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MALAYSIA: WHO OWNS THE BIKE?

6th April, 2020

The following article summarizes several suits and appeals concerned with Honda Giken Kogyo Kabushiki Kaisha, a Japanese automobile company, (hereinafter referred to as “Honda”) copyright claims and damage for alleged copyright infringements by several Defendants. In all the suits discussed, Honda acts as the Plaintiff. For easy reference the suits and the following appeals are listed as below:

  • W-02(IPCV)(W)-2376-12/2016 (hereinafter referred to as “Appeal 2376” originated High Court Civil suit 22IP-36-07/2014 (hereinafter referred to as “Suit 36”)
  • W-02(IPCV)(W)-2-01/2017 (hereinafter referred to as “Appeal 2”) and W-02(IPCV)(W)-3-01/2017 (hereinafter referred to as “Appeal 3”) originated from 22IP-37-07/2014 (hereinafter referred to as “Suit 37”).
  • The Defendants in Suit 36 are DNC Asiatic Holdings Sdn. Bhd., Demak Marketing Sdn. Bhd., and Demak Motor Corporation Sdn. Bhd.
  • The Defendants in Suit 37 are MForce Bike Holdings Sdn. Bhd., and Malaysian Formula Bikes Sdn. Bhd.
  • The decision to this appeal dated 30 October 2019 pertains to Appeal 2 only as the parties have agreed to proceed with Appeal 2 first and the decision to this appeal will determine the course of Appeal 2376 and Appeal 3.

The Defendants in Suit 36 are involved in importing, assembling, marketing, and selling motorcycles known as “Demak” (hereinafter referred to as “1st Bike”) while the Defendants in Suit 37 are involved in importing, assembling, and distributing motorcycles known as “SYM E-SMART” (hereinafter referred to as “2nd Bike”). Honda claims ownership over copyright of its popularly known motorcycles known as EX-5 or EX-5 Dream (hereinafter referred to as “EX-5”). The copyright claimed was created in 1985 in Japan and EX-5 was launched in Malaysia in 1987. Proceeding with the suits, Honda alleges that Defendants of Suits 36 and 37 had infringed Honda’s copyright by the following acts: manufacturing, producing, assembling, distributing, marketing, selling the 1st and 2nd bikes, respectively.

As a counterclaim, the Defendants of Suit 36 claims that Honda failed to establish that the EX-5 drawings were created by Mr. Ichiro Koizumi. Furthermore, the Defendants also claimed that the 1st Bike was created independently in 2003 by Bally TRD and there was no evidence that the claimed copyright infringement has resulted in actual loss by Honda. The Defendants in Suit 37 counters with the following: a declaration that Honda has no ownership over the copyright, a declaration that no infringement has taken place, unlawful interference of trade, as well as a Declaration under the Competition Act 2010. Furthermore, the Defendants of Suit 37 contended that the 2nd bike was launched in Malaysia in 2014 and was created independently based on a Vietnamese model of Sanda Boss and that the EX-5 was not in any way similar to the 2nd Bike.

With both suits heard together in the High Court, the Court allowed Honda’s claims in Suit 36 and the Defendant’s counterclaims was dismissed. In contrary, the Court dismissed Honda’s claims for damages for alleged copyright infringement by the Defendant. Defendants of Suit 36 being dissatisfied with the High Court’s decision filed an Appeal with the Court of Appeal, “Appeal 2376”. Both the Defendants and Plaintiffs filed an appeal in Suit 37. In the Appeals, the Defendants now as Appellants questioned (1) is there copyright in claimed Works and whether Honda actually owns the copyright, and (2) assuming the copyright subsists, did the Defendants in question infringed the copyright owned by Honda, if it was indeed owned by them?. Although the High Court found that the Plaintiff has succeeded in establishing that copyright subsisted in the claimed Works, but the Court found that there was no evidence of copyright infringement committed by the Defendants.

In this appeal, Appeal 2, the Defendants claims that the High Court was in error in deciding that the Plaintiff had succeeded in establishing that copyright subsisted in the EX-5 claimed Works and that the Plaintiff owned the copyright. The Court of Appeal maintained that the High Court has correctly found that copyright subsisted in EX-5 claimed works. The High Court justified that under the principle of national treatment and Malaysia being a member of Berne Convention, is under the obligation to grant the same copyright protection to the national of other Berne countries, in case being Japan. The Plaintiff further adduced evidence to support their claim to the ownership of the copyrights of the claimed works. In view of this, the Court of Appeal unanimously dismissed Appeal 2 with costs of RM20, 000. 00 against the Appellants and reaffirmed the High Courts decision.