. With the new GI Act 2022, the strengthening of governance and protection for geographical indications shows a trend that Malaysian brands can market and promote their local brands with assurance that the quality ascribed to the locality of the product or brand is protected.

The recent decision by the Federal Court which reverses the Court of Appeal’s decision in Guangzhou Light Industry & Trade Group Ltd & Ors v Lintas Superstore Sdn Bhd [2022] 4 MLJ 339 had also address the growing need for intellectual property governance in terms of importation/exportation between nations. The FC had limited the application of the defence of “parallel imports” in terms of trademark infringement, whereby a party whom imported non-counterfeit products overseas from a manufacturer holding the intellectual proprietary rights (gray products) are not allowed if there is no consent given by the manufacturer. Whilst this seems to be limiting the importations by local companies to a certain extent, it can be, at the same time, viewed as the Malaysian intellectual property law’s stance to protect overseas trademarks and brands, which may be in contrary to the stance of several other jurisdictions (United States, Australia). In essence, the doctrine of exhaustion in Malaysia can be summarised that an overseas proprietor’s rights does not exhaust unless clear consent has been given to local body and/or companies to import the products and use the trademark. This may be interpreted as the Malaysian stance to commit further in protecting intellectual property rights internationally.

Therefore, it is with great pleasure to see that the trend of Malaysian intellectual property law is embracing the internationalistic view. We are extremely hopeful that these trend will promote local business to an international stage, and at the same time be protective towards international brands as well to encourage foreign businesses’ investments, importations and induction into the Malaysian market.

This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

About the Author
Loh Zien Zen
Zen, Chyuan & Farliza

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