MALAYSIA: COPYRIGHT AND PASSING OFF ACTION DECIDED BY HIGH COURT

February 2nd, 2016

 

Public Performance Malaysia & Tan Ngiap Foo v Prism Berhad is a copyright infringement and passing off claim before the High Court of Malaya in Kuala Lumpur.

Public Performance Malaysia Sdn. Bhd. (hereinafter referred as “the First Plaintiff”) is a declared licensing body under the Copyright Act 1987 and has the mandate and responsibility to collect royalties on behalf of recording companies who are members of the Recording Industry Association of Malaysia (RIM), the national trade association representing locally incorporated recording companies and businesses in Malaysia. Tan Ngiap Foo (hereinafter be referred as “the Second Plaintiff”) is the Chief Executive Officer of RIM. Prism Berhad (hereinafter referred as “the Defendant”) is a company registered in Malaysia and has similar role and function as the First Plaintiff, in that it licences the public and collects royalties from licensees in respect of public performance of recorded performances controlled by its members, who are all performers. The Defendant was declared as a copyright licensing body on 1 July 2013.

On 19 February 2002, the First Plaintiff entered into an agreement with Prism Sdn. Bhd., a company that was set up to represent Performers’ Rights on behalf of performers in Malaysia. The First Plaintiff was authorized by Prism Sdn. Bhd. to issue licenses and collect royalties for the public performance, broadcasting and communication to the public of recordings of performances of its members ("Performances Licences") and thereafter to remit such royalties, after deducting administrative charges, to Prism Sdn Bhd for distribution to its members. The First Plaintiff prepared a set of licensing documents for the purpose of issuing the licences on behalf of Prism Sdn. Bhd. Eventually; the First Plaintiff terminated its relationship with Prism Sdn. Bhd. on 31 December 2011.

The First Plaintiff contended that the Defendant has used the set of licensing documents without its permission after the Defendant has obtained the same from Prism Sdn. Bhd.

Copyright Infringement

The Judge has stated that in order to establish a claim of copyright infringement, the onus is on the Plaintiffs to establish, on the balance of probabilities, the following elements:

  1. Whether the First Plaintiff’s licensing documents are eligible for copyright protection;
  2. Whether the First Plaintiff owns the copyright in the licensing documents; and
  3. Whether the Defendant has infringed the First Plaintiff’s copyright.

The First Plaintiff submitted that the licensing documents were “literary work” as defined by Section 3 of the Copyright Act 1987. The Judge accepted that the licensing documents are “literary work” eligible for copyright protection as it satisfies the “originality” and “permanency” requirements under Section 7(3)(a) and Section 7(3)(b) of the Copyright Act 1987.

The plaintiffs adduced evidence that the licensing documents were created by the employees of the First Plaintiff in the course of their employment. The Judge accepted that the copyright in the licensing documents is deemed transferred from the employees (authors) to the First Plaintiff (employer) pursuant to Section 26(2) of the Copyright Act 1987.

The plaintiffs also adduced the Statutory Declaration executed on behalf of the First Plaintiff further supports the First Plaintiff’s ownership of the copyright in the licensing documents pursuant to Section 42 of the Copyright Act 1987. The Judge in the present case referred to the decision of Justice Abdul Malik Ishak in Rock Records (M) Sdn Bhd v Audio One Entertainment [2005] 3 MLJ 552 where His Lordship said:

“It is quite apparent that s. 42 of the Copyright Act 1987 prescribes the manner of proving copyright subsistence and ownership of works. It provides that an affidavit or statutory declaration to be made by the copyright owner or persons authorised by the copyright owner and such affidavit or statutory declaration shall be admissible in any proceedings as prima facie evidence of the facts contained therein. It is quite obvious that s. 42 of the Copyright Act 1987 was enacted to facilitate and ease the process of proving copyright ownership. It is a concession of a sort. It circumvents the requirement of having the produce supporting documentary evidence which may be antiquated and voluminous. Section 42 of the Copyright Act 1987 places the burden on the infringer to dispute and challenge the prima facie evidence adduced by the copyright owner.”

The Judge concluded that the First Plaintiff has established prima facie evidence that the First Plaintiff is the owner of the copyright in the licensing documents and therefore, the burden of proof shifted to the Defendant to rebut the prima facie evidence as to the subsistence of copyright in the licensing documents and the First Plaintiff’s ownership of such copyright. This is supported by the decision of the Court of Appeal in Microsoft Corporation v Yong Wai Hong [2008] 6 CLJ 223, where the Court held:

“In the present case, the appellant filed an affidavit which complies with section 42(1) of the Copyright Act. The effect of that is to provide prima facie evidence of the facts of the appellant’s ownership of the copyright over several works in question. It was then for the respondent to offer positive evidence to displace the appellant’s prima facie ownership, for example, by showing that some other person is the true owner of the claimed copyright."

The Defendant submitted that the ownership of copyright in the licensing documents belonged to Prism Sdn. Bhd. relying on a letter issued by the Chairman of the Board of Directors of Prism Sdn. Bhd. which states that all documentation works include Tariff and Licensing Form under Prism Sdn. Bhd. will be transferred to Prism Berhad. However, the Judge concluded that the Defendant failed to produce any evidence to show that the copyright in the licensing documents belonged to Prism Sdn. Bhd. as nobody from Prism Sdn. Bhd. was called to give evidence during the trial. The Judge further stated that mere fact that Prism Sdn. Bhd. were in possession of the licensing documents does not mean that they own the copyright in the said documents. The Judge also noted that there was no evidence to indicate that there has been any written assignment or any transfer of the copyright in the licensing documents to Prism Sdn. Bhd. or to the Defendant pursuant to Section 27(3) of the Copyright Act 1987. Accordingly, the Judge concluded that copyright subsists in the licensing documents and that the First Plaintiff is the owner of such copyright.

With regards to the issue of infringement, the Judge relied on the application of Section 36(1) of the Copyright Act 1987 read together with Section 13(1) of the Act as laid down by Justice Low Hop Bing in Megnaway Enterprise Sdn Bhd v Soon Lian Hock [2009] 3 MLJ 525 where His Lordship held that for direct infringement, it must be established that:

  1. There is sufficient objective similarity between the original work and the infringing copy;
  2. There is a causal connection between the original work and the infringing copy; and
  3. What has been infringed must constitute a substantial part of the original work.

The Judge concluded that there is substantial similarity and commented that almost the whole of the First Plaintiff’s licensing documents have been copied and reproduced by the Defendant’s infringing documents after having taken a visual comparison between both the documents. The Judge also concluded that there is a causal connection between the original work and the infringing copy as it is the Defendant’s own admission that it had prior access to the licensing documents through Prism Sdn. Bhd. The Judge referred to the decision in Plastech Industrial Systems Sdn Bhd v N & C Resources Sdn Bhd & Ors [2012] 5 MLJ 258 wherein Justice Azhar Mohamad held that prior access to the copyrighted work may establish causal connection between the works in issue.

The Judge, referring to the Defendant’s pleaded case that they have no knowledge of the First Plaintiff’s copyright in the licensing documents, held that it is trite law that knowledge or intention is not essential to prove copyright infringement relying on the decision of the Court of Appeal in Elster Metering Ltd & Anor v Damini Corp Sdn Bhd & Anor [2011] 8 MLJ 253. Accordingly, the Judge found that the Defendant had infringed the First Plaintiff’s copyright in the licensing documents by reproducing and/or causing reproduction of the same.

Passing Off

The Judge, following the decision of Court of Appeal in the case of Ho Tack Sien & Ors v Rotta Research Laboratorium [2012] 8 CLJ 645 stated that in order to establish an action for passing off, the Plaintiff must prove that:

  1. It had sufficient reputation or goodwill in the mark;
  2. It must demonstrate a misrepresentation by the Defendant to the public leading or likely to lead the public to belief that goods or services offered by him are the goods services of the Plaintiff; and
  3. It must demonstrate that it had suffered damage or injury to its business or goodwill due to the Defendant’s misrepresentation

The Judge found that the First Plaintiff had sufficient reputation and goodwill as the public and music users recognize and know that the First Plaintiff has acted and acts as the authorized licensing body RIM and members of RIM. The Judge also found that there was misrepresentation in one of the Defendant’s documents which reads “PRISM is authorized to negotiate and grant licences for the Public Performance of Recordings on behalf of RIM members and/or…” when RIM or members of RIM have not at any time authorized or permitted the Defendant to negotiate and/or grant licences for the public performance of RIM Members' Recordings.

With regards to the issue of damages, the Judge concluded the First Plaintiff had suffered damage or injury to its business after perusing through a plethora of case laws which suggest that it is sufficient to show a probability of damage as opposed actual damages (Syarikat Zamani Hj Tamin Sdn Bhd & Anor v. Yong Sze Fun & Anor (2006) 5 MLJ 262) and that the courts will readily infer the likelihood of damage to the plaintiff’s goodwill in the case of direct competition with one another (Seet Chuan Seng & Anor v Tee Yih Jia Food Manufacturing Pte Ltd [1994] 3 CLJ 7), as in this case.

Accordingly, the Judge concluded that the Plaintiffs have established the elements for an action in passing off against the Defendant.