Protection of Intellectual Property Rights: Prelude to Free Trade Agreement between Malaysia and the US

It is widely known that Malaysia has yet to seal the Free Trade Agreement (FTA) with the United States although the pact will encourage greater liberalization of foreign investment between the United States and Malaysia as well as deliver stronger Malaysian growth, prospects of higher investments into the country, higher quality medicines for illnesses and ailments, improved technological advancements and increased human resource employment i.e. spur the inception of better job prospects for educated and talented Malaysians.

Malaysia is the tenth largest trading partner with the United States with over USD$44 billion in two-way trade. The United States is the second largest source of imports for Malaysia and in turn the United States is the largest destination for Malaysian made goods. With the United States being the largest investor in Malaysia, liberalization of Malaysia’s investment regime will support further development of United States and Malaysian companies, boost competitiveness in trade that ultimately drive prices for high quality products down and thereafter increasing consumer’s choices over quality goods.

Open trading conditions through the FTA agreement will encourage inflow of private sector investment for research in pharmaceuticals and other fledging sectors namely heavy duty industries, chemical and electronics into Malaysia. In view of the advent of the FTA between the two countries, the United States has commenced with strong initiatives by focusing attention to intellectual property rights, pharmaceuticals and medical technology in the Asian region including in Malaysia.

This includes the recently established United States Office of Intellectual Property and Innovation that has increased responsibilities including innovation issues specifically related to the pharmaceutical and medical technology industries. With the recently concluded trade and investment framework arrangement with the Association of Southeast Asian Nations (ASEAN), the Office is currently negotiating free-trade agreements with Thailand and Malaysia. The Office has also pledged to focus its resources on deepening trade relations with Asia and member countries of ASEAN being Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam.

The prerequisite to the FTA with Malaysia primarily focuses on the strengthening of necessary frameworks including enhancing Malaysia’s intellectual property and customs regimes to increase secured future trade and investment between the two countries. This is due to the paramount concern of the United States investors remain to be the protection of intellectual property rights as such protection is a crucial factor for new investment territories alike Malaysia.

As a first step towards protection of intellectual property rights, a Roundtable on Intellectual Property Rights (IPR) Cooperation between Malaysia and the United States was held recently in Malaysia to enhance bilateral cooperation with regard to intellectual property rights enforcement. Discussions included cooperation between the United States and Malaysia for enforcement and coordination to combat piracy and counterfeit products as well as strengthening of judicial powers in Malaysia centering on intellectual property issues and remedies.

Malaysia has indeed an uphill task to clamp down on pirated or counterfeit goods as well as to completely bringing an end to piracy and counterfeiting activities that affects intellectual property rights in this region so as to pave the way for foreign investments and ventures into Malaysia prior to the agreement and implementation of the FTA. The Malaysian government is first tasked to establish that there are practical safeguards and laws where required and necessary to protect any form of intellectual creations and technology inventions in any industry that are conceived and/or brought into Malaysia by foreign investors and business ventures.

Currently, Malaysia’s IPR enacted legislations and regulations for intellectual property protection namely Patents Act 1983 and the Patent Regulations 1986, Trademarks Act 1976 and Trademarks Regulations 1997, Industrial Designs Act 1996 and Industrial Designs Regulations 1997, Copyright Act 1967 and Layout Design and Integrated Circuit Act 2000 as well as the Trade Descriptions Act conforms with international standards for intellectual property protection needs.

In addition to the recently implemented accession to the Patent Co-Operation Treaty (PCT), other proposals currently being considered by Malaysia to expand protection of intellectual property rights include possible extension of protection for sound and scent marks, patenting of plants and animals and possible extension of copyright protection from 50 to 70 years.

Although intellectual property laws in Malaysia are in place and correspondingly conform with international standards for intellectual property protection needs, recognition of international intellectual property rights and increased efforts over enforcement initiatives by the relevant government agencies is required to effectively protect both foreign and local investors’ intellectual property rights and interest. Enforcement of intellectual property rights currently ongoing in Malaysia are not limited to government agencies only but also carried out effectively through intellectual property agents representing foreign interests in Malaysia via civil actions in the Malaysian Courts.

With IP protection and anti-piracy initiatives ongoing in Malaysia, the proposed FTA may allow for the profitable entertainment and film industry from the United States to further strengthen its cooperation with the Malaysian authorities to protect copyrighted entertainment content, whether in optical media, broadcast or online form, and to set a standard for IPR protection that will allow innovative and creative industries amongst others to flourish in both United States and Malaysia.

In addition to the Malaysian initiatives, a recent proactive measure initiated by the United States for protection of intellectual property in the Asian region amongst others, is the recent pledge of USD$3million to protect intellectual property rights through international projects with the largest allocation, nearly USD$ 727,000.00 targeting economies of the ASEAN member countries.

The said funds are allocated for bilateral and multilateral training as well as technical assistance projects aimed at protecting intellectual property rights (IPR). The projects are to be conducted in consultation with United States missions around the world including in the Asian Region, the World Intellectual Property Organization and industry representatives in the respective Asian country. United States government bodies such as the Commerce Department’s Patent and Trademark Office and Department of Justice will be entrusted with the administration of the projects in the Asian countries.

The two-year funded effort by the United States to fighting international property crimes in view of realizing the FTA initiatives in the Asian Region will assist to provide the following in the relevant Asian territories:

(a) training to border and customs officials at key offices and ports for entry of goods;

(b) conduct train-the-trainer sessions for select prosecutors and judges;

(c) effort to establish an intellectual property rights data center and investigation unit;

(d) enhance the capabilities of the country’s law enforcement officials to fight against piracy of audio and visual recordings.

Therefore, alongside positive initiatives by both Malaysia and the United States to achieve optimum level of protection in intellectual property rights and interest for freedom of trade between the two countries, it is best for the Malaysian Government to take a strong stand on the protection of intellectual property rights to enable inflow of investments of corporate interests and business communities from the United States as it the most crucial approach to move forward to achieving the proposed FTA Agreement with the United States.

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