Intellectual Property News September 2015

Intellectual Property News September 2015 We are delighted to share with you the latest edition of our newsletter covering the latest Intellectual Property developments in Indonesia, Malaysia and Singapore. We trust you will find this newsletter useful. If you would like any further information, please contact the team in your jurisdiction. Best regards, Baker & McKenzie.Wong & Leow (Singapore) Hadiputranto, Hadinoto & Partners (Indonesia) Wong & Partners (Malaysia) Recent Developments In Indonesia Malaysia Singapore Joint Regulation of Ministry of Law and Human Rights and Ministry of Communication and Information of the Republic of Indonesia on the Course of Actions to Take Down Copyright Infringing Contents On 2 July 2015, a joint regulation was issued by the Ministry of Law and Human Rights ("MoLHR") (No. 14 of 2015) and the Ministry of Communication and Informatics ("MoCI") of the Republic of Indonesia (No. 26 of 2015) on the Implementation of Takedown of Contents and/or of Removal of Users' Rights to Access Copyright and/or Neighboring Rights Infringement in Electronic Systems. The purpose of this regulation is to implement measures accommodated in Article 56, paragraph (2) of Law No. 28 of 2014 on Copyright ("Copyright Law"), which requires both the MoLHR and the MoCI to coordinate in shutting down electronic systems that disseminate copyright-infringing contents or removing such infringing contents. The regulation will provide avenues for copyright owners to take actions against online infringement. Complaint filing to the MoLHR According to the regulation, anyone who is aware of any copyright/neighboring rights infringement may lodge a complaint to the MoLHR. The complainant could be (i) the author of the works being infringed; (ii) the copyright owner; (iii) a Latest News For more information, please contact: Kuala Lumpur Chew Kherk Ying Partner Tel: +60 3 2298 7933 kherk.ying.chew@wongpartners.com Singapore Andy Leck Managing Principal Tel: +65 6434 2525 andy.leck@bakermckenzie.com Jakarta Daru Lukiantono Partner Tel: +62 21 2960 8588 daru.lukiantono@bakernet.com Baker & McKenzie.Wong & Leow* www.bakermckenzie.com/singapore Hadiputranto, Hadinoto & Partners*

neighboring rights holder (e.g. performers, broadcasting organizations and sound recording producers); (iv) a licensee; (v) local collecting societies; (vi) authorized associations; and (vii) other authorized parties. According to the regulation, a complainant may submit a complaint to the Directorate General of Intellectual Property ("DGIP"), which is part of the MoLHR, by filing it directly to the office or via the website. The complaint should also include the following information/documents: (i) identity of the complainant; (ii) proof of ownership of the work; (iii) website address where the infringing contents are made available; (iv) type and/or name of the content which is being infringed; (v) other information related to the work being infringed; and (vi) power of attorney (if the complaint is being lodged by an attorney). www.hhp.co.id Wong & Partners* www.wongpartners.com * Baker & McKenzie.Wong & Leow, Hadiputranto, Hadinoto & Partners and Wong & Partners are member firms of Baker & McKenzie International in Singapore, Indonesia and Malaysia respectively The following are the steps for closure of the content: a. The MoLHR verifies the complaint. b. If the MoLHR finds sufficient evidence of infringement, it sends its recommendation to the MoCI. c. After the MoCI gets the recommendation from the MoLHR, the MoCI partly or wholly takes down the content and/or removes the access rights.the MoCI will also announce this on its official website. d. If the contents are entirely removed, a court judgment will be needed. The owner of the content and/or the access right of the content may file a request to the MoLHR through the DGIP to reopen the content and/or the access rights. The DGIP will assess the request and may issue a recommendation to the MoCI to re-open the content/access right that has been closed. Several local news sources reported that in the short term, this action will be mainly focused on stopping unauthorized streaming and download of movies (or other cinematographic works) and songs (or other sound recording works), and so far it has been implemented against several local websites in Indonesia. DARU LUKIANTONO / WIKU ANINDITO Partner / Associate Hadiputranto, Hadinoto & Partners Back to top Plain Packaging for Tobacco Products? A proposal to consider plain packaging for tobacco products has been recently raised in Malaysia at the International Nicotine Addiction Conference in Kuala Lumpur on 23rd and 24th April 2015. This issue has arisen in recent years and in 2012, the Australian High Court found in favour of the Australian government that the labelling requirement of the

Tobacco Plain Packaging Act 2011 was not unconstitutional following a legal challenge by tobacco giants British American Tobacco, Japan Tobacco International, Philip Morris and Imperial Tobacco Australia Limited in 2011. Following this decision, various countries have lodged complaints with WTO seeking sanctions against Australia for breach of the TRIPs Agreement on grounds that the decision undermines the full protection of IP rights guaranteed under the TRIPs Agreement. A decision from the WTO panel is anticipated in 2016. It will be interesting to see if Malaysia will follow suit and implement legislation for plain packaging for tobacco products. The justification supporting such legislation is the overriding health concerns. However, there are strong arguments that plain packaging regulations may usurp the rights conferred by the Malaysian Trademarks Act for the protection of trademarks, and may also breach a fundamental right and liberty accorded by the Federal Constitution of Malaysia which states that no person shall be deprived of property save in accordance with law. In addition, Malaysia may also risk violating the spirit and objectives of several international and ASEAN treaties which Malaysia is a signatory to. There is also the overall principle of proportionality, i.e. not only must any legislation or regulation be enacted for a legitimate purpose, it must also be proportionate in scope and effect. IP owners affected by such legislation argue that plain packaging legislation goes beyond what is reasonable to protect public health. It is contended that there is no study or evidence which conclusively proves that plain packaging would have at least reasonable prospects of decreasing smoking. An adult who has made a conscious and well-informed decision to smoke will not likely to be deterred by unattractive packaging. A consumer s decision to purchase cigarettes may not be heavily motivated by the attractiveness or appeal of its packaging. Rather, it is the physical effect derived from smoking which encourages a consumer to continue purchasing cigarettes. On this basis, it is argued that the implementation of plain packaging regulations do not appear to be rationally connected to the objective of reducing the purchase of cigarettes in the interest of public health. The above issues are not easy issues for any legislator to grapple with and it will be interesting to see the outcome of the WTO decision in 2016 in response to WTO complaints lodged against Australia. CHEW KHERK YING / JAESY YAP Partner / Associate Wong & Partners The role of the Registrar of Trade Marks in rectification and expungement proceedings In the case of Ho Tack Sien & Ors v. Rotta Research Laboratorium S.p.A & Anor; Registrar Of Trade Marks (Intervener) & Another Appeal [2015] 4 CLJ 20, the plaintiff, who is a registered proprietor of the 'Viatril-S' mark for pharmaceutical products in Malaysia, had succeeded in an action against the defendants in the High Court for infringement and passing off of the plaintiff's mark and obtained an order to expunge the 'Artril-250' mark from the register. The Court of Appeal affirmed the High Court's decision but set aside the plaintiff's claim for

expungement. The court held that notwithstanding infringement was established, the court could still elect not to allow expungement of the 'Artril-250' mark. The Court of Appeal also held that the Registrar of Trade Marks should be made a party in a rectification or expungement proceeding and the registrar's evidence be heard before the High Court made a finding on the plaintiff's application for expungement. The plaintiffs filed two appeals before the Federal Court against the decision of the Court of Appeal. The issues raised were the proper role of the registrar in rectification and expungement proceedings; whether evidence of registrar is material in proving trade mark infringement and whether it is a pre-requisite to name the registrar as a party to the proceeding. While Section 62 of the Malaysian Trade Marks Act states that the registrar shall have the right to appear and be heard in any legal proceedings where relief involves rectification of the register and shall appear if so directed by the court, the Federal Court held that section 62 of Act cannot be read to mean that the Registrar ought to be made a party in a rectification or expungement proceedings, otherwise the Registrar would be placed in an invidious position of participating in the proceedings in favour of one side or the other, and would destroy the neutrality of his office. There was no necessity to include the Registrar as a party where there was no cause of action against the Registrar. The Federal Court further confirmed that neither the court nor the registrar has discretion to allow a mark that was wrongfully registered to remain on the register. It is the duty of a registered proprietor or owner of an aggrieved mark to bring an action in court for rectification and expungement proceedings. The Court of Appeal have wrongly relied on section 40(1)(f) of the Act which provides that the use of an identical mark do not constitute infringement if it is "in exercise of the right to the use of that trade mark given by registration as provided by this Act" and had disregard section 35(1) of the Act and other provisions which provides that the defendants could use the mark only if it was validly registered. The Federal Court disagreed with the position and held that a mark registered by the Registrar does not constitute prima facie a valid trade mark but a rebuttable presumption. The Federal Court made reference to the case of Industria De Diseno Textil SA v. Edition Concept Sdn.Bhd [2005] 2 CLJ 357 and held that registration is not a defence in relation to marks which were wrongfully entered on the Register. The case clarifies the role of registrar in relation to rectification and expungement proceedings and the position in Malaysia that the defence accorded under section 40(1)(f) of the Act can be relied only if the mark is validly registered. CHEW KHERK YING / WOO WAI TENG Partner / Associate Wong & Partners The Extent of Protection of Well-Known Marks in Malaysia Article 6bis of the Paris Convention and Article 16 of the TRIPS Agreement (collectively, Articles ) have traditionally been the leading treaty provisions that set out the standard of well-known trade marks. In Malaysia, the Articles are incorporated into the Trade Marks Act 1976 ("TMA") under section 14(2) and

Regulation 13B of the Trade Marks Regulations 1997 ( TMR ) sets out the criteria to be considered when determining whether a mark is a well-known mark. These criteria include the degree of recognition of the mark in the relevant sector of the public, geographical coverage in terms of use and promotion, evidence of successful enforcement and the value associated with the mark. These criteria were endorsed in the case of Dabur India Ltd [2011] 10 CLJ 134 and in the case of Colliers International Property Consultants Inc [2015] 1 LNS 252, where the judge noted that the best evidence to show recognition of well-known marks are unsolicited requests from potential licensees, distributors, or by third parties. Special protection afforded to well-known marks Well-known marks in Malaysia are afforded a special status and have enhanced protection under the TMA, specifically: A well-known mark proprietor can prohibit registration of other marks based on a lower test of near resemblance instead of a likelihood to deceive or cause confusion to the public; and A well-known mark proprietor can also prohibit registration of another mark which is filed for different goods/services from the well-known mark, if the mark is identical or so nearly resembles the well-known such that the use of the mark is associated with the proprietor of the well-known mark and the interests of the proprietor are likely to be damaged by such use. The above provisions have allowed well-known mark proprietors greater ammunition to prevail over oppositions. Injunctive relief In addition to the above, Section 70B of the TMA entitles proprietors of wellknown trade marks to seek an injunction to restrain the use of marks which are similar to the well-known marks or to an essential part of the same in Malaysia in respect of the same goods/services where use is likely to cause confusion. The right to seek an injunction applies irrespective of whether the proprietor of the well-known mark has carried on business in Malaysia. Defensive registrations Prior to the recognition of well-known marks and its entrenched protection under the TMA as discussed above, there was limited protection of well-known marks through "defensive registrations". Essentially, a well-known invented word may be registered as a defensive trade mark in classes of goods/services which are not used by the proprietor without risk of being expunged for non-use. However, section 57 only offers a very narrow form of protection as it will only be applicable to marks which are invented words. There has been very limited use of defensive filings as a result of a very narrow interpretation of what is an "invented word". In the case of Bata Ltd v Sim Ah Ba [2006] 6 MLJ 445, the court held that "to be an invented word it must not only be newly coined, in the sense of not being already current in the English language, but must be such as not to convey any meaning, or at any rate, any obvious meaning."

Challenges ahead Notwithstanding a clear recognition of well-known marks and the special protection afforded to the same, there has only been a handful of marks which have been declared as well-known in Malaysia. This is primarily due to the absence of any regime for registration of well-known trade mark at the Trade Marks Registry. It appears that the only way for a mark to be recognised as a well-known trade mark in Malaysia would be by way of a court declaration or the Registry's decision in an opposition or hearing. Legislators ought to consider inclusion of new provisions in the TMA for registration of wellknown marks. Such provisions would provide a formal process allowing wellknown marks to be registered and for well-known marks proprietors to fully utilize the existing provisions enacted for the protection of well-known marks in Malaysia. CHEW KHERK YING / WOO WAI TENG Partner / Associate Wong & Partners Back to top Singapore High Court Invalidates "Manchester" Mark for Cigarettes The Singapore High Court recently invalidated a trade mark for cigarettes 2 years after it was validly registered, finding that the mark, being similar to an earlier mark and registered for identical goods, was likely to cause confusion as to the origin of the cigarettes. Facts In the case of Jamal Abdulnaser Mahmoud Al Mahamid v Global Tobacco Manufacturers (International) Sdn Bhd [2015] SGHC 42, the plaintiff and defendant each owned registered trade marks in respect of cigarettes. The plaintiff's mark (the "Plaintiff's Mark"), was registered in Singapore on 7 June 2005, and is used on cigarettes sold dutyfree, usually to ship chandlers and sailors. The mark has been registered in over 34 countries and was first used in Singapore in 2010. The defendant's mark (the "Defendant's Mark"),

was registered in Singapore on 29 November 2012. At the time of its registration, no objections were raised by the Intellectual Property Office of Singapore, and no opposition was filed. The Defendant s cigarettes have been sold in Singapore since November 2012. In 2014, the plaintiff commenced proceedings seeking invalidation of the Defendant's Mark. Grounds of Invalidity The plaintiff argued that the Defendant's Mark should be invalidated on 4 grounds, namely: a. s 23(3)(a)(i) read with s 8(2)(b) of the Trade Marks Act (Cap. 332) (the "TMA"), as the Defendant's Mark was similar to the Plaintiff's Mark, and there was a likelihood of confusion; b. s 23(3)(b) read with s 8(7)(a) of the TMA as the use of the Defendant's Mark amounted to passing off; c. s 23(1) read with s 7(6) of the TMA as the defendant's application for the registration of the Defendant's Mark was made in bad faith; and d. s 23(3)(a)(iii) read with s 8(4) of the TMA as given that the Plaintiff's Mark was well-known in Singapore, the use of the Defendant's Mark indicated a connection between the parties, and there was a likelihood of confusion because of such use. Similar Marks on Identical Goods The Court applied the step-by-step methodology by assessing: (i) similarity between the trade marks in question; (ii) the registration of the marks for identical or similar goods; and (iii) the existence of a likelihood of confusion among the public owing to the similarity. On the similarity of marks the Court found that the Plaintiff's Mark and the Defendant's Mark were visually, aurally and conceptually similar. The "Manchester" word featured as the dominant visual feature in both marks, and when read, both marks were aurally similar. Conceptually, the Court found that some ambiguity may have been intended, for the image to be evoked from the mark to be whatever is triggered in the minds of the consumer by the word "Manchester", but ultimately the ideas triggered revolved around the city; England or Great Britain; or the football teams. Since there was no dispute that the goods in question were identical, the Court moved on to consider whether there was a likelihood of confusion as to the origin of the goods because of the marks. The Court was satisfied that the relevant consumer of cigarettes would be confused, since the two marks are in respect of identical goods, and there was a high degree of similarity between the marks. Both marks are dominated by the word "Manchester", and a consumer would be hard put to recall the differences, which are of minor detail only. As such, the Court declared that the registration for the Defendant's Mark was invalid. Other Grounds

The Court found that the other 3 grounds for invalidity were not made out. i) Invalidation on grounds of bad faith In order to establish that there was bad faith on the part of the defendant in registering the Defendant's Mark, the plaintiff had to show that the defendant's conduct fell short of normally accepted standards of commercial behavior, and that the defendant knew of facts which, if known to an ordinary honest person, would have made that person realise that there would be a breach of those standards. The mere fact that the defendant knew of the earlier registration of the Plaintiff's Mark was insufficient to constitute bad faith, and something akin to exploitation of dishonesty was required. This was not shown in the present case. ii) Invalidation on grounds of Passing off In relation to passing off, the Court found that the evidence adduced by the Plaintiff was not sufficient to establish goodwill in the Plaintiff's Mark. The Court held that goodwill is the attractive force that pulls consumers to a particular business. Goodwill may be shown through various means, including sales figures, in appropriate circumstances. However, although the Plaintiff adduced evidence to show that his sales of cigarettes rose from US$85,000 in 2010 to over US$400,000 in 2012, the Court held that sales alone do not establish goodwill. It was explained that whilst sales may be indicative of goodwill, but it would not, in and of itself, be goodwill. There must be evidence shown that consumers were attracted to the Plaintiff s product. The Court held that beyond the sales, there was scant evidence adduced that showed that the Plaintiff s product had any attractive force. The Plaintiff referred to the use of marketing materials but this again was held not to be sufficient to establish attractive force. In addition, the Court held that there was insufficient evidence of damage. In order to make out damage for passing off, the Plaintiff had to show that there was either blurring of the Plaintiff s and the Defendant s goods, or tarnishing of the Plaintiff s product. Here, whilst the Plaintiff adduced evidence of a drop in sales from 2012 to 2013, the Court held that there can be many explanations for a drop in sales, misrepresentation by the Defendant being only one of the various possible causes. Thus, the invalidation on the grounds of passing off was also dismissed. iii) Invalidation on grounds of well known mark protection With regard to this ground of invalidation, this failed largely because the Plaintiff did not adduce sufficient evidence to prove that its mark was well known in Singapore. In this regard, no survey evidence was adduced, the sales information relating to sales in Singapore was limited, and the evidence of its distribution of marketing materials was also held to have fell short. Here, the Court emphasized that it was not sufficient to merely show that the Plaintiff's mark was "known"; it must be "well known". Comments The fact that the marks were registered in respect of identical goods was of significance in this case. Since both marks were applied to cigarettes, the degree of similarity between the marks inevitably gave rise to a finding of a likelihood of confusion.

What was more interesting was the Court's comments in relation to his analysis of the grounds of passing off. The Court commented on the need to show a certain "attractive force" before goodwill has been established, and it has previously been accepted that such "attractive force" can be established by showing substantive sales. As acknowledged by the Judge, any individual can decide to purchase a particular brand of products for a variety of reasons including "price and quality". However, could it not also be argued that such indications of price and quality are intrinsically linked to a brand which is recognized by a customer? It was also suggested that sales to ships may not be particularly compelling as customers there may not have had a choice. Nevertheless, could it not be that these customers, having been "forced" to purchase such a brand, may end up getting used to it and start looking for such brand even when a selection of brands is available? There is thus some concern that the Court may have raised the test for proving goodwill to level that is unduly onerous for a potential plaintiff. It remains to be seen the extent to which such requirements of proof will impact a case outside the context of an invalidation setting. ANGELINE LEE Principal Baker & McKenzie.Wong & Leow Challenges in protecting Shape Marks - Insights from the Nestle v. Petra Foods dispute over the Kit Kat shape mark The case of Societe Des Produits Nestlé SA and another v Petra Foods Ltd and another [2014] SGHC 252 saw the Singapore High Court consider the registrability and enforcement of shape marks under the Singapore trade mark regime in a landmark ruling. The appeal arising from the High Court judgment was just heard before the full five-judge Court of Appeal on 31 July 2015. The key issue being considered, was Petra Foods's attempt to invalidate Nestle's shape marks for the two-finger and four-finger shapes of its Kit Kat chocolate bars for non-registrability under the Trade Marks Act ("TMA"). Argument revolved around statutory exceptions that bar registration of shape marks. Under the Technical Result Exception, a shape cannot be registered where it consists exclusively of the shape of the goods which is necessary to obtain a technical result. The High Court identified that the essential characteristics of the shapes were the rectangular slab, the presence of breaking grooves, and the number of grooves and fingers, and that each of these features was necessary for a specific, though different, technical result. The rectangular slab was necessary for efficient manufacture; the breaking grooves for facilitating the breaking up of the chocolate bar; and the number of grooves and fingers to achieve the desired portion size. Thus, it was held in the High Court that the Technical Result Exception applied and Nestle's shape marks were vulnerable to invalidation. The Nature Exception applies where the mark consists exclusively of the shape which results from the nature of the goods themselves. On the facts, Nestle's shape marks were registered for "chocolate-coated bars and wafers". The High Court had found that there is no natural shape for a chocolate-coated bar or wafer and so the Nature Exception does not apply.

The Substantial Value Exception applies where the mark consists exclusively of the shape which gives substantial value to the goods. In applying this exception, the High Court considered whether Nestle's shape marks had such an eyecatching design as to give them substantial value and concluded that the taste and feel of the Kit Kat product depended on many factors, and its shape was but one of the considerations. Amongst the key points argued before the Court of Appeal was whether manufacturing process should be considered when deciding on the Technical Result Exception. Nestle argued that considerations of the manufacturing process necessary for achieving the shape should not be a relevant factor as the manufacturing process was distinct from any Technical Result that could be achieved by the shape itself. This was countered by Petra Foods' argument that if it is established that the shape was dictated by a function, the real monopoly is not over the shape but over the function and the technical solutions, which would be against public policy. Nestle also argued that the shape of its Kit Kat bars have acquired distinctiveness through years of use, and performed the function of a trade mark, as a badge of origin. However, Petra Foods disputed this, contending that Nestle's marketing of its chocolate bars has always focused on the name "Kit Kat", and not the shape of the bars themselves. Parties also argued over the extent to which results of a survey conducted by Nestle were helpful to its case. Whilst Nestle focused on the fact that the survey showed that members of the public would recognize the shape of its Kit Kat Product even without any marks imprinted on the shape, Petra Foods argued that the survey was flawed as it does not address the fact that at the point of sale, all members of the public are able to see is the wrapper along with the marks set out in the wrapper. The Parties' arguments rang of the age-old conflict between IP protection and market competition, each attempting to convince the Court that policy demands a ruling in their favour. The industry is awaiting eagerly for the judgment to be issued, hoping that the Court of Appeal will clarify the position on the registration of shape marks and scope of exceptions in Singapore. ANDY LECK / CHEAH YEW KUIN Managing Principal / Local Principal Baker & McKenzie.Wong & Leow Back to top Recognised by the IAM Patent 1000 We would also like to take this opportunity to announce our recent success at the

IAM Patent 1000 rankings for 2015. Baker & McKenzie.Wong & Leow and Wong & Partners were ranked for "Litigation and Transactions" in Singapore and Malaysia respectively. Andy Leck and Chew Kherk Ying and were also recognised in the individual rankings. IAM Patent 1000 ranks the leading private practice patent professionals and firms based on research involving 1,500 interviews with attorneys at law, patent attorneys and in-house counsel. In Asia Pacific the rankings also cover firms in Australia, China, Hong Kong, Japan, Taiwan and Thailand. The full online rankings are available here. Back to top Privacy Policy This e-mail was sent to: This e-mail was sent by name address city.state zip code www.bakermckenzie.com Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Before you send e-mail to Baker & McKenzie, please be aware that your communications with us through this message will not create a lawyer-client relationship with us. Do not send us any information that you or anyone else considers to be confidential or secret unless we have first agreed to be your lawyers in that matter. Any information you send us before we agree to be your lawyers cannot be protected from disclosure.