Malaysia’s efforts to put a break on the illegal trade in fake goods within its borders is a shining example of what can be achieved with a good dose of political will. In its endeavor to do battle with the “syndicated crime lords” that are fuelling the alarming global escalation in counterfeiting and piracy, Malaysia has put into place the elements of a robust legislative framework, including a well developed judicial system with specialized intellectual property (IP) courts and an effective IP enforcement strategy. According to Associate Professor Rohazar Wati Zuallcobley, Deputy Director General (Industrial Property), Intellectual Property Corporation of Malaysia (MyIPO), it is the “political will shown by the Minister for Domestic Trade, Cooperative and Consumerism that led to strengthening of Malaysia’s enforcement regime” – proof that “Where there’s a will, there’s way!”
In just three years, Malaysia has succeeded in transforming its IP enforcement landscape, introducing many legislative changes to curb the illegal trade in counterfeit and pirated goods. Various deterrent measures have been introduced in the copyright area. For example, a fine – varying from a minimum of RM2,000 (US$565) to a maximum of RM20,000 (US$5,660) – is applied for each infringing copy or title, and offenders risk being sent to prison for up to five years. Repeat offenders may incur fines of up to RM40,000 (US$11,330) per infringing copy or title.
Border provisions have also been introduced to curb copyright and trademark infringement. These provisions support right holders who seek to stop counterfeit or pirated copies of their IP-protected goods from being imported into Malaysia.
The above measures supplemented legislation passed in 2001 that ensures that counterfeiters and pirates draw no financial benefit from their illegal activities. Under the Anti-Money Laundering and Anti-Terrorism Financing Act passed by Parliament in 2001, violations under the Copyright Act 1987 (Section 41) and the False Trade Description Act of 1972 are classified as serious offenses, triggering the freezing of accounts and seizure and forfeiture of assets.
The Suria Kuala Lumpur City Centre shopping complex at the foot of Malaysia's famous Petronas Towers is home to a number of Malay and world famous brands, the owners of which are working with the Malaysia IP authorities to stop the flow of counterfeit goods into the country. (Photo: iStockphotos.com)
Strengthening the courts
Within an impressive 12-month period, MyIPO, with the support of WIPO and other partners, set up 15 IP Session Courts primarily for criminal prosecution of cases involving counterfeiting and piracy. After a year in operation, the specialized IP courts had dealt with 68 percent of cases as compared to only 14.6 percent the previous year. The six dedicated IP High Courts recorded a 38 percent increase in cases after the first year.
Clearly, the foresight of Malaysia’s IP decision-makers is paying dividends by offering more timely and efficient treatment of IP infringement cases. This is good news in terms of instilling business confidence both at home and in the international marketplace, attracting increased foreign direct investment and recognition of Malaysia as a trusted steward of IP rights.
IP enforcement in practice
Malaysia has also taken a number of additional practical steps to beef up IP enforcement measures and reduce the trade in fake goods. These include the establishment of a Special Task Force on Counterfeiting and Piracy at the ministerial level and bolstering the Ministry’s Enforcement Division with the addition of the Putrajaya Intelligence Unit. The 15 officers in the Unit are “trained to use tactical moves to nab those in the upstream piracy business,” says Assoc. Prof. Wati. Inter-agency cooperation has also been strengthened to foster more effective collaboration among the police, customs, Attorney-General’s chambers, local authorities and right holders. Various public advocacy programs have also been launched to inform and warn traders about the risks they run if caught selling counterfeit or pirated goods, and to persuade them to run legitimate businesses.
In spite of the significant achievements of MyIPO, there is no room for complacency, and work is already underway to anticipate emerging challenges, such as the growth in fake pharmaceuticals, and to further hone the country’s IP enforcement capabilities to address these challenges. “We are now amending again all the IP rights legislation,” says Assoc. Prof. Wati. “Intensive IP courses, which include three modules totaling 90 hours of lectures, are being conducted to strengthen the IP knowledge of the session court judges, the enforcement officers and the deputy public prosecutors.” Last year the program produced 34 graduates, and the 55 people currently signed up should complete training by year’s end.
While MyIPO is clearly making headway in tackling the illegal trade in fake and pirated goods, the impact of this insidious trade is still keenly felt. According to the International Intellectual Property Alliance Report 2009, Malaysia’s music industry lost some US$26.2 million in revenue, and losses of US$180 million were suffered in the business software industry. Such hemorrhages of revenue, on top of those experienced by legitimate businesses in the film, leather goods, watch, apparel and publishing sectors are stinging the national economy and striking at the heart of Malaysian industry. The consequences: reduced tax revenues and job losses, with all their wide-reaching implications.
A country must build respect for IP
So what are the key lessons Malaysia has drawn from this experience? “One of the most important lessons is that political will goes a long way to supporting enforcement of IPRs,” says Assoc. Prof. Wati. “Another is that a country must build respect for IP … this effort must be continuous, and no segment of society must be left out.”
This reflects a belief gaining widespread currency among those engaged in the battle against IP crime: effective IP enforcement is securely anchored in building respect for IP rights. This conviction underpins WIPO’s approach to building respect for IP which, in the spirit of the WIPO Development Agenda (recommendation 45), aims to enhance international cooperation and calls for the creation of “an enabling environment” and “balanced approach” to IP enforcement “in the context of broader societal interests and especially development-oriented concerns.” This with a view that “the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare and to a balance of rights and obligations” in accordance with article 7 of the TRIPS Agreement.
Malaysia’s achievements in the field of IP enforcement, in sensitizing businesses and consumers to the negative impact of IP crime and generally promoting greater respect for IP rights, are an outstanding illustration of what can be accomplished in a relatively short time with the commitment and vision of government and the support of WIPO and its international partners. It offers an interesting and insightful case study of the measures that can be taken to effectively do battle against the criminal element that is fuelling the rapid growth in the global trade in fake and pirated goods.
By Cathy Jewell, Media Relations Section, WIPO
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