Sources of Law

The legal frameworks governing patent protection in Malaysia are the Patents Act 1983 and the Patents Regulations 1986. The Patents Act 1983 provides for the substantive aspects of granting, enforcing and regulating patents, whereas the Patents Regulations 1986 govern the procedural aspects of patent applications. In light of the Malaysian Legal System, the Malaysian courts also rely on the principles established by relevant case law, interpreting and applying the provisions of the Patents Act 1983. The Intellectual Property Corporation of Malaysia (“MyIPO”) is also empowered to issue guidelines and administrative directives to facilitate the patent application process.

Patentable Inventions

Under Section 11 of the Patents Act 1983, an invention is patentable if it satisfies 3 criteria:

• it is new;
• it involves an inventive step; and
• it is industrially applicable.

Accordingly, an invention is eligible for patent protection if:

• it has not been publicly disclosed in any form worldwide;
• is not obvious to someone with knowledge and expertise in the field; and
• can be used/made in any industry.

Further, Section 12 of the Patents Act 1983 defines invention to be an idea conceived by an inventor, whether a product or process, that solves a specific technical problem. However, the following types of inventions are not patentable, according to Section 13 of the Patents Act 1983.

Discoveries, scientific theories and mathematical methods

Developing new mathematical techniques is an example of fundamental knowledge that is a part of the scientific process rather than an invention.

Plant or animal varieties; biological processes (except microorganisms)

Man-made microorganisms or biotechnological processes can be patented, but genetically modified or naturally occurring plant varieties cannot be patented. Plant variety can, however, be registered for protection subject to the provisions under the Protection of New Plant Varieties Act 2004 in Malaysia.

Schemes, rules or methods for doing business, mental acts or playing games

Abstract ideas and methods, such as algorithms or business methods, are excluded unless they are tied to a patentable product.

Methods for medical treatment or diagnosis

In order to avoid restrictions on necessary medical treatments, surgical techniques performed on humans or animals are not patentable; nevertheless, the products utilised in such techniques may still be patented.

Utility Innovations

Apart from patentable inventions, the laws of Malaysia allow the registration of utility innovations, as defined under Section 17 of the Patents Act 1983, to mean any innovation that produces a new product or process or that improves upon an existing product or process. Utility innovation differs from a patentable invention in that it is awarded for a “minor” invention (limited to one claim only) and does not need to meet the inventiveness requirements of a patent.

The following is the smooth process for obtaining a patent grant in Malaysia.

• The patent application is examined for formality once it is filed.
• A notice of clearance of formalities will be issued if the application is judged to have satisfied the formal requirements.
• After that, the applicant has 18 months from the filing date (or four years from the International filing date for national phase entry applications) to submit the requisite forms along with the prescribed fees to request a substantive examination or a modified substantive examination.
• The application will then undergo substantive or modified substantive examination once the allotted 18 months (or four years) have passed.
• The application will be granted and published if no adverse report or office action is issued.

The authority responsible for examining and granting patents is the Intellectual Property Corporation of Malaysia.

Typically, a smooth local patent application takes about two to four years to be granted. The official fees for filing a patent application, depending on the number of claims and the bulk of documents, are in the region of MYR1,500.

All foreign applicants must appoint a local patent agent.

Under Malaysian law, a patent right is only enforceable if it is registered. As such, the owner of a granted patent in Malaysia enjoys exclusive rights to prevent others from making, using, selling or distributing the patented invention without authorisation in Malaysia.

A patent grant is valid for one year and may be renewed annually for up to 20 years from the filing date. The renewal may be filed 12 months preceding the renewal due date and a six-month grace period is available from the expiry of the renewal due date, during which renewal can still be made, subject to surcharges. If, however, the renewal is not filed within the grace period, the patent owner may still renew the patent via reinstatement within six months after the expiry of the grace period by filing a statutory declaration providing valid reasons for the failure to renew on time and making the necessary payment of surcharges. The reinstatement process typically takes about six to nine months. A notice of reinstatement of the patent will be published. If, in any event during the reinstatement period, any third parties have acquired rights, such third parties’ rights shall not be prejudiced and shall not be construed as an infringement, subject to certain applicable exceptions on a case-by-case basis.

In Malaysia, there are no supplementary protection certificates or term extensions available in any technical areas. The available extension (renewal) is similar to that for all patent grants.

In Malaysia, an inventor or an employer may apply for and own a patent, depending on their respective arrangements.

Generally, an inventor is deemed to be the first owner of the patent, unless in circumstances where the invention was created by the inventor during the course of the inventor’s employment or when the inventor is commissioned for such invention, the employer shall then enjoy being the owner of the patent. In the employment practice, it is not uncommon to see policies or employment contracts specifying the rights to invention to belong to the employer, especially if the invention relates to the employee’s duties or was made using the employer’s resources. For inventions made at universities or other educational institutions, the ownership rule is highly dependent on the arrangement between the universities and the inventors.

In addition to the Patents Act 1983, which governs the legal framework surrounding patents, the Malaysian Contracts Act 1950 also plays a crucial role in agreements, particularly assignment and licensing agreements involving patents. Malaysian law generally does not require that assignment and/or licensing agreements be in writing. These agreements can be oral, written or by way of conduct, so long as they meet the following essential elements of a valid contract:

• offer and acceptance;
• consideration;
• intention to create legal relations;
• capacity to contract;
• certainty; and
• legality.

However, it is highly advisable to enter into proper assignment and licensing agreements to define each party’s obligations, the scope of rights granted and the terms of use, thereby reducing potential disputes.

Further, the Malaysian Patent Law does not make it mandatory for assignments and/or licences to be recorded with the Patent registry. It is, however, advisable for such assignments and/or licences to be recorded to ensure:

• proper documentation of the transfer or licensing;
• clear public notice of the rights involved;
• fewer unnecessary office actions; and
• a more straightforward enforcement process.

An assignment agreement and/or licensing agreement is required for the recordal of the assignment and/or licensing of a patent in Malaysia.

Patent infringement in Malaysia generally arises when (i) the feature of the patented claim is used without authorisation; or (ii) the infringing product works the same way as the patented claims.

The common defences raised by an infringer are as follows.

• The patent is not new and is anticipated by prior art; therefore, it is not patentable.
• The patent does not involve an inventive step and is obvious to a person having ordinary skill to produce it.
• The patent is not industrially applicable and cannot be made or used in any kind of industry.
• The patent is not an invention; it is a discovery, a scientific theory and a mathematical method.

Exhaustion of rights, compulsory licences, proportionality and FRAND are also available defences in Malaysia, although less common than the defences listed above.

In Malaysia, the Malaysian High Court is the court of first instance to determine patent disputes. Depending on the court’s availability and the complexity of the matter, a typical patent dispute may be concluded within one to two years from the date of filing.

If the validity of a patent is challenged during the publication period, the relevant forum for opposition is the Intellectual Property Corporation of Malaysia (MyIPO). Once the opposition period expires, an interested party can still challenge the patent’s validity by filing an invalidation proceeding in the Malaysian High Court. It is common in Malaysia for parties to request a stay of proceedings at MyIPO if they have already filed a lawsuit in the High Court, in order to allow the court to determine both the patent’s validity and any infringement issues. When validity is challenged in foreign patent offices, although patents are territorial rights, the assessment of validity (particularly regarding novelty and inventive step) is based on a worldwide standard. Consequently, findings of invalidity in foreign jurisdictions can be considered persuasive in Malaysian courts, but a final ruling on validity in Malaysia requires a court order, as Malaysian courts are not automatically bound by foreign decisions unless explicitly provided in law. In practice, when invalidity proceedings are initiated in both Malaysian courts and foreign patent offices, the parties often choose to run them concurrently rather than stay one while the other is ongoing. This approach depends on the specific circumstances of each case, especially cost and time considerations and is ultimately a strategic decision made by the parties involved.

An interim injunction is a remedy that can be sought when filing an infringement and/or invalidation proceeding. Besides this, other remedies available in an infringement case, subject to the court’s discretion, include:

• a declaration of infringement;
• a permanent injunction to prevent further infringement;
• an order to deliver or destroy infringing materials; and
• monetary damages, which can be awarded as a lump sum or based on an account of profits.

Additionally, the court may award aggravated, exemplary or punitive damages, among others. As for legal fees and costs, these are generally recoverable at the court’s discretion, depending on the complexity of the case and in accordance with the standard scale of costs prescribed under the Rules of Court 2012.

In Malaysia, trade mark protection is primarily governed by the Trademarks Act 2019, which provides a framework for the registration and protection of trade marks. The Trademarks Regulations 2019 supplement the Trademarks Act 2019 by providing the procedural laws in trade mark applications.

Under the Trademarks Act 2019, any traditional marks, such as words, logos, shapes, colours, sounds and scents, can be registered and, subject to certain conditions, non-traditional marks, such as holograms, moving images and three-dimensional shapes, can also be registered as trade marks.

While registration provides the strongest legal protection, unregistered trade marks are also recognised under the common law of passing off. In Malaysia, passing off is a legal doctrine that protects the goodwill and reputation of a trader’s mark or business identity, even if the mark is not registered, provided that the elements for passing off are satisfied, including, amongst others, that the unregistered mark has gained goodwill and reputation amongst the public.

In general, the essential elements of trade mark protection in Malaysia are:

• distinctiveness, as the trade mark must be capable of distinguishing itself from the trade;
• the trade mark must not be descriptive of the goods/services applied for;
• not similar to or identical to prior marks; and
• not against public morality and/or illegal.

For continuous trade mark protection, whilst Malaysia allows applications by way of an intention to use, the registrant is required to use the trade mark within three years from the date of issuance of the notification of registration, failing which the trade mark shall be subject to non-use cancellation proceedings by any third party. As such, continuous use of the trade mark since its registration is advisable.

Malaysia adopts the concept of adequate distinctiveness. The evidence of use need not be substantial, but needs to be adequate. However, it is important to note that, for the purpose of overcoming an office action issued on the grounds of non-distinctiveness/descriptiveness, local examiners are more readily convinced if the applicant has substantial evidence of use and/or evidence of use for more than five years.

Following the new Trademarks Act 2019, famous and/or well-known marks are protected in Malaysia under Section 76 of the Trademarks Act 2019, even if not registered locally, provided that the well-known marks requirements are fulfilled. However, Malaysia’s law does not establish a formal or procedural avenue for registering a mark specifically as “well-known” or “famous.”

In Malaysia, to enforce infringement action under the Trademarks Act 2019, a trade mark registration is required. Alternatively, an action for common law passing off may be brought.

A smooth trade mark registration process takes about nine months. Upon filing, the application first undergoes a formality validation to ensure that all procedural requirements are met. Once the application is deemed to have complied with the formality requirements, it proceeds to substantive examination, where it is reviewed for registrability. If no office actions or objections are raised during this examination, the trade mark is accepted and published for a two-month opposition period, during which third parties may oppose the registration. If no opposition is filed within this period, the trade mark is officially registered. An electronic notification of registration is then issued approximately two weeks after the registration is granted, confirming the successful registration of the trade mark.

The official fees for a smooth trade mark registration process for one mark in one class are in the region of MYR70, depending on the specifications applied for.

Multi-class applications are allowed in Malaysia, with a prescribed fee for each additional class.

Trade mark protection is valid for ten years and may be renewed every ten years in perpetuity.

In Malaysia, renewing a trade mark does not require submitting any documents. The registrant simply needs to pay the prescribed renewal fees before the renewal due date. If the renewal is not completed by the due date, a six-month grace period is granted after expiry, during which the registrant can still renew the trade mark by paying the renewal fees and surcharges. If the trade mark remains unrenewed after this grace period, the registrant has an additional six months to restore the trade mark by filing a statutory declaration explaining the failure to renew and paying the prescribed fees, along with the applicable surcharges.

In Malaysia, the threshold to prove use of a trade mark is generally quite low. A trade mark is considered to be in use if it is used in the course of trade for the registered goods or services. This use may include activities such as advertisements, demonstrations or other forms of promotion accessible to Malaysian consumers. Simply put, as long as the mark is actively used in a way that consumers in Malaysia can see or experience, it is regarded as genuine use of the trade mark.

Generally, a registered trade mark may be subject to non-use cancellation by any third party, provided that the trade mark is not used within a period of three years following the date of issuance of the notification of registration, subject to the provisions under Section 46 of the Trademarks Act 2019.

Under the Trademarks Act 2019, a registration of a trade mark allows the registrant to enjoy exclusive rights over the use of its trade mark in Malaysia in trade, which in turn prevents third parties from using identical and/or similar marks in the same or similar goods/services that may lead to a likelihood of confusion amongst the consumers.

However, the exclusive rights conferred by trade mark registration are subject to the following limitations:

• concurrent use – where two or more parties, in good faith, use similar trade marks simultaneously for the same or related goods or services;
• prior use – where a party has, in good faith, used a similar and/or identical mark before the registrant;
• fair use – where a party used the trade mark for non-commercial or descriptive purposes;
• use in good faith of the infringer’s own name/name of place of business or predecessor’s name/predecessor’s place of business; and
• limitation to the goods/services applied for – the registrant’s exclusive rights do not extend beyond the scope of its registered specifications.

A trade mark infringement arises when an act under Section 54 of the Trademarks Act 2019 occurs. For instance, when the infringing mark is likely to cause confusion amongst the consumers and/or there was no authorised use of the registered mark.

A trade mark dilution falls within the broader aspect of trade mark infringement and/or common law passing off, when the use of the trade mark is unauthorised and causes damage to the reputation and goodwill of the trade mark.

The tort of passing off occurs when these three criteria are fulfilled:

• there is goodwill attached to the goods/services;
• there is a misrepresentation by the infringer leading the public to believe that the goods/services are those of another; and
• the proprietor of the mark is likely to suffer damages/has suffered damages as a result of such misrepresentation.

In Malaysia, the court of original jurisdiction for trade mark disputes generally falls to the High Court.

In the context of criminal proceedings, counterfeiting registered trade marks, falsely applying registered trade marks to goods/services, making or possessing articles that may be mistaken for those bearing a registered trade mark and importing or selling goods with falsely applied trade marks are offences under the laws of Malaysia. Accordingly, depending on the nature of the offence, the perpetrator may face fines of at least MYR15,000 and/or imprisonment of up to three years.

Alternatively, the proprietor may lodge a complaint with the Malaysian Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) regarding infringing or counterfeit goods, providing supporting documents. The enforcement officer will then search for and seize the infringing/counterfeiting goods and initiate necessary criminal prosecution on a case-by-case basis.

Further, Malaysia has existing border measures under Section 31 of the Customs Act 1967 and Part XIII of the Trademarks Act 2019 to prohibit the importation of infringing goods into Malaysia.

Apart from the above, the trade mark owner may also file a civil suit against the infringer in the high court. The civil remedies available in an infringement case, subject to the court’s discretion, include a declaration of infringement, a permanent injunction to prevent further infringement, an order to deliver or destroy infringing materials and monetary damages, which can be awarded as a lump sum or based on an account of profits. Additionally, the court may award aggravated, exemplary or punitive damages, among others. As for legal fees and costs, these are generally recoverable at the court’s discretion, depending on the complexity of the case and in accordance with the standard scale of costs prescribed under the Rules of Court 2012.

The main source of law governing copyright protection in Malaysia is the Copyright Act 1987. Generally, the types of works protected include literary works, artistic works and derivative works such as books, music and films. Unfortunately, industrial designs and applied arts are not protected under copyright in Malaysia, but are instead regulated under the Industrial Designs Act 1996.

Copyright protection in Malaysia is automatic, provided it is original and fixed in a tangible form. As such, copyright registration in Malaysia is voluntary and effected by notification to the Intellectual Property Corporation of Malaysia for the purpose of providing evidence of authorship and the date of creation in the event of disputes arising.

In Malaysia, the author of a work is generally the owner of the copyrighted work. However, if the work is created by the author during the course of employment, the owner of the copyrighted work is the employer. This exception may vary depending on the arrangement between the author and the employer. If the author is commissioned for such work as a contractor and/or freelancer, the ownership of the copyrighted work depends on the arrangement between the parties. Similarly, depending on the arrangement between the author and authorship, joint ownership of the copyrighted work is also allowed.

In Malaysia, copyright owners may reproduce their work in any form, perform their work publicly, authorise their work to be adapted, modified or translated, distribute their work by way of selling or renting, import or export copies of their work, authorise their work to be used via licensing and/or transfer their work by way of an assignment.

Moral rights such as the right to authorship (being recognised as the author of the work), the right to prevent prejudicial treatment or distortion of the work and the right to object to any distortion that would harm the author’s reputation are recognised in Malaysia. These rights, however, cannot be conferred economically but may be waived with the author’s written consent. It is also not uncommon to see the author’s heirs exercise their moral rights in Malaysia to preserve the author’s reputation.

Generally, copyright protection in Malaysia lasts for the author’s lifetime from the date of creation of the work and 50 years after the author’s death. If the work is created by an employee in the course of work and owned by an employer, the copyright protection lasts 50 years from the date of first publication or 50 years from the date of creation if unpublished.

However, termination and reversion rights are not recognised in Malaysia. It may, however, be stipulated in the contract between the author and the owner.

One of the main defences to copyright infringement is fair dealing, ie, for the purposes of research, private study, criticism, review or the reporting of news or current events. When determining whether a dealing constitutes a fair dealing, the factors to be considered shall include:

• the purpose and character of the dealing, whether it is commercial in nature or for non-profit educational purposes;
• the nature of the copyright work;
• the amount and substantiality of the portion used; and
• the effect of the dealing upon the potential market for or value of the copyright work.

Other defences such as acts done by parody, pastiche or caricature, reproduction made in schools, universities or educational institutions of a work included in a broadcast intended for such schools, universities or educational institutions, the performance of a work by a non-profit making club for charitable or educational purposes and in a place where no admission fee is charged are also recognised in Malaysia.

Ultimately, the Malaysian courts assess factors such as the purpose of use, the extent of use, the necessity of use and the potential impact on the market to determine whether the copyright work was fairly used whilst safeguarding the interests of copyright owners.

A copyright infringement arises when any person, without the authorisation of the owner of the copyright, does an act which is controlled by copyright under the Copyright Act 1987 or imports, sells or distributes an article of the copyrighted work without the consent of the copyright owner.

Under the Copyright Act 1987, any person who:

• commits an infringing act by way of making for sale or hire any infringing copy;
• is selling, letting for hire or by way of trade, exposing or offering for sale or hire any infringing copy;
• is distributing infringing copy;
• has in his possession, custody or control, otherwise than for his private and domestic use, any infringing copy;
• by way of trade, exhibiting in public any infringing copy;
• importing into Malaysia, other than for his private and domestic use, an infringing copy;
• making or having in his possession any contrivance used or intended to be used for the purposes of making infringing copies;
• cam-cording in a screening room, etc (all of which are offences that fall under the Copyright Act 1987),

shall be subjected to a fine not less than MYR2,000 or more, depending on the offence and/or imprisonment not more than five years, depending on the offence.

Alternatively, the copyright owner may also take civil action against the infringer by filing an infringement action in the High Court. Whilst an interim injunction can be applied for and granted at the court’s discretion, other civil remedies available in an infringement case, subject to the court’s discretion, include a declaration of infringement, a permanent injunction to prevent further infringement, an order to deliver or destroy infringing materials and monetary damages, which can be awarded as a lump sum or based on an account of profits. Additionally, the court may award aggravated, exemplary or punitive damages, among others. As for legal fees and costs, these are generally recoverable at the court’s discretion, depending on the complexity of the case and in accordance with the standard scale of costs prescribed under the Rules of Court 2012.

When evaluating “substantial part” copying, Malaysian courts consider both quantitative and qualitative factors, such as:

• whether the copied element constitutes a significant part of the copyright work; and/or
• if a substantial amount of the copyright work was copied.

Courts frequently take into account the part’s importance to the entire work rather than just the copied piece.

Under Malaysian law, non-literal copying is also actionable, particularly when software is involved. This includes copying a work’s structure, sequence and arrangement. Courts acknowledge that the creative and functional elements of software – such as its organisation, flow and structure – are protected. If these non-literal components represent the original author’s significant intellectual effort and unique style, then copying them may constitute infringement.

Collecting societies in Malaysia, also known as collective management organisations, such as Music Authors’ Copyright Protection Berhad (MACP) and Recording Performers Malaysia Berhad (RPM), represent authors like songwriters, composers, music publishers and performers by managing the licensing of musical works for public performance, broadcast and streaming and collect royalties on their behalf. Whilst there is no clear regulation on tariffs and royalties, the Guidelines of Copyright (Collective Management Organisation) 2025 require collective management organisations to set out their tariffs and board information clearly and transparently. The terms of a licensing scheme proposed to be operated by a collective management body may be referred to the Tribunal, so that the tariff structures are not entirely dictated by the collective management organisation itself, but may also be challenged by the users before the Tribunal.

Generally, if the user intends to use a copyrighted work for commercial purposes, the user may obtain a license for such use through a collective management organisation appointed by the copyright owner. The licensing schemes that may be offered by collective management organisations are for reproducing the work, performing, showing or playing the work in public, communicating the work to the public, rebroadcasting the work, the commercial rental of the work to the public or making an adaptation of the work. The aspects of collective management organisation are regulated under Part IVA of the Copyright Act 1987.

Malaysia allows limited exceptions for educational, scientific and professional institutions through the Copyright (Public Libraries and Educational, Scientific or Professional Institutions) Order 1987, which permits certain limited reproductions or use of works for educational and library purposes without requiring licensing. However, Malaysia does not presently have any regulation providing for broadcasting licences; the licensing scheme framework under Section 27AA of the Copyright Act 1987, however, provides the Tribunal with certain oversight over the rebroadcasting of works. The broadcasting licence, not in copyright per se, falls under the jurisdiction of the Malaysian Communications and Multimedia Commission.

In the event of disputes over royalties or tariffs between the collective management organisations and users, it may be resolved via the Copyright Tribunal. Alternatively, parties may opt for arbitration and/or civil action in courts.

The main source of law governing industrial design in Malaysia is the Industrial Designs Act 1996. Trade dress is not commonly addressed in Malaysia, but is usually adopted under the aspect of tort of passing off under the common law.

Under the Industrial Designs Act 1996, the features of shape, configuration, pattern or ornament applied to an article by any industrial process may be protected, including surface decoration, contours, the visual appearance of packaging and the aesthetic arrangement of product features. It is, however, noted that functional features, methods or principles of construction and features dictated solely by technical necessity cannot be protected under industrial design in Malaysia.

Generally, an industrial design can be protected if it is novel worldwide, non-functional and not contrary to public morality. An unregistered industrial design right in Malaysia would fall within the common law tort of passing off. To establish passing off, it must be established that the design has acquired goodwill belonging to the owner, there is a misrepresentation that the design belongs to someone other than the owner and that there is a likelihood of damage and/or damage sustained by the owner as a result of the misrepresentation.

Upon filing of the industrial design application, it undergoes both formality and substantive examination. If no office action is issued, the industrial design will be granted and published. A smooth industrial design application typically takes about nine months. An industrial design is valid for a period of five years and may be renewed for another five years up to a maximum of 25 years.

An act of infringement of industrial design arises when a person without the licence or consent of the owner of the industrial design applies the industrial design or any imitation of it to any article that the industrial design is registered, imports into Malaysia for sale or for trade any articles of the industrial design or any imitation of it, sells or offers or hires or offers to sell the articles and/or imitations of it.

Generally, in the event of an imitation and/or infringement, the owner of the industrial design may:

• lodge a complaint to the Malaysian Ministry of Domestic Trade and Consumer Affairs (KPDNHEP), upon which the enforcement officers may take necessary actions to seize the goods;
• lodge a complaint to the Royal Malaysian Customs Department if the owner of the industrial design is aware of any imitation and/or infringing goods being imported and/or exported; and
• take necessary legal action against the infringers in court.

The civil remedies available apart from an interim injunction, subject to the Court’s discretion, are a declaration of infringement, a permanent injunction to prevent further infringement, an order to deliver or destroy infringing materials and monetary damages, which can be awarded as a lump sum or based on an account of profits. Additionally, the court may award aggravated, exemplary or punitive damages, among others. As for legal fees and costs, these are generally recoverable at the court’s discretion, depending on the complexity of the case and in accordance with the standard scale of costs prescribed under the Rules of Court 2012.

The Malaysian courts determine whether an article is dictated by function based on its visual appearance and appeal to the eye. Usually, the article may also be regarded as functional based on the article’s name. Partial design protection is also accepted in Malaysia. Partial designs claiming protection are usually shown in solid lines, whilst the remaining designs are represented with dotted lines. Accordingly, the assessment of the functionality of the article is limited to the aspect claimed. However, a design may be refused and/or invalidated for technical reasons, particularly where the design has no aesthetic value and the feature is dictated solely by technical function or necessity.

Malaysia does not have a specific provision governing trade secrets. Trade secrets are often categorised as confidential information and are therefore governed by common law and contractual agreements between the parties.

Information that qualifies as a trade secret is either defined under the common law or further defined by the parties in their respective contractual agreements. Typically, trade secrets are sensitive information and/or data, including, but not limited to, know-how, formulas, recipes, algorithms, customer databases, business methods and research and development data, which may be defined by the parties in their respective agreements.

To constitute a trade secret and/or confidential information, it is pertinent that the confidential nature of the information must be communicated expressly or under circumstances reasonably understood. The information, in this case a trade secret, must not be public knowledge, trivial or generally accessible to the relevant industry.

Generally, Malaysia does not have a specific statute dedicated to trade secrets. The common law is often referred to. It is expected of the owners to take reasonable steps to maintain the confidentiality of information, such as restricting access to trade secrets. Access limitations, confidentiality markers and confidentiality clauses in agreements, including non-disclosure agreements, are common ways to keep information private.

The confidentiality of a trade secret is not always disregarded when it is disclosed to employees. Employees are frequently required by contract to maintain the confidentiality of trade secrets. The confidentiality of trade secrets may be somewhat compromised by disclosure to third parties, depending on the third party’s role. When disclosing trade secrets to third parties, care should be taken. This includes signing a non-disclosure agreement, enforcing confidentiality clauses and limiting the number of trade secrets disclosed to reduce the likelihood of a trade secret being leaked without permission.

But it’s crucial to remember that unchecked disclosure can ruin concealment. The owners should take appropriate and consistent steps to protect the confidentiality of such information.

In Malaysia, misappropriation or unlawful acquisition of trade secrets generally occurs where confidential information is obtained, used, disclosed or exploited without authorisation. The common law breach of confidence would be applicable in the Malaysian context.

In the event of a dispute regarding breach of confidence by an employee, joint venture partner or competitor, the dispute may be resolved via arbitration and/or the Malaysian courts, subject to the jurisdictions and dispute resolution agreed by the parties under their respective agreements. Arbitration is usually the preferred dispute resolution method due to its ability to preserve the confidentiality of information.

In Malaysia, a trade secret is not time-limited and is subject to the confidentiality clause agreed by the parties in their respective agreements.

The impact of accidental disclosure is very significant. Protection is typically lost if private information is inadvertently made public without taking appropriate action to stop or reverse the exposure. However, depending on the degree of exposure and whether the information is practically retrievable from the public domain, a court may still find that confidentiality persists if the disclosure is genuinely accidental and the information is promptly contained before becoming truly public knowledge.

On the other hand, authorised disclosure does not always eliminate trade secret protection. In commercial practice, disclosure to workers, contractors, suppliers or joint venture partners is typical and won’t remove protection if it’s coupled with explicit or implicit duties of confidence. However, if authorised disclosure is made without sufficient confidentiality safeguards, it might still undermine protection. Regardless of the initial intent, Malaysian courts will typically treat information as no longer confidential once it is freely released to the public or shared in a way that permits uncontrolled dissemination.

In Malaysia, certain professions are statutorily bound to maintain the confidentiality of information. Accordingly, non-compliance with applicable cost of practice may result in:

• a fine not exceeding MYR100,000; or
• imprisonment not exceeding one year; or
• both, depending on the nature of the offence.

The civil remedies available apart from an interim injunction, subject to the Court’s discretion, are a permanent injunction to prevent further non-authorised disclosure, an order to deliver or destroy confidential information and materials and monetary damages, which can be awarded as a lump sum or based on an account of profits. Additionally, the court may award aggravated, exemplary or punitive damages, among others. As for legal fees and costs, these are generally recoverable at the court’s discretion, depending on the complexity of the case and in accordance with the standard scale of costs prescribed under the Rules of Court 2012.

In arbitration proceedings, the confidentiality of information is generally upheld. The Malaysian courts, however, operate on the principle that court proceedings are open to the public. Exceptions could, however, be made, subject to the courts’ discretion, on application in the interests of justice or public security or to protect confidential information.

Know-how is not statutorily defined in any statutes in Malaysia. It is commonly defined in agreements. Unlike trade secrets, know-how may include partially unsecured or experiential knowledge that is not easily reducible to writing or other documents. Accordingly, know-how is generally categorised as confidential information in agreements.

Confidential information is the bigger umbrella which encompasses trade secrets and know-how. Know-how is broader than trade secrets and trade secrets are information not publicly known or easily accessible. Trade secrets ought also to have greater commercial value than know-how.

In Malaysia, know-how is not a proprietary right; thus, the obligation to maintain its confidentiality is clearly set out in the relevant agreements. Notwithstanding that Malaysia has a Competition Act 2010 that regulates anti-competitive behaviour in markets, such as abuse of dominance, it does not govern know-how protection. As a result, the Competition Act of 2010 may, at most, function as a reference guide for reasonable confidence to be expected of know-how while balancing the fairness of trade competition.

In Malaysia, know-how is treated as confidential information and its scope is subject to the definition set out in the respective agreements. Generally, know-how includes technical and industrial processes, software and algorithmic know-how such as source code and data processing methods, commercial and business know-how such as supplier pricing structures, market entry strategies, internal pricing models, etc, industrial and operational know-how such as machine operation techniques and embedded experiential knowledge such as knowledge acquired through experience.

Depending on the nature of the parties’ contractual obligations, know-how disclosed to the other party may always be required to remain confidential. There is, however, no statutory requirement that know-how ought to be novel nor strictly economically valuable. However, the economic value of the know-how would determine the likelihood of confidentiality of the information and the impact if the know-how were disclosed without authorisation. As addressed previously, for know-how to receive protection under the ambit of confidential information, the know-how must be confidential in nature and the confidence of such information ought to be communicated and/or reasonably expected depending on the circumstances.

The employer is generally presumed to own know-how created by employees in the course of employment, particularly if the know-how was created using the employer’s resources. This, however, depends on the know-how created and:

• the employee’s role;
• the nature of the work; and
• whether the knowledge is part of the assigned duties.

To the contrary, know-how created by independent contractors and consultants does not presumptuously belong to the employer. The nature of arrangements under the respective agreements between the employer and the contractor shall be referred to. Usually, the know-how belongs to the contractor and the client (employer) may be granted a limited license to use it for an agreed purpose.

In a joint development relationship, know-how developed therein is governed under the respective contract.

There is generally no implied duty for employees to remain confident in the know-how and safety unless it is reasonably expected of the employees to do so. Otherwise, the duty remains with the owner of the information to ensure the confidentiality of such information prior to disclosure. Unless otherwise required under the agreement between an employee and employer, an employee has no implied duty to transfer know-how acquired back to the employer after leaving. It is, however, important to note that the employee must not retain any confidential and/or proprietary know-how of the employer.

In Malaysia, the protection of know-how is mainly found in agreements between the parties. The common contractual mechanisms used include non-disclosure agreements, confidentiality clauses, non-use provisions prohibiting the use of know-how for any purpose other than the specified project, purpose limitation clauses, know-how ownership and assignment clauses, post-termination restrictive clauses, etc.

Know-how can be assigned or licensed separately from trade secrets and patents. There are no formalities governing know-how assignments and licensing. As such, the general principle of contract in Malaysia is adopted. Under the Contracts Act 1950, a valid agreement may be in writing oral or by way of conduct, provided that the following elements are fulfilled:

• offer and acceptance;
• consideration;
• intention to create legal relations;
• capacity to contract;
• certainty; and
• legality.

However, to ensure proper documentation and clarity, it is advisable for such agreements to be made in writing.

Reverse engineering is generally lawful in Malaysia, but it depends on how the product and/or information was obtained, whether confidentiality obligations apply and whether there are any contractual restrictions between the parties. Accordingly, reverse engineering is accepted if it is done from publicly available products.

Generally, contractual restrictions prohibiting reverse engineering are acceptable provided that they comply with the Contracts Act 1950 and do not amount to unreasonable restraint of trade.

Malaysia does not have any sui generis database right protection. Depending on the nature of the data, it may be protected under:

• the Personal Data Protection Act 2010;
• the Copyright Act 1987, as confidential information; and
• by any provisions mandated under the respective agreements entered into between the parties.

Accordingly, Malaysian courts adopt a more liberal approach to scraping and data extraction, provided there is no express clause prohibiting the scraping and/or extraction of data.

At this juncture, unlike in some jurisdictions, the laws on AI-generated outputs have not been properly set in stone in Malaysia. Accordingly, the owner of the AI-generated work shall be the employer and/or the human creating the output. As such, Malaysia has no precedent of naming AI as an inventor. Nonetheless, it is believed that, in the absence of such laws, when such issues arise, the common law will be adopted to fill the gap until express legislation is enacted to address this context.

Given that the statutory law governing AI-generated works is still being developed in Malaysia, businesses there rely on contractual structuring of such works.

In the absence of statutory law governing AI training datasets, the legal risks arising from using copyrighted works or trade secrets would fall within the ambit of copyright infringement, trade secret and confidential information and contractual risks. As such, the exceptions that may be available are the common exceptions applicable under copyright, trade secrets and/or any other exceptions explicitly allowed under a contract. The enforcement available is therefore similar to that available for copyright, trade secret and breach of contract, which have been addressed above.

To date, Malaysia has yet to enact any laws to enforce against the misuse of generative AI tools. As such, the available mechanisms are those provided under copyright law, breach of confidential information and the Contracts Act 1950.

Accordingly, in the absence of an explicit law governing AI, the AI providers may still be exposed to infringement risks as the owners of AI.

Generally, one form of IP protection would be preferred over another for the same subject matter, depending on the following factors, amongst others:-

• the intended scope of protection;
• the potential risks in the event that the IP is not protected in a certain aspect;
• the impact in terms of commercial value of the risks that may arise;
• the cost involved; and
• the challenges and chances of success.

Between patent and trade secret protection, the most common factors are the intended scope of protection, the likelihood of reverse engineering, the ability to keep the information confidential indefinitely and the relative value of secrecy versus commercial value through disclosure.

Malaysia does not provide a statutory or judicial limit on cumulative protection. It is, however, trite that the scope of protection in different IP areas is limited to its respective scope, ie, copyright for the work, trade mark for the mark, industrial design for the aesthetic design, etc. In the event of conflicts involving multiple IP rights over the same product or feature, the local courts would dissect the issues based on the area of law, which in this case would separate each matter in accordance with the respective intellectual property area.

It is generally possible for confidential know-how and technical information to be protected as a trade secret before and during a patent application by way of an agreement. However, the protection of the confidentiality of know-how and technical information as trade secrets after a patent grant, once the patent is published, is limited to information not disclosed in the patent grant, even if an agreement provides for confidentiality.

Trade marks in Malaysia are signs that distinguish goods or services from one another. The shape of an article may be registered as a trade mark if it is capable of being distinctive of the applicant. Trade dress, however, is not statutorily protected, but the equivalent of which is similar to the tort of passing off under the common law. As such, trade dress is usually relied upon when the proprietor has not registered a trade mark and/or design. The scope of protection for an industrial design is, however, limited to the aesthetic appearance of products, the ornamental design of packaging and visual configuration. Whilst it is possible to protect shapes and packaging simultaneously as trade marks and industrial designs, the scope of protection is limited to the respective statutory provisions.

Protection under both copyright and trade mark law is possible, provided that the logo fulfils the requirements of a work under copyright and a mark under trade mark law. The scope of protection and enforcement rights is therefore limited to the respective statutory provisions. The copyright laws in Malaysia do not impose any limitations on the enforcement of trade mark rights and vice versa.

Claims based on different IP rights may be brought under the same proceedings. In assessing injunctive relief, each intellectual property right will be dealt with separately. There is, however, a prohibition on double recovery in the same lawsuit if it is duplicative for the same losses, so damages and/or compensatory remedies are consolidated and dealt with or sometimes, depending on circumstances, apportioned accordingly.

In Malaysia, local courts refer to treaty obligations and conflict of laws concepts to manage cross-border issues arising between national and international intellectual property systems. Subject to jurisdictional restrictions, cross-border enforcement and conflict of law issues, Malaysian courts frequently utilise local law as the governing rule of decision. Although they may be compelling, foreign rights and judgments are not legally binding and enforcement is still jurisdiction-specific. In reality, domestic legal proceedings and contractual agreements (such as licensing and arbitration clauses) are used to handle cross-border disputes. Courts refer to international obligations without undermining the territorial character of intellectual property protection.