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The recent High Court decision in Dr HK Fong BrainBuilder Pte Ltd v SG-Maths Sdn Bhd & Ors has brought about important changes to the franchise industry under the Franchise Act 1998, in particular on foreign franchisors. This is in light of the Court's interpretation of the term "franchisor" appearing in a provision of the Franchise Act 1998 ("FA") on the requirement to register a franchise with the Registrar of Franchises (the "Registrar"). As a result of this decision, in addition to the need to obtain the Registrar's approval or consent under section 54 of the FA, foreign franchisors are now required to register their franchises with the Registrar under section 6 of the FA. This decision is currently pending appeal at the Court of Appeal.
The Government of Malaysia will impose a digital service tax of 6% on foreign digital service providers with effect from 1 January 2020, with the annual threshold being set at RM500,000, according to the Malaysian Deputy Finance Minister after the tabling of the Service Tax (Amendment) Bill 2019 (the "Amendment Bill") on 8 April 2019. The Amendment Bill has been passed by the lower house of the Malaysian Parliament. Upon the Amendment Bill being passed by the upper house of Parliament and receiving the royal assent, foreign digital service providers such as Spotify and Netflix will be taxed commencing 1 January 2020.
Under the Amendment Bill, any tax defaulter can, upon conviction, be fined up to RM50,000, or imprisoned for a term of up to three (3) years, or both.
Almost one year after the Malaysia Competition Commission ("MyCC") issued its draft guidelines on intellectual property rights and thereafter sought public consultation thereon, the MyCC Guidelines on Intellectual Property Rights and Competition Law ("IPR Guidelines") came into force on 6 April 2019. The IPR Guidelines provide guidance on MyCC's approach to competition issues under the Competition Act 2010 ("Act") relating to intellectual property. The IPR Guidelines must be read together with the Act and all the other MyCC guidelines since the latter apply to competition law generally.
Among the various illustrations provided by MyCC within the IPR Guidelines include circumstances in which horizontal and vertical agreements would be seen as anti-competitive in nature; territorial and field of use restrictions; exclusive licensing; exclusive dealing; tying and grant-backs; and "cartel" arrangements.
Overall, the IPR Guidelines provide a useful guide to MyCC's approach on competition issues relating to intellectual property rights under the Act. Intellectual property rights owners should immediately review their existing agreements and behaviour to determine if there is a need to revise such agreements and / or behaviour to avoid any infringement of the Act. The consequences of an infringement of the Chapter 1 Prohibition (section 4 of the Act) or the Chapter 2 Prohibition (section 10 of the Act) could potentially be severe as it may result in MyCC imposing a financial penalty of up to 10% of the enterprise's worldwide turnover for the period during which an infringement occurred.
The Malaysian Anti-Corruption Commission issued guidelines on "adequate procedures" ("Guidelines") earlier this year. Under the Malaysian Anti-Corruption Commission Act 2009, adequate procedures are a defence against a corporate liability charge. Given the heightened efforts by the authorities to combat corrupt activities in the public and private sector, it is timely for commercial organisations to look inwards and do a stock take of their best practices taking into account the Guidelines issued.
The Improver questions in relation to the purposive construction of patent claims were once the bedrock of patent infringement principles. Such foundations have been shaken by the seismic shift in approach taken by the United Kingdom Courts in introducing the Doctrine of Equivalents into UK law. Closer to home, the effects of these have begun to take root, starting with the High Court's decision in Kingtime International Limited & Anor v Petrofac E&C Sdn Bhd. This update explores the merits of this eyebrow-raising decision, which represents the inaugural judicial recognition of the Doctrine of Equivalents in Malaysia with respect to the test for patent infringement, and what may lie in store for the future of Malaysian patent litigation.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Christopher & Lee Ong
Level 22, Axiata Tower ,
No. 9 Jalan Stesen Sentral 5
Kuala Lumpur Sentral,
50470 Kuala Lumpur, Malaysia
www.christopherleeong.com
Contacts: Yon See TingPartnerD +603 2278 8311F +603 2278 8322see.ting.yon@christopherleeong.comLee Hock ChyeManaging PartnerD +603 2273 1919F +603 2273 8310hock.chye.lee@christopherleeong.comFiona SequerahPartnerD +603 7958 8310F +603 7958 8311fiona.sequerah@christopherleeong.comLim Wee HannPartnerD +65 62320606wee.hann.lim@rajahtann.comYau Yee MingPartnerD +603 2278 8311F +603 2273 8322yee.ming.yau@christopherleeong.comKuok Yew ChenPartnerD +603 7958 8310F +603 7958 8311yew.chen.kuok@christopherleeong.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client. |
This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update. |
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