MALAYSIA: ASSIGNEE OF RIGHTS OF AN INDUSTRIAL DESIGN IS REGISTERED PROPRIETOR OF INDUSTRIAL DESIGN

April 12th, 2012

 

In the case of AV Future Link Sdn. Bhd. v Inno Supply & Services Sdn. Bhd., the Malaysian High Court in Kuala Lumpur dismissed AV Future Link’s claim for unlawful interference and allowed the Inno Supply & Services' counterclaim of legal and beneficial ownership of a number of registered industrial designs.

The Court held that the rights obtained through registration of an industrial design are territorial in nature and not worldwide. If an assignee of the rights of an industrial design is a registered proprietor of an industrial design within Malaysia, he is treated as the ‘original owner’ for registration.

Therefore, the Court held that in this case, registration of two Deeds of Assignment by Inno Supply & Services assigns to them all rights in a number of industrial designs. This makes reference to importing, offering for sale, and selling modulators identical to Inno Supply & Services’s industrial designs on the part of AV Future Link is an infringement.

AV Future Link (hereinafter referred to as “the Plaintiff”) had been importing, offering for sale, and selling modulators that were identical to Malaysian Registered Industrial Designs No. MY09-00526-0102, MY09-00527-0202 and MY09-00641-0101 ("the registered Industrial Designs") which are owned by Inno Supply & Services (hereinafter referred to as “the Defendant”). The Industrial Designs concern the designs of three MP3 car modulators (hereinafter referred to as "Modulators").

In 2010, the Plaintiff was importing, offering for sale, and selling modulators that were identical to the registered Industrial Designs. The Defendant then sent a cease and desist letter to the Plaintiff to stop all activities infringing the registered Industrial Designs. The Plaintiff initiated suit for unlawful interference and Defendant counterclaimed for infringement of the registered Industrial Designs.

Plaintiff submitted that the Defendant is not the rightful proprietor of the registered Industrial Designs. While, the Defendant asserts that it obtained registration of the registered Industrial Designs vide two Deeds of Assignment in 2009, executed by the creator (who is a China national) of the registration of the registered Industrial Designs, thereby assigning all rights in the registered Industrial Designs within Malaysia to the Defendant. The Court rejected the Plaintiff’s submission and held that an assignee of the rights of an industrial design can be a registered proprietor of an industrial design within Malaysia. Thus, the Defendant as an assignee will be treated as the ‘original owner’ for the purpose of obtaining registration.

The Plaintiff further disputed the validity of the Deeds of Assignment on grounds that there is no stamping, absence of witnesses and absence of diagrams. The Court found that afterthoughts should be disregarded and he who asserts must prove it. Other questions if any must be placed on the record. Defendant contended that Plaintiff in Statement of Claim pleaded of full knowledge of the Deeds of Assignment and Plaintiff has admitted it as "merely an assignment”. The Plaintiff never challenged the process of registering. Thus, the Court accepted the Defendant's submission that the Defendant has been deprived of the opportunity to direct its evidence towards meeting the Plaintiff's unpleaded case. Moreover, the Defendant’s witness clarified that Deeds of Assignment with supporting documents had been furnished in the process of registration of the registered Industrial Designs. The Court held that the Plaintiff cannot attempt to raise issues which were never presented.

The Plaintiff also submitted that the registered Industrial Designs are not new because products utilizing the registered Industrial Designs had been put on sale in China prior to the filing of the industrial design applications in Malaysia. The Court relied on the reference of the Defendant that for test regarding the ‘newness’ or ‘novelty’ of an Industrial Design is territorial and not worldwide. An industrial design is new if it has yet to be disclosed to the public anywhere in Malaysia and has not been the subject of another registration application in Malaysia. Thus, the Court rejected the Plaintiff’s submission and founded the fact that a design has been registered in a different jurisdiction is irrelevant and Industrial Designs have not disclosed within Malaysia even if products utilizing the registered Industrial Designs had been put on sale in China prior to the filing of the industrial design applications in Malaysia.

The Court further affirmed that the prior use occurs where an industrial design has been actually applied to articles before the date of registration of the industrial design, and those articles have been used in such a way that the industrial design becomes disclosed to the public. The Defendant submits that the Plaintiff failed to establish that the registered Industrial Designs were disclosed to the Malaysian public prior to the dates. Also, the Defendant led ample evidence that the registered Industrial Designs are new at the time of application for registration. The Court therefore, held that the Industrial Designs are indeed new in Malaysia.

The Defendant claimed that it never licensed nor consented for importing and selling modulators identical to it registered Industrial Designs thus, the Plaintiff’s activities lead to its registered Industrial Designs being infringed. The Court held that a person infringes the rights conferred by the registration of an industrial design if he, without the license or consent of the owner of the industrial design uses for the purposes of any trade or business, any article to which the industrial design or fraudulent or obvious imitation is applied outside Malaysia without the license or consent of the owner. The test of infringement is essentially a test of the ‘eye’ making a visual comparison as to whether the infringing article is a fraudulent or obvious imitation of the registered design. In this case it was agreed by the parties that the modulators imported and sold by the Plaintiff are identical to the registered Industrial Designs. Thus, the modulators readily manipulated into a position similar to the illustration of a design registration are held by the Court as an Industrial Designs infringement by the Plaintiff. The Court therefore, dismissed with costs the Plaintiff’s assertion for unlawful interference and allowed the Defendant’s counterclaim for Industrial Design infringement on the part of the Plaintiff.

This case clearly explained that an Industrial Design is territorial and not worldwide. If an assignee of the rights of a design is registered proprietor of an Industrial Design within Malaysia he is treated as the ‘original owner’ for registration. Thus, importing, offering for sale, and selling articles identical to the assignee’s Industrial Design would be an Industrial Design infringement.

ADIPVEN can assist in advising on the registrations of industrial designs and how to attack validity of registered industrial designs in Malaysia, India, Singapore, Thailand, Vietnam, Indonesia, Philippines and Brunei. Please do not hesitate to write to us at info@adipven.com if you need any further clarifications on this matter.