The Trade Descriptions Act 2011 – A New Lease of Protection
27 August 2012
Malaysia took its cue from the United Kingdom by passing the Trade Descriptions Act in 1976. The Act is to essentially prevent manufacturers, retailers and service industry providers from misleading consumers with false trade descriptions or misleading conduct in the supply of goods and services.
Trademark proprietors and common law owners have special mention in the Act, which provides relief to those found misappropriating their brand names which is included in the term of being a false trade description.
After 35 years in existence, the 1976 Act has been repealed and replaced with the Trade Descriptions Act 2011. Coming into force since November 1, 2011, the objectives remain true to the original intent but it has salient changes that adopt the current trends in consumer protection.
One important change made in the Trade Descriptions Act 2011 is with regard to the Trade Description Order (TDO) made available to proprietors of trademarks and common law rights owner. A TDO is a Court Order applied and obtained that declares any infringing mark or get-up as a false trade description when applied to goods specified in the Order. Once granted, a TDO is valid for a period of five years and the owner of a TDO may use it for enforcement purposes, where the order granted is deemed as admissible evidence or conclusive proof in court proceedings.
The new Trade Descriptions Act 2011 has made a significant change in that it now only allows a registered proprietor of a registered trademark to file for a TDO application. Next, the TDO that has been granted must be filed with the Registrar of TDO and it is valid for only one year.
Such a limitation may not be popular among common law owners with unregistered marks but it is hoped that this will spur more trademark applications and subsequent registrations. To that end it is also hoped that the Registrar of Trade Marks will put greater effort in making the registration process a more efficient one.
Nevertheless, in an infringement situation which require quick registration of a trademark application, the applicant is able to utilize the expedited search and examination process, made possible by amendments to the Trade Marks Regulations 2011 subject to fulfilling certain terms and conditions.
Another aspect of consumer protection that has been introduced in the new TDA 2011 is the punishable offence under Section 20 prohibiting false or misleading statements in relation to contests and games
of chance; for example promising the moon to “winners” when in fact there is no such prize or subjecting the winnings to monetary conditions. This would hopefully curb many Malaysians from falling prey to sham contests that seem to abound here. To further assist enforcement against false descriptions, the new Section 44 also makes it an offence (with relevant defenses) to tipoff or disclosing information that is likely to prejudice an investigation under the Act.
For any offences defined under the new Act, “personal or domestic use” is now a defense (Section 23) to a person charged but the same will not apply to a body corporate.
This exception fosters more accountability as corporations have foremost responsibility in stopping false commercial practices.
There is also a new Section 53 in the TDA 2011 that facilitates investigation and prosecution, by allowing the admissibility of evidence obtained by an agent provocateur (that abets the commission of an offence for the sole purpose of securing evidence) without it being automatically discredited.
Further, Section 66 of the TDA 2011 allows the Court to reward whistleblowers with part of the fine (not more than 50%) imposed upon a conviction being secured under the Act. This is to encourage the public’s participation in providing actionable information.
Based on the above, the new TDA 2011 seems to provide a variety of new features that translates into greater statutory protection and tighter enforcement provisos against false trade descriptions. As the Act is still relatively new, it is perhaps too soon to state its effectiveness but it is greatly anticipated that the changes reflected in the new Act will become a more effective tool in protecting Malaysian consumers and foreign brand owners alike.
Henry Goh & Co
House of Henry Goh,
217 Jalan Imbi,
55100 Kuala Lumpur, Malaysia
T: +60 3 2118 8688
F: +60 3 2118 8777
E: hgoh_kl@henrygoh.com
W: www.henrygoh.com
