Patent law development in Malaysia

    By Charmayne Ong and Kuek Pei Yee, Skrine
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    Patent legislation across Asian jurisdictions is constantly catching up with the pandemic’s demands, with stronger protection, foreign filing and higher compensation being common themes. However, the gaps persist, and businesses need to fathom the domestic barriers to stay ahead.

     

    The covid-19 pandemic affecting the world’s population has demonstrated the importance of advancements in medical technology and securing patent protection in countries of interest. The ongoing debate concerning the waiver of the enforcement of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement in 1994 for all IP related to the prevention, containment and treatment of covid-19 has brought up the age-old question of striking a balance between greater public access with the aim of global vaccinations and the rights of the patentee.

    Charmayne-Ong-Partner-at-Skrine-in-Kuala-Lumpur
    Charmayne Ong
    Partner at Skrine in Kuala Lumpur
    Tel: +603 2081 3999 (ext. 736)
    Email: co@skrine.com

    Due to the territorial nature of patent protection, substantial emphasis is placed on registering patents in all countries of interest. In times of a resource crunch, patentees must be strategic about how funds are utilised. Malaysia, a developing nation that is a signatory to major international IP treaties, has patent laws and procedures that reflect the trends in the global patent sphere. It is worthwhile to note that the system in place, either through the Malaysian Patents Act, 1983, or the various international treaties and agreements, supports expedited examination and unhampered enforcement even during times of a pandemic.

    Malaysia’s patent system

    As a signatory to the Patent Co-operation Treaty (PCT), Malaysia benefits applicants that seek international patent protection by providing a unified procedure for patent applications across its contracting states. Patentees are thus able to seek patent protection in other member countries simultaneously. Malaysia is a participant in the Asean Patent Examination Co-operation (Aspec), the first regional patent work-sharing programme among nine states’ IP offices including Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. This programme is aimed at reducing duplication of work that needs to be carried out by each participating patent office by sharing search and examination results between them. The participating patent offices gain by saving valuable time and resources, while patentees benefit from faster and more efficient patent prosecutions.

    Kuek-Pei-Yee-Partner-at-Skrine-in-Kuala-Lumpur
    Kuek Pei Yee
    Partner at Skrine in Kuala Lumpur
    Tel: +603 2081 3999 (ext. 853)
    Email: kpy@skrine.com

    Malaysia has also expedited patent examination procedures under the Patents Act, pursuant to the Patents (Amendment) Regulations, 2011. A patent applicant who has made a request for substantive examination may request the approval of expedited examination once the application has been made available for public inspection. This was introduced to reduce patent pendency by expediting and accelerating the allowance, issuance and grant of a patent.

    The Intellectual Property Corporation of Malaysia (MyIPO), the patent office responsible for the provision of IP registration services and administration of IP registries, currently has patent prosecution highway (PPH) agreements with four foreign patent offices – the Japan Patent Office (JPO) since 2014, the European Patent Office (EPO) since 2017, the China National Intellectual Property Administration (CNIPA) since 2018 and, most recently, with the Korean Intellectual Property Office (KIPO) since 2020.

    Under the PPH, a patent applicant may request accelerated examination by the MyIPO based on favourable examination results of a corresponding application in Japan, Europe, China, Korea or a PCT application. A notable feature of the PPH programme is its bidirectional nature, in that examination at the JPO, EPO, CNIPA or KIPO can also be accelerated based on favourable examination by the MyIPO of a corresponding application in Malaysia.

    Requests under the Aspec and the PPH do not require any additional official fees. For an Aspec request, the MyIPO may consider the search and examination results from the participating foreign patent office, but is not required to accept the results of such search and examination. The author’s experience under the PPH programme is that when the Malaysian claims conform to the foreign allowed claims, the Malaysian application will generally be accepted for the grant.

    Besides the various partnerships and international affiliations, Malaysia has its own designated IP High Court, established in 2007. The court, situated in Kuala Lumpur, is a court of the first instance. Judgments from this court may be appealed to the Court of Appeal and, with the leave of court, to the Federal Court, the country’s apex court.

    Enforcement during pandemic

    The Malaysian courts, which usually conduct hearings and trials fully in-person, have adapted and adopted procedures to support remote hearings and trials. It is noteworthy that these virtual hearings and trials substantially reduce the costs of bringing foreign witnesses to Malaysia. This has proven to be a significant benefit, particularly for patent trials that require the evidence of experts from overseas.

    The pandemic has certainly brought the question of waiver of patent rights to the centre stage, particularly with provisions allowing for compulsory licensing or government use of patents. Article 31 of the TRIPS agreement, which provides for compulsory licensing or government use of patents, is one of the more notable enforcement challenges patentees face, especially in lesser developed countries. Patentees in Malaysia are no exception, with local patent legislation implementing article 31, codifying it in part X and section 84 of the Patents Act. Part X provides for compulsory licence applications by private parties, while section 84 concerns government rights to the use of patents.

    While article 31 and the act allow for the issuance of compulsory licences permitting the exploitation of patented products domestically, the amended article 31bis allows for compulsory licences permitting the export of patented pharmaceutical products from Malaysia. Article 31bis has not been codified into Malaysian patent law, but proposed amendments to the Patents Act and Patent Regulations, 1986 suggest that such applications may be possible in the future.

    Compulsory licence, government use and safeguards

    The MyIPO handles applications for compulsory licences under part X of the act. Section 49 states that applications for compulsory licences can only be made in either of the following circumstances:

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

    Section 84 of the Patents Act empowers the minister in charge of IP (i.e. the Minister of Domestic Trade and Consumer Affairs) to decide whether a government agency or a designated third party is permitted to exploit a patented invention without the patentee’s consent where:

    1. There is a national emergency, or where the public interest – in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the government – so requires; or
    2. A judicial or relevant authority has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive.

    To date, there have only been two published instances where section 84 was invoked – in 2003, in relation to three HIV/AIDS drugs and, in 2017, to permit the importation of generic versions of a Hepatitis C drug. In both cases, the government had first engaged in negotiations with the patentees, giving them the opportunity to make representations.

    Section 84 contains certain safeguards that protect the interests of patentees. Notably, the Patents Act requires that patentees are notified of the minister’s decision “as soon as is reasonably practicable”, and section 84(3) further provides that patentees are to be paid an “adequate remuneration”, the amount of which is to be decided upon hearing representations by patentees and other interested parties (if they wish to be heard). Patentees may also request that the compulsory licence be varied or terminated, and the minister may so vary or terminate the licence after hearing the relevant parties.

    Additionally, section 84 does not grant the government unlimited powers to exploit a patent, and all government use of patents is subject to the following limitations:

    1. The exploit of the patented invention is limited to the purpose for which it was authorised;
    2. Patentees are not excluded from exercising their patent rights; and
    3. The exploitation shall be predominantly for the supply of the Malaysian market (this limitation would not apply to article 31bis applications).

    Patentees are also not left completely defenceless where the government exercises its rights, as section 84 explicitly provides that patentees may appeal to the high court against the decision of the minister. While article 31bis, compulsory licensing and government-use may cause concern to patentees, there are necessary safeguards in place to prevent abuse of such provisions.

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