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The Trade Descriptions Act 1972 has been repealed and replaced by the Trade Descriptions Act
2011, new Act having come into effect since 1st November 2011. Its purpose is to promote good
trade practices by prohibiting false trade descriptions and false or misleading statements,
conduct and practices in relation to the supply of goods and services.
Some salient changes of the new Act include:
Section 9(1) Trade Description Orders (TDO)1 are now reserved for owners of
registered trademarks, in contrast to the 1972 Act where common law owners are also
eligible. Such a limitation may not be popular but it will encourage registration of trade
marks.
Section 9(2) A TDO is now valid for a mere one year which was valid for five years
earlier, unless renewed by the High Court on such terms and for such further period as
the Court may decide. This is more administratively burdensome but renewal would not
be withheld unreasonably.
Section 20 It is now a punishable offence to make false or misleading statement in
relation to contests and games. This would hopefully curb sham scratch & win games
of chance, with false promises of prizes that abound in Malaysia.
Section 23 Personal or domestic use is now a defense to a person charged under the
Act. However, a body corporate is not entitled to rely on such defense.
Section 44 It is an offence to disclose information that is likely to prejudice an
investigation under the Act. Some defenses have been provided under this new tippingoff provision.
Sections 53 & 66 These new sections allow admissibility of evidence obtained by
agent provocateur (abetting the commission of an offence for the sole purpose of
securing evidence) and rewarding whistleblowers with part (not more than 50%) of the
fine imposed upon securing a conviction. This is to encourage the publics participation;
in an Act that is ultimately meant to protect the same public.
Section 28 & 29 -The Domestic Trade, Cooperative and Consumerism Minister is
empowered to assign any expression or description used for goods or services and to
appoint exclusive awarding bodies of such expression and description.
The TRIPS Agreement further lays down that all parties should have measures taken at the
border for the suspension of counterfeit and pirated goods by the customs authorities, also
known as "Border Measures". Border Measures are to prevent the counterfeit and pirated
goods from being released into the domestic market, thus causing more damage and losses for
IP rights holders. Criminal procedures and penalties sufficient to act as a deterrent should also
be imposed.
As a result, IP legislations in member countries have been amended to adopt the provisions of
the TRIPS Agreement. In 2000, an amendment was made to the Malaysian Trade Marks Act
1972 vide the Trade Marks (Amendment) Act 2000. The provisions found under Part XIVA of
the Act provide for the intervention by the customs authorities in the enforcement of the trade
mark rights by its owners. They came into force on 1 August 2001 and denote the introduction of
Border Measures in Malaysia.
Pursuant to these provisions, customs authorities are empowered to prohibit any person from
importing counterfeit trade mark goods into Malaysia (under the new Section 70C to 70P of
the Act). This allows the customs authorities to seize goods suspected to bear infringing trade
marks at the point of entry into Malaysia and provides for the conditions and procedures to be
met.
Firstly, it must be noted that only the proprietor of a registered trade mark can invoke these
provisions.
Secondly, the goods involved must be "counterfeit trade mark goods". Under section 70C of the
Act, "counterfeit trade mark goods" has been defined to mean any goods including packaging
bearing marks which are identical, so nearly resembling or marks which cannot be distinguished
in its essential aspects from the registered trade mark; and which infringes the right of the
proprietor of the trade mark.
The procedures laid down in the Act are as follows (sec 70D sec 70P)
Application
The trade mark owner or his agent may submit an application to the Registrar of Trade Marks
stating that:
the counterfeit trade mark goods are expected to be imported at a specified time and
place; and
such a notice. In essence, this amounts to destruction of evidence before legal suit can be
instituted against the importer and/or the manufacturer of the seized goods.
Release of Goods
Upon expiration of the retention period or extended period, the Registrar shall release the
seized goods to the importer if the applicant has not:
Compensation must be paid to the importer if an action is not taken within the period or no
notice was given.
If an infringement action has commenced but the trade mark owner has not obtained an
interlocutory injunction from the court to prevent the release of such goods within 30 days from
the date of commencement, the Registrar shall also release the goods back to the importer.
S.31 of the Customs Act 1967 prohibits the import and export of prohibited goods. Yet,
counterfeit goods are not specifically defined as prohibited goods within the definition of the
Act. Likewise, the Customs (Prohibition of Imports) Order 1998 also does not define counterfeit
goods as one of the specified goods. There is no provision placing an obligation upon Customs
Officials to independently investigate, seize or detain consignment of suspected counterfeit
goods.
Nevertheless, there are residual powers granted to the Customs where the Customs may, on it
own initiative take ex-officio action to detain or suspend the release of goods which, based on
prima facie evidence, are counterfeit. Section 70(O) of the Trade Marks Act provides Ex-Officio
powers to the Royal Malaysian Customs (CUSTOMS) wherein any authorized officer may detain
or suspend the release of goods which, based on prima facie evidence that he has acquired are
counterfeit goods. However, there are no regulations on how CUSTOMS are to effect and action
this provision. In fact, CUSTOMS are usually not fully equipped and trained on IPR issues and
hesitate to detain goods without full cooperation and training from the brand owner.