Patent Litigation 2021

Last Updated February 15, 2021

Malaysia

Law and Practice

Authors



Gan Partnership is a leading law firm specialising in dispute resolution, alternative dispute resolution and IP. Led by a team of advocates with more than 20 years’ experience, this internationally recognised firm provides clients with an arsenal, ranging from senior counsel with over 25 years’ experience to aggressive junior and modern litigators. Following the recent addition of two partners with over three decades of experience between them, the firm has grown from strength to strength and aims to expand even further. The IP team is known for litigation and enforcement, registration and prosecution, commercialisation, strategy and branding, franchising and licensing, privacy and data protection, confidential information, entertainment, gaming, advertising and media, technology and telecommunications.

In Malaysia, inventions are protected by patent law, and innovations are protected by the laws governing utility innovations (UI).

Sources of law for patents and UI include:

  • the Patents Act 1983 (PA);
  • the Patent Regulations 1986 (PR); and
  • case law.

The decisions of the Boards of Appeal of the European Patent Office and Enlarged Board of Appeal are persuasive in Malaysia.

The Intellectual Property Corporation of Malaysia (IPCM) is undertaking a review of the PA to accede to the WIPO Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure.

Patent

An aspirant patentee may obtain protection via:

an application to the Patent Registration Office of the IPCM for a national patent under Part VI , PA; or

an application for international filing under the Patents Cooperation Treaty in Part XIVA , PA.

National patent

Under the Malaysian patent regime, for an inventor to own a patent for an invention, they must be the first person to file a patent application with the Patent Office of the IPCM (Regulation 5(2), PR).

Applications undergo a full examination to determine whether they fulfil all the substantive requirements for the grant of a patent, including assessment on novelty, inventive step and industrial applicability.

Briefly, the procedure for registration involves:

  • filing an application for the grant of patent;
  • preliminary examination of the application;
  • public inspection of the application;
  • search and substantive or modified substantive examination; and
  • grant of the patent.

International filling under Patent Cooperation Treaty (PCT)

The international filing is divided into two stages, an international phase and a national phase.

International Phase

An applicant may make an international application within Malaysia and to then designate the PCT signatory countries (153 countries on 1 December 2020) in which they wish to seek patent protection. This enables patent protection to be sought simultaneously across the designated countries. As the application is given an international filing date, the application has the same effect as an application for a national filing under the PA.

An international search is performed by an International Searching Authority (ISA) chosen by the applicant to find any written material or prior art to establish whether the invention in the application is new.

The ISA will issue:

  • an international search report, which contains a list of documents relating to the issue of novelty; and
  • a written opinion on the patentability of the invention.

This report and opinion would indicate the applicant’s chance of success in the countries in which they seek protection. The applicant may then decide whether to amend or withdraw their application.

If the applicant continues with the application, the International Bureau of the World Intellectual Property Organization (WIPO) will publish the international application and the international search report. Approximately 18 months after the application or priority date (if the applicant claims priority), the application is published in the PCT Gazette by WIPO (published weekly).

An applicant may opt for an international preliminary examination for a preliminary and non-binding report on patentability, undertaken by an International Preliminary Examining Authority (IPEA). A specific "demand" is submitted to the IPEA, which will examine the application and send the applicant an international preliminary examination report setting out an opinion as to whether the invention in the application is suitable for patent protection in the countries which such protection is sought.

National Phase

For an international application to proceed in the PCT signatory countries designated in the application, the application will enter the national phase, where the application is examined separately by the national patent office in accordance with the patent law of each country. In Malaysia, the applicant must submit documents required under the PA, and the application will be considered as a national filing and subjected to the requirements of the PA.

Comparing the PCT system with the traditional route, an applicant enjoys an additional 18 months to evaluate the patentability of an invention in the countries in which they seek protection and to determine its commercial viability.

UI

A UI, as a “minor patent”, requires a lower level of patentability requirement. It is defined as “any innovation which creates a new product or process, or any new improvement of a known product or process, which is capable of industrial application, and includes an invention” (Section 17, PA). 

A UI must be new and be industrially applicable. The requirement of inventive step is irrelevant for UIs (Section 17A(2), PA). Since the requirement of inventive step is irrelevant, common general knowledge which is associated with an inventive step is inapplicable vis-a-vis the ascertainment of novelty for the UI (Kendek Industry v Ecotherm (TFT) [2010] 10 CLJ 219; Emerico v Maxvigo Solution [2020] 1 LNS 206).

The UI registration is maintained in the Register for Certificates for UI (Section 32, PA). The criteria to register a UI is set at a lower threshold, compared to those required of a patent. An application for a Certificate for a UI (UI Certificate) should contain one claim only.

Conversion

An application for a patent may be converted into an application for a UI, and vice versa (Section 17B(1) and (2), PA). A request for conversion shall be filed not later than six months from the date of the Examiner’s Report (Section 17B(4), PA).

The grant usually takes about three years.

An expedited examination process is available. Requests for expedited examination may be made after 18 months from the priority date/filing date. The grant of certificate may be approximately eight weeks from the date of the request.

An applicant, who is not based in Malaysia or not a Malaysian resident, must apply for the grant through a patent agent (Section 86(5), PA).

Average costs are approximately MYR2,000, excluding service tax.

Patent

The duration of a patent is 20 years from the filing date of a patent application (Sections 35(1) and 28(1), PA).

For a patent filed or granted before 1 August 2001, the duration is 15 years after the date of its grant or 20 years from the filing date, whichever is later (Section 35(1B) and (1C), PA).

UI

The UI Certificate is valid for ten years from the filing date of the application. Before the ten-year term expires, the owner may apply for an extension for two consecutive terms of five years each, making the total duration of protection potentially 20 years from the filing date (Sections 35(2), 17A and Second Schedule, PA). In the application for extension, the applicant must first show that the UI is used commercially/industrially in Malaysia, or provide a satisfactory explanation of its non-use (Sections 35(3), 17A, Second Schedule, PA).

The duration of the patent or UI is also subject to payment of annual fees during the term of the patent or UI.

Provisional Rights

After an application is made available for public inspection, an applicant may issue a cease and desist letter to warn a person who has commercially/industrially worked the invention which is the subject matter of the application. After the grant of the patent/UI, the patent/UI owner may make a demand for compensation, in the sum of what they would have normally received for the working of the invention:

  • from the time the infringer is given the warning to the grant of the patent; or
  • in the absence of a warning, from the time the patent application in respect of the invention has been available for public inspection to the grant of the patent (Section 34, PA).

Exclusive Rights

A patent/UI owner enjoys exclusive rights to control the use of a patent/UI on the date a certificate of the grant of patent/UI is issued and the patent/UI is registered in the Register of Patents/UIs (Sections 36, 35, 32, 31, 17A & Second Schedule, PA).

The exclusive rights of a patent/UI owner, include:

  • the right to exploit the patented invention;
  • the right to assign or transmit the patent; and
  • the right to conclude licence contracts (Section 36(1) , Second Schedule, PA; SKB Shutters Manufacturing v Seng Kong Shutter Industries [2015] 9 CLJ 405).

These rights cannot be exercised by other persons without the owner’s consent (Section 36(2), PA).

“Exploitation” of a patented invention/UI means the following.

  • i) In respect of a product:
    1. making, importing, offering for sale, selling or using the product; or
    2. stocking the product for the purpose of offering for sale, selling or using.
  • ii) In respect of a process:
    1. using that process; or
    2. the act of exploiting a product patent mentioned in i) are equally applicable to a product which is obtained directly by means of the patented process (Section 36(3), PA).

The rights shall extend only to acts done for industrial/commercial purposes and not acts done only for scientific research (Section 37(1), PA).

“Exploitation” refers to commercial exploitation (Pentamaster Instrumentation v QAV Technologies [2017] 5 CLJ 736). An accredited laboratory, for example, which merely conducts tests of the machines and products of its customers, may not necessarily be “exploiting” the patented invention.

Right to Initiate Proceedings

Any infringement proceedings in court for direct/imminent infringement can be brought against the infringer from the date stipulated in the certificate of the grant of patent/UI Certificate (Section 59, PA).

Obligation to Pay Annual Fees

Exclusive rights granted to the owner of patent/UI are conditional upon the payment of annual fees (12 months before the date of expiration of the second and each succeeding year during the term of the patent/UI). The patent or UI Certificate shall lapse in the event of non-payment of the annual fees (Section 35, PA).

Due to the outbreak of Covid-19, certain fees are waived for eligible owners (Patents (Waiver of Fee) Regulations 2020).

Upon the expiry of a patent, it falls into the public domain and become free for all to use.

Third parties do not have the right to participate during grant proceedings. If they are aggrieved by the grant, they may initiate invalidation proceedings in Court (Section 56, PA).

The applicant is given three months to address/rectify any statutory non-compliance during preliminary examination.

At the substantive/modified substantive examination stage, if there is any office action raised, the applicant has two or three months to address the office action.

The applicant may appeal to the High Court, and subsequently to the Court of Appeal, as a final resort (Merck KGaA v Leno Marketing [2018] 6 CLJ 167).

An annual fee must be paid 12 months before the expiration of :

  • the second and each succeeding year (for a patent); and 
  • third and each succeeding year (for a UI),

during the term of the patent/UI (Sections 35(2), 17A, PA).

A six-month grace period for payment of the annual fee (after expiration) is allowed, subject to payment of a surcharge (Section 35A(2), PA).

If there is no payment after the expiry of this grace period, the patent/UI lapses and a notice will be gazetted.

Reinstatement

Reinstatement is possible provided that an application for it is made within two years from the date of the Gazette (Section 35A, PA).

The reinstatement is conditional on:

  • payment of all outstanding annual fees and the surcharge; and
  • the Registrar being satisfied that the non-payment was due to accident, mistake or other unforeseeable circumstances.

A reinstatement notice will be published in the Gazette.

Such reinstatement shall not prejudice the rights acquired by third parties after the Gazette notification that the patent had lapsed and before it was reinstated.

If a patent has lapsed, no act done from that date in relation to the invention can amount to an infringement, unless the patent is reinstated (Section 35A(6), PA).

A patent owner may apply to the Registrar to amend the description, claim(s) or drawings of the patent, or any other document associated with the patent, for the purpose of correcting a clerical error/obvious mistake (Section 79A(1), PA).

The Registrar shall not make an amendment, if:

  • it would have the effect of disclosing a matter which extends beyond that disclosure before the amendment (Section 79A(2), PA);
  • it would extend the protection conferred at the time of grant (Section 79A(2), PA); or
  • there are pending invalidation proceedings against a patent before any court (Section 79A(3), PA).

If the claims are declared partially invalid by the court, the court in Merck Sharp & Dohme Corp v Hovid Bhd [2019] 12 MLJ 66 departed from its earlier decision (SKB Shutters) in finding that the PA does not prohibit a patentee from applying to amend their claims to reflect their partially valid claim, but the amendments would not take effect until the Registrar has made the amendments after the final order of court, or in the event of an appeal, until the appeal is disposed of.

An amendment application may be made to the Registrar on Form 16A with the payment of the prescribed fee of MYR80 (Regulation 46A, PR). A fee is not required in respect of a request to correct a mistake/error in any document issued by the Patent Office, unless such mistake/error is caused, or contributed to, by the owner (Section 79A(4), PA).

Where a person performs any act under Section 36(3) of the PA in Malaysia in relation to a patented invention or process without the consent of a patent/UI owner (Section 58, PA), the owner may institute proceedings against the infringer at the High Court for direct infringement or on the basis of imminent infringement (Section 59, PA).

Invalidation Proceedings

Requirements

A third party (ie, an “aggrieved person”) may challenge the validity of a patent/UI through an invalidation proceeding (Sections 56, 17A, Second Schedule, PA).

An "aggrieved person" includes someone who:

  • is prejudiced by the wrongful entry; 
  • has a real practical interest in the issue, and is not a mere busy body; and
  • has a genuine grievance due to a registered patent.

Grounds of invalidation

There are five distinct statutory grounds of invalidation.

  • What is claimed as an invention in the patent is not an invention within the meaning of Section 12 or is excluded from protection under Section 13 or Subsection 31(1) or is not patentable because it does not comply with the requirements of Sections 11, 14, 15 and 16 of the PA – ie, the “invention”:
    1. is not an invention/innovation within the meaning of the PA;
    2. is excluded from protection under the PA;
    3. would be against public order or morality; or
    4. is not patentable due to non-compliance with the requirements of the PA.
  • The description(s)/claim(s) do not comply with the requirements of the PA.
  • Drawings, which are necessary for the understanding of the claimed invention, have not been furnished.
  • The right to the patent does not belong to the person to whom the patent was granted.
  • Incomplete/incorrect information has been deliberately provided (Section 56, PA; Emerico (supra); Ranbaxy (Malaysia) v E.I DU Pont Nemours [2012] 9 CLJ 79).

Based on the maxim of expressio unius est exclusion alterius, a third party will not have a legal basis to invalidate the patent/UI outside the scope of the five statutory grounds (Emerico (supra)).

Any invalidated patent, claim, or part thereof shall be regarded as null and void. The Registrar shall be notified and record the declaration in the Register and publish it in the Gazette (Section 57, PA).

In SKB Shutters, the Federal Court held that if an independent claim is invalidated, all the other claims fall. Recently, the Federal Court, in Merck Sharp (supra), by a majority, departed from the legal position expounded in SKB Shutters. See 1.10 Post-grant Proceedings Available to Owners of Intellectual Property Rights.

Declaration of Non-infringement

Requirements

Third parties (“interested persons”) may institute proceedings against a patent/UI owner to declare that the performance of a specific act does not constitute an infringement (Section 62, PA).

“Interested person” includes any person whose commercial interest in the exploitation of a particular patent or invention is adversely affected (Billion Prima v Nuctech Company [2019] 1 LNS 1006).

Such proceeding may be instituted together with invalidation proceedings, unless the invalidation proceedings formed part of an infringement proceeding (Heveaform Asia (supra)). 

Onus

The applicant shall prove that the act in question does not amount to an infringement (Section 62, PA; Billion Prima (supra)).

The High Court has jurisdiction to hear patent-related matters. An appeal against the decision of the High Court may be made to the Court of Appeal.

Litigants may appeal to the Federal Court with leave. An appeal shall lie from the Court of Appeal to the Federal Court if the judgment/order of the Court of Appeal is in respect of any matter decided by the High Court in the exercise of its original jurisdiction involving:

  • question(s) of general principle decided for the first time; or
  • question(s) of importance upon which a decision by the Federal Court would be to public advantage.

Disputes concerning patents/UIs are dealt with by the High Court, and subsequently the Court of Appeal and the Federal Court (the apex court in Malaysia) on appeal.

There is one specialised High Court in Kuala Lumpur, which is specialised to hear all intellectual property disputes.

A patent/UI owner may issue a formal demand against the infringer to cease their infringing act. It is not a prerequisite to issue such a demand or engage in any mediation prior to filing a lawsuit.

See 1.5 Rights and Obligations of Owners of Intellectual Property Rights.

Parties may initiate proceedings in court through solicitors or in person under the Rules of Court 2012 (RC), except in the following cases where legal representation is required.

  • A body corporate or company must be represented by solicitors.
  • A person lacking capacity (a minor or someone suffering from mental illness or declared to be mentally disordered under the Mental Health Act 2001).
  • A person under a disability (ie, a minor). 

Interlocutory injunctions may be granted by the High Court where the applicant successfully establishes that:

  • there is a bona fide serious issue to be tried;
  • the balance of convenience tilts in favour of the grant of the interlocutory injunction; and
  • damages would not be an adequate remedy in the event that the plaintiff succeeded at trial (Keet Gerald Francis Noel John v Mohd Noor bin Abdullah [1995] 1 MLJ 193).

The Court may also consider the following factors.

  • Where the justice of the case lies.
  • The practical realities of the case.
  • The plaintiff's ability to meet its undertaking in damages should the suit fail; the court may require the plaintiff to provide an undertaking (eg, a bank guarantee).
  • Whether there is any delay.
  • Public interest.

Where the injustice to the plaintiff is plainly manifest, the judge may dispense with the usual undertaking as to damages (Cheng Hang Guan v Perumahan Farlim (Penang) [1988] 3 MLJ 90).

Ex Parte Interim Injunction Order

The plaintiff may also seek other forms of relief – such as Anton Piller orders, or ex parte interlocutory injunctions – prior to service of the papers on the infringer. In the event the court grants an ex parte interim injunction order, that order shall automatically lapse 21 days from the date of the order unless earlier revoked or set aside (Order 29, rule 1 (2B), RC). An ex parte order must be served within seven days of the date of the order and the court, when granting the order, must fix a date to hear the application inter partes within 14 days from the date of the order (Order 29, rule 1 (2C), RC).

The affidavit in support of an ex parte application must contain a clear and concise statement of:

  • facts giving rise to the claim;
  • facts giving rise to the application for the interim injunction;
  • facts to justify the application ex parte, including details of any notice given to the other party or the reason for not giving notice;
  • any answer by the other party (or which is likely to be asserted) to the claim or application;
  • any facts which may lead the court not to grant the application;
  • any similar application or order made earlier; and
  • the precise relief sought (Order 29, rule 1 (2A), RC).

Furthermore, it is important that the plaintiff in an ex parte injunction application provides full and frank disclosure, failing which the ex parte order may be set aside (Pentamaster Instrumentation (supra)).

A potential opponent may file an action for declaration of non-infringement of a patent (Section 62, PA). 

If the alleged infringing act is already the subject of infringement proceedings, the defendant in the infringement proceedings may not institute proceedings for non-infringement.

See 2.2 Third-Party Remedies to Remove the Effects of Intellectual Property Rights.

Infringement proceedings cannot be instituted:

  • for a patent, more than five years from the act of infringement; and
  • for a UI, more than two years from the act of infringement (Section 59(3), 17A, Second Schedule, PA).

Limitation periods must be specifically pleaded as a defence (Tan Yock Kuan v Cew Sin Plastics Pipe [2019] 1 LNS 681).

Discovery

Discovery applications are typically made at the High Court after the close of pleadings but before the start of trial (Order 24, RC).

There are three stages, namely:

  • disclosure of a list of documents;
  • copies of documents are inspected and taken; and
  • production of the documents.

When the court orders it, a party may be required to disclose documents which support or adversely affect their own or another party’s case.

Requirements for discovery include that:

  • the list of prospective documents to be disclosed must be succinct;
  • each relevant document must be identified;
  • where a document is privileged, it must be described as such, along with a justification; and
  • the list is to be accompanied by an affidavit to verify its contents.

Interlocutory Remedies

Pre-action orders for discovery against a person or Norwich Pharmacal orders may be given if there are sufficient grounds for doing so. The application must provide details of the intended proceeding and whether the person against whom the order is sought is likely to be party to subsequent proceedings in court (Order 24, rule 7A, RC).

Pre-action discovery is for obtaining relevant information to support a claim against a potential defendant who is already identified.       

A Norwich Pharmacal order is for obtaining relevant information to identify a potential defendant.

For an Anton Piller order, the plaintiff must establish, among other things:

  • an extremely strong prima facie case that the patent has been infringed;
  • that the defendant has incriminating documents; and
  • that there is a real possibility that they may be destroyed.

A lawsuit is initiated by filing a writ and a statement of claim, or originating summons, whichever is appropriate, in which the defendant is informed of the plaintiff’s claim, the material facts, and the relief claimed. The remedy or relief being sought must be specifically prayed for. The plaintiff does not plead law or evidence in the statement of claim.

Statement of Claim

In brief, every statement of claim must contain:

  • the particulars of the parties (Order 18, rule 6(4), RC);
  • brief summary of the material facts (not evidence) (Order 18, rule 7 (1), RC);
  • the effect of any document/conversation referred to in the pleading (if material) (Order 18, rule 7 (2), RC); and
  • the relief or remedy which the plaintiff claims (Order 18, rule 15(1), RC).

A party shall specifically plead, if applicable, the following.

  • Any matter – eg, performance, release, any relevant statute of limitation, fraud or any fact showing illegality:
    1. which makes any claim or defence of the opposite party not maintainable;
    2. which, if not specifically pleaded, might take the opposite party by surprise; or
    3. which raises issues of fact not arising out of the preceding pleading (Order 18, rule 8, RC).
  • The necessary particulars of any claim, defence or other matter pleaded including:
    1. misrepresentation, fraud, breach of trust, wilful default or undue influence; and
    2. any condition of the mind of any person – whether any disorder or disability of mind or any malice, fraudulent intention or other condition of mind except knowledge (Order 18, rule 12(1), RC).

Amendment of Pleadings

Amendments can be made at any stage of the proceedings; however, they should be made as early as possible to avoid injustice to the other party. Amendments may be made without leave of court before the pleadings are deemed to be closed (Order 20, rule 3(1), RC.) After the close of pleadings, amendments may be made with leave of court provided that:

  • the application is bona fide;
  • there is no prejudice caused to the other side which cannot be compensated by costs; and
  • the amendments would not, in effect, turn the suit from one character into a suit of another inconsistent character (Yamaha Motor Co Ltd v Yamaha (M) [1983] 1 MLJ 213).

A representative action for patent proceedings is possible, provided that:

  • the plaintiff and those represented by them must be members of a class with a common interest;
  • they must have a common grievance; and
  • the nature of relief sought must be beneficial to all (Duke of Bedford v Ellis [1901] AC 1).

After action is initiated, the other party may apply to strike out the claim on the grounds that it:

  • discloses no reasonable cause of action;
  • is scandalous, frivolous or vexatious;
  • may prejudice, embarrass or delay the fair trial of the action; or
  • is otherwise an abuse of the process of the court (Order 18, rule 19, RC).

Courts may also strike out a claim when the claim is for some purpose other than obtaining the genuine redress which the process offers (Malaysia Building Society v Tan Sri General Ungku Nazaruddin Ungku Mohamed [1998] 2 CLJ 340).

It is only in plain and obvious cases that recourse should be had to the summary process, and this summary procedure can only be adopted when it can be clearly seen that a claim is "obviously unsustainable". So long as the pleadings disclose some course of action or raise some question fit to be decided by the judge, the mere fact that the case is weak and not likely to succeed at the trial is not ground for the pleadings to be struck out (Bandar Builder v United Malayan Banking Corporation Bhd [1993] 4 CLJ 7).

A patent/UI owner and the alleged infringer are the necessary parties to an action (Section 59(1), 17A, Second Schedule, PA).

A licensee may request that the owner of the patent institute court proceedings for infringement. If the owner refuse to initiate the proceedings within three months from the request, the licensee may institute the proceedings in its own name. The High Court may grant an appropriate injunction to prevent infringement or to prohibit its continuation to avoid substantial damage (Section 61, PA).

If the owner of a patent/UI has already initiated an infringement action, the licensee may not bring another additional action against the infringer (Tan Yock Kuan (supra); Premier Products v Zamrud Fibre Industries [1994] 4 CLJ 1043; Fukuyama Automation v Xin Xin Engineering [2015] 9 MLJ 823; Kingtime International v Petrofac E & C [2018] 1 LNS 1681).

A "mere busybody” may not bring an action for infringement.

Direct infringement is the exploitation of a patented invention/UI under Section 36(3) of the PA in Malaysia by any person other than the owner without the owner’s consent (Section 58, PA). The knowledge of the infringer that they are infringing a patent is irrelevant.

The PA recognises imminent infringement (Section 59(2), PA), but not indirect infringement. However, subject to the facts of each case, indirect or contributory infringement may fall within the ambit of imminent infringement. For example, a supplier of an essential element/component of an invention, knowing that it will be used by the recipient to commit an act of direct infringement, may have contributed to that infringement. The person may arguably be liable for imminent infringement. Mere supplying, or offering to supply, an essential element of the invention may not suffice.

Remedies

If the owner proves that an infringement has been committed, the court may :

  • award damages;
  • grant an injunction to prevent further infringement; and
  • grant any other legal remedy (Section 60, PA).

If an imminent infringement is proven, the court may grant an injunction and any other legal remedy. 

See 1.5 Rights and Obligations of Owners of Intellectual Property Rights.

The PA does not distinguish between the infringement of a product patent and a process patent. The performance of any acts in Section 36(3) by any person other than the owner in Malaysia without the owner’s consent constitute an infringement (Section 58, PA).

See 1.5 Rights and Obligations of Owners of Intellectual Property Rights and 2.1 Actions Available against Infringement for Owners of Technical Property Rights.

The monopoly conferred by patent/UI is only confined to the claim(s) (Sanofi-Aventis (M) Sdn Bhd & Anor v Fresenius Kabi (M) Sdn Bhd & Anor [2011] 1 LNS 1670; Spind Malaysia Sdn Bhd v Justrade Marketing Sdn Bhd & Anor [2018] 4 CLJ 705). The scope of protection for a patent/UI is determined by its claims. Claims are to be construed as part of the whole specification and not viewed independently. A claim is, however, also to be construed by its ordinary meaning, rather than expanded by extracting the body of the specification to construe the meaning of the claims.

Infringement is the performance of any act in Section 36(3) of the PA in Malaysia by a person other than the owner of the patent, without the owner’s agreement, in relation to a product or process falling within the scope or protection of the patent/UI (Section 58, PA; SKB Shutters (supra)). In assessing inventiveness, it must be determined "whether the patent has disclosed something sufficiently inventive to deserve the grant of a monopoly" (SKB Shutters (supra); Spind Malaysia (supra)).

Malaysian courts have adopted different tests in construing claims, the “pith-and-marrow” construction, which assesses infringement by virtue of whether all the essential integers have been taken by the alleged infringer, and the purposive construction, which places more importance on the intention behind the wording of a claim than on its literal meaning.

If the wordings are clear, the court cannot go beyond what is already on the face of the claim (B Braun Melsungen AG v Terumo Kabushiki Kaisha [2011] 1 LNS 947.)

The application of purposive construction developed in Catnic v Hill & Smith [1982] R.P.C 6 is seen in Malaysian cases. 

Improver Corpn v Remington Consumer

In Cadware (supra), the Court of Appeal adopted the test for patent infringement as laid out in the UK case of Improver Corpn v Remington Consumer Products Ltd [1990] FSR 181 as follows.

Does the variant have a material effect on the way the invention works? If yes, there is no infringement.

If not, then the court should consider whether the immaterial variant would have been obvious at the date of publication of the patent to a reader skilled in the art If not, there is no infringement.

If it would, then the court should consider whether the reader skilled in the art would nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention. If they would, there is no infringement. If not, infringement will be established.

Actavis UK Ltd v Eli Lilly

The English case of Actavis UK Ltd v Eli Lilly [2018] 1 All ER 171 aimed to further reformulate the Improver questions. The new approach requires a two-stage test.

The first stage involves normal interpretation. Does the variant infringe any of the claims as a matter of normal interpretation; and, if not, does the variant nonetheless infringe because it varies from the invention in a way or ways which is or are immaterial?

If the answer to either issue is yes, there is an infringement.

The second stage looks at whether an alleged infringement which does not fall within the scope of the claims under the first stage still infringes as an “equivalent”.

  • Does the variant achieve substantially the same result in substantially the same way as the invention (ie, the inventive concept revealed by the patent)?
  • Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?
  • Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claim(s) of the patent was an essential requirement of the invention?

In order to establish infringement in a case where there is no literal infringement, a patentee would have to establish that the answer to the first two questions was yes and that the answer to the third question was no.

Malaysia has adopted both the tests of Improver Corpn and Actavis UK Ltd.

Merck Sharp (supra) overruled the earlier decision of SKB Shutters (supra), insofar as a dependent claim is no longer invalid merely on the finding that the claim that it is dependent upon is held to be invalid. Instead, the court is required to assess each claim individually.

The following are the major defences against infringement.

  • Acts done for scientific research, non-industrial and non-commercial purposes (Section 37(1), PA).
  • Bolar exemption – a patentee cannot control acts done to make, use, offer to sell or sell a patented invention solely for uses reasonably related to the development and submission of information to the authority that regulates the manufacture, use or sale of drugs (Section 37(1A), PA).
  • Exhaustion of right doctrine – a patentee/authorised third party that has placed patented products into circulation for the first time in the marketplace cannot thereafter utilise their exclusive rights to control subsequent dealings with the products (Section 37(2)(i) & (iii), PA).
  • The infringing act has been committed with the conditional/unconditional consent of the owner/licensee (Section 43, PA).
  • Parallel importation (Section 58A, PA).
  • Use of the patented invention on any foreign vessel, aircraft, spacecraft or land vehicle temporarily in Malaysia (Section 37(3), PA).
  • Patent has lapsed and has not been reinstated (Section 35A(6), PA).
  • Act done pursuant to a compulsory licence (Section 37(5), PA).
  • Exploitation is by the Malaysian government or any person so authorised by the Malaysian government.
  • Person has used the patented product or process in good faith (Section 38, PA).
  • Implied licence – a purchaser of a patented article has an implied licence to repair it as long as the repair does not amount to the making of a new article.
  • Limitation period (Section 59(3), PA).

A court may appoint experts to inquire and report upon any question of fact or opinion not involving questions of law or of construction (Order 40, rule 1, RC). An expert is a person who has such knowledge or experience that their opinion would be admissible in evidence in relation to a certain question. Where a court expert is appointed, any party may call one expert witness to give evidence on the question reported on by the court expert (Order 40, rule 6, RC).

The assistance of expert evidence is "almost invariably" required to reach findings of fact on obviousness. However, while expert opinion is admissible on the ultimate question of fact, the court is not bound to follow it.

In Spind Malaysia (supra), the Federal Court held that “…[T]he court may construe patent claims without the assistance of an expert who approximates the hypothetical person skilled in the art, all his attributes and dispositions…”

The function of the expert is “to educate the Court … they come as teachers, as makers of the mantle for the court to don”. The experts educate the court on technology, technical terms and common general knowledge. The expert witness gives evidence as to the nature of the skilled addressee, the common general knowledge which they would possess and the way in which a skilled person would approach problems (SKB Shutters (supra); See Hau Global v Mah Sing Plastics Industries [2018] 1 MLJ 213).

An expert witness should provide independent assistance to the court by way of objective unbiased opinion in relation to matters within their expertise. As an independent aid to the court, it is therefore essential that an expert witness must possess and retain a standard of absolute personal integrity:

Experts must express only opinions which they genuinely hold and which are not biased in favour of one particular party. Opinions can, of course, differ and indeed quite frequently experts who have expressed their objective and honest opinion will differ, but such differences are usually within a legitimate area of disagreement.

The evidence of an expert should not only be independent but should also be seen to be independent.

An expert should be uninfluenced as to form or to content by the exigencies of litigation.

An expert may be called by the court in construing a patent claim in areas in which the court lacks knowledge.

The PA does not provide for revocation or cancellation of a patent in Malaysia. A party may commence invalidation proceedings against a patent/UI.

See 2.2 Third-Party Remedies to Remove the Effects of Intellectual Property Rights.

Defendant in an infringement proceeding may file an invalidation proceeding (Section 60(3), PA). However, the court will usually deal with infringement issues before dealing with an invalidation claim.

See 1.10 Post-grant Proceedings Available to Owners of Intellectual Property Rights, 3.4 Scope of Protection for an Intellectual Property Right and 4.1 Reasons and Remedies for Patent Revocation/Cancellation

See 1.10 Post-grant Proceedings Available to Owners of Intellectual Property Rights, 3.4 Scope of Protection for an Intellectual Property Right and 4.1 Reasons and Remedies for Patent Revocation/Cancellation.

See 4.1 Reasons and Remedies for Patent Revocation/Cancellation.

Evidential rules and civil procedures for civil actions apply to intellectual property rights actions.

It is worth noting that the PA specifies different limitation periods for infringement proceedings.

Proceedings may not be instituted:

  • for patent infringement, more than five years from the act of infringement; and
  • for UI infringement, more than two years from the act of infringement (Section 59(3), PA).

The jury system in Malaysia was abolished in 1995. There are specialised Intellectual Property High Courts in some states.

Parties do not exert any influence over who the decision-maker in an intellectual property dispute is.

A defendant can make an offer to settle the matter at any time, after the commencement of action and before the court disposes of the matter (Order 22B, RC).

In recent times, parties may submit an agreement to mediate, the mediation form and a summary of their respective cases to the mediation centre or directly to the mediator.

In the Kuala Lumpur Court Complex, there is a mediation centre which is tasked with processing mediation requests and appoints mediators to cases. The mediator is typically another High Court Judge, not presiding over the matter.

A party may apply for a stay of proceedings, in which the party must show special circumstances to be granted such a stay.

Remedies for the patentee include special damages, general damages, injunctions, account of profits, costs (partial), exemplary damages, statutory damages, declaration and orders for delivery up (if applicable).

Injunctive relief and other legal remedies may also be granted to the patentee.

See 3.2 Direct and Indirect Patent Infringement.

A prevailing defendant may be awarded costs. There are no fixed costs, they depend on the type and manner of enforcement. Costs are generally awarded to the winning party, but this is at the discretion of the court.

A defendant in any action may apply for security of costs. This would be at the discretion of the court.

See 3.2 Direct and Indirect Patent Infringement.

Stay of Execution

The infringer may apply for a stay of execution, in which the infringer must establish special circumstances, or that the appeal would be rendered nugatory in the event a stay of execution is not granted.

Erinford Injunction

An Erinford injunction is an interim injunction sought to preserve the status quo pending the determination of an appeal so that the appeal will not be rendered nugatory. In the event the court dismisses an application for injunction, the claimant may seek for an Erinford injunction – ie, a limited injunction to preserve the status quo pending an appeal (Philip Morris Brands Sarl v Goodness for Import and Export & Ors (No 2) [2013] 9 MLJ 484).

Appellate procedure for patent proceedings is the same as in all appellate civil disputes.

Appeals to the Court of Appeal involve a rehearing of the case, which involves a review of both facts and law. Leave of court is required for appeals to the Federal Court, and the appeal is limited to a review of the law involved in the case.

Costs that typically arise before filing a lawsuit includes a "getting-up fee", in which whether the advocate and solicitor have acted reasonably and properly in getting up their client’s case in preparation for the trial is taken into account. In this case, work done before action is initiated may be considered.

Costs may be dealt with at any stage of proceedings or after the conclusion of proceedings; any costs ordered shall be paid at the conclusion of proceedings unless the court otherwise orders (Order 59, rule 7, RC).

Costs Assessment

In assessing the costs payable in relation to any item, the court will take into account:

  • the complexity of the cause or matter, and the difficulty or novelty of the questions involved;
  • the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor or counsel;
  • the number and importance of the documents prepared or perused;
  • the place and circumstances in which the business involved is transacted;
  • the importance of the cause or matter to the client;
  • where money or property is involved, its amount or value; and
  • any other fees and allowances payable in respect of other items in the same cause or matter, where work done in relation to those items has reduced the work which would otherwise have been necessary (Order 59, rule 16, RC).

At the conclusion of the proceedings, the court will hear submissions from the parties as to the quantum of costs to be awarded and shall order such costs as it deems fit. The court shall direct that the submissions of the parties on costs are to be tendered as part of the substantive submission of the case or separately and there shall be annexed to the submission of costs a bill for such costs, which may include particulars of the following:

  • work done including the value of getting up; and
  • all disbursements reasonably incurred (Order 59, rule 7(2), RC).

Court Discretion

The court, in exercising its discretion as to costs shall, to such extent as may be appropriate, take into account:

  • any offer of contribution or offer of settlement under Order 22B;
  • the conduct of all parties, including conduct before and during proceedings;
  • the conduct of parties in relation to any attempt at resolving the matter by mediation or any other means of dispute resolution; and
  • in particular, the extent to which parties have followed any relevant pre-action protocol or practice direction issued by the Registrar (Order 59, rule 8, RC).

In addition, where a party has failed to establish any claim or issue which they have raised in proceedings, thereby unnecessarily or unreasonably protracting or adding to the costs or complexity of proceedings, the court may order that the costs of that party shall not be allowed in whole or in part, or that any costs occasioned by that claim or issue to any other party shall be paid by them to that other party, regardless of the outcome of the cause or matter (Order 59, rule 10, RC).

The fees for more than one counsel for one party or set of defendants shall not be allowed unless the court so certifies. Such fees may be allowed notwithstanding that both counsels are members of the same firm of solicitors (Order 59, rule 14(2), RC).

The court may, in appropriate cases, award costs on an indemnity basis. All costs shall be allowed except insofar as they are unreasonable. Any doubts which the court may have as to the reasonableness of costs shall be resolved in favour of the receiving party (Order 59, rule 16(4), RC).

Generally, the losing party must pay costs to the winning party, but the costs are awarded at the court's discretion.

Alternative dispute resolution is available to resolve patent cases, including negotiation, mediation, and arbitration (subject to a valid arbitration agreement between the disputing parties).

A patentee can transfer their rights/title/interest in a patent or patent application to an assignee. This may also occur upon the patentee’s death, at which point the rights/title/interest in the patent are transferred to the patentee’s personal representative. Not all rights in a patent can be assigned. For instance, the right to make the patented invention cannot be assigned.

The assignment is valid even without registration, but an assignment will have no effect against third parties, unless it is recorded in the Register (Section 39(4), PA). Any subsequent transaction in regard to a patent application or a recorded patent obtains priority over any previous non-recorded transactions. Therefore, a recordal of assignment is a mechanism to eliminate potential fraudulent dealings involving patents.

For the purposes of a recordal of assignment, the assignment must be in writing.

Pursuant to Regulation 34 of the PR:

  • an application to record an assignment is to be made to the Registrar in Form 6 together with the payment of the prescribed fee;
  • the application is to be signed by or on behalf of the parties to the transfer; and
  • the application is to be accompanied by documents including the assignment in writing signed by both parties, proving to the satisfaction of the Registrar the change of ownership.

The Registrar will record the assignment in the Register and the change in ownership will be published in the Gazette.

Voluntary Licences

A licence contract enables the licensor to grant to the licensee (a person or an enterprise) a licence to do any or all the acts amounting to exploitation of the patented invention. A licence contract can include certain rights under the patent or all the rights of a patent (Section 41(1), PA).

A licence contract must be in writing and signed by or on behalf of the contracting parties (Section 41(2), PA). In the case of joint ownership, a licence contract can only be concluded by all joint owners separately, if there is no agreement between the joint owners (Section 40, PA).

A licensor may grant an exclusive or non-exclusive licence (Section 44, PA). 

  • The former gives the licensee the right to exploit the patented invention, but this right is not afforded to anyone else including the patentee (Section 44(2), PA).
  • In the case of the latter, the licensor may grant a further licence to a third person regarding the same patent (Section 44(1), PA), and the licensor has the right to exploit the patented invention themselves.

Compulsory Licences

This enables third parties to exploit the patent. UIs are not subject to compulsory licences.

A compulsory licence is defined as the authorisation to perform in Malaysia, without the agreement of the owner of the patent, any or all of the acts amounting to an exploitation of the patented invention.

Compulsory licences can only be applied for after the expiration of three years from the grant of a patent or four years from the filing date of the patent application, whichever is the later (Section 49(1), PA).

The applicant must show that:

  • there is no production of the patented product or application of the patented process in Malaysia without any legitimate reason; and/or
  • there is no product produced in Malaysia under the patent for sale in any domestic market, or there are some, but they are sold at unreasonably high prices or do not meet the public demand without any legitimate reason.

Compulsory licences shall not be applied for unless the person making the application has made unsuccessful efforts to obtain authorisation from the owner of the patent on reasonable commercial terms and conditions (Section 49(2), PA).

The applicant must set forth the amount of royalty, the conditions of the exploitation of the patent and the restrictions of the rights of the licensor or licensee, and a request for the said licence (Section 50(1), PA).

Compulsory licences may be granted based on the interdependence of patents, to avoid infringement of the earlier of the two patents (Section 49A, PA). The applicant (an owner of a later patent or a licensee of a licence contract under the later patent) must show:

  • that the invention claimed in the later patent cannot be worked in Malaysia without infringing a patent granted on the basis of an application benefiting from an earlier patent; and
  • that the invention claimed in the later patent constitutes, in the IPCM’s opinion, an important technical advance of considerable economic significance in relation to the invention claimed in the earlier patent.

Voluntary Licence

The recordal of a licence is not necessary, but the patentee may apply to the Registrar for an entry to be made in the Register to the effect that any person may obtain a licence (Section 42(1), PA). This allows any person interested in becoming a licensee to apply through the Registrar for a licence (Section 42(2), PA).

The Registrar shall then record a licence.

Such application shall be made on Form 7 together with the payment of a prescribed fee (Regulation 35, PR). The request to record particulars of a licence contract shall be made to the Registrar on Form 9 together with the payment of prescribed fee (Regulation 36, PR).

Where a licence contract has expired/terminated/invalidated, parties must request that the Registrar have this fact recorded in the Register (Section 47, PA). Such request shall be in Form 10 together with the payment of a prescribed fee (Regulation 37, PR).

Compulsory Licence

A compulsory licence allows third parties other than the patentee to exploit the patent in several situations. There are three types of compulsory licence.

  • Compulsory licences which are granted due to the action/inaction of a patent owner that is against public interest.
  • Compulsory licences which are granted due to the interdependence of patents.
  • Compulsory use of the patent by the government.

An application for a compulsory licence shall be made in Form 11 together with the payment of prescribed fee (Regulation 38, PR).

Registration

The Registrar shall, within three months from the date of the application, examine whether the requirements under Section 50(1) of the PA and Regulation 38 of the PR are satisfied, and if so, the Registrar will send a copy of the application to the licensor and licensee and invite the parties to make any observations (Regulation 39(1), PR).

The Registrar shall notify the applicant, the licensor or the licensee of the date the application shall be considered by the IPCM not later than three months before the date set for the Board to consider the application (Regulation 39(2), PR).

The Registrar shall notify in writing any party required to appear before the Board to give a statement or any documents not later than one month before the date set for the appearance (Regulation 40(1), PR).

Within one month from the date the Board makes its decision, the Registrar shall notify the applicant, the licensor or the licensee of the decision and shall record the decision in the Register (Regulation 40(2), PR).

Gan Partnership

D-32-02, Menara SUEZCAP 1
KL Gateway
2 Jalan Kerinchi
59200 Kuala Lumpur
Malaysia

+603 7931 7060

+603 7931 8063

bahari@ganlaw.my www.ganlaw.my
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Law and Practice

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Gan Partnership is a leading law firm specialising in dispute resolution, alternative dispute resolution and IP. Led by a team of advocates with more than 20 years’ experience, this internationally recognised firm provides clients with an arsenal, ranging from senior counsel with over 25 years’ experience to aggressive junior and modern litigators. Following the recent addition of two partners with over three decades of experience between them, the firm has grown from strength to strength and aims to expand even further. The IP team is known for litigation and enforcement, registration and prosecution, commercialisation, strategy and branding, franchising and licensing, privacy and data protection, confidential information, entertainment, gaming, advertising and media, technology and telecommunications.

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