Chapter 6: Intellectual Property on Internet

COPYRIGHT LAW

• Copyright is defined as a right to authorise the use of one’s work in different ways.
• The emphasis is not so much on the right to copy but on the right to prevent others from unfairly
taking advantage ownership of the original owner of the copyright.
• No specific system of registration for copyright in Malaysia so it is important to carefully document
the creation of any work and the ownership of copyright in it.
• It is prudent, though not compulsory, to affix a copyright notice on any copyright work.
• May also elect to affirm an affidavit or statutory declaration before a Commissioner for Oaths. Such
an affidavit or statutory declaration shall be admissible in any proceedings under the Act and is prima
facie evidence of the facts stated in it.
• Section 26A, 26B, 26C of CA 1987

Law in Malaysia
• Copyright Act 1987 (CA).
• Under the Act, copyright will subsist in a work if it:
• Is original;
• Is reduced to material form;
• Belongs to one under categories of protected works; and
• Complies with the qualifications for copyright.
• Section 7(1) CA1987
• The kinds of works protected under copyright law are:
• Literary works - including books, pamphlets, plays, drama, scripts, articles, letters,
reports, memoranda, tables and compilations, computer programs;
• Musical works;
• Artistic works - including paintings, drawings, diagrams, maps, charts, engravings,
photographs, sculptures, works of architecture, works of artistic craftsmanship;
• Films;
• Sound recordings; and
• Broadcasts.
• Section 7(2) CA1987
• Works shall be protected irrespective of their quality and the purpose for which they were
created.
• Section 7(2A) CA1987
• Copyright protection shall not extend to any idea, procedure, method of operation or
mathematical concept as such.
• Section 7(3) CA1987
• A literary, musical or artistic work shall not be eligible for copyright unless-
• sufficient effort has been expended to make the work original in character; and
• the work has been written down, recorded or otherwise reduced to material form.

• Section 10 CA1987
• Copyright shall subsist in every work eligible for copyright of which the author or in the case of a
work of joint authorship, any of the authors is, at the time when the work is made, a qualified
person.

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Infringement
• Section 36 of CA 1987
• The copyright in a work is infringed when a person other than the copyright owner or his
licensee, does or authorizes any of the following acts:
• Reproduces in any material form, performs, shows, plays or distributes to the public,
communicates by cable or broadcast the whole work or a substantial part of it, either in
its original or derivative form or
• Imports any article into Malaysia for the purposes of trade or financial gain, when the
person knows or ought reasonably to know that the making of the article was done
without the consent or licence of the copyright owner.
• Either the whole or a substantial part of the copyrighted work must be copied for the copying to
amount to infringement.
• The originality of the part or parts taken must be proven in order to establish that a substantial part or
parts had been copied.
• Spectravest, Inc. v. Aperknit Ltd. (1998) FSR 161
-it was held that “to determine liability, one should identify the part taken and separate from the
defendant’s work and find out that originality of the part taken. It should also be shown that the
defendant’s object in taking and using the part concerned is the same as that of the plaintiff’s, and the
part taken is used by the defendant in a way which interferes with the sales of the original or
competes with it”
• The New Straits Times Press (M) Bhd & Anor v Admal Sdn Bhd [2013] 6 MLJ 405
Issues: a claim on the copyright over a concept paper called ‘ Nst- Spell it Right’, which was said to
reduce into written form the concept and rules of an English spelling competition

Facts: this is an appeal to the COA arose from a decision of the High Court where the respondent,
Admal Sdn bhd, succeeded in its claim that the appellants, New Straits time Press(M) and RHB bhd,
had infringed its copyright in the concept paper “ NST- Spell it RIght” by running an English spelling
competition known as “NST-RHB Spell It Right” The court Adopted the originality test from the
High Court case of Kiwi Brands sdn bhd v Multiview Enterprises Sdn Bhd, that (a) THe originality
which is required relates to the expression of thought and the work should not be copied from another
work but rather should originate from the author; and (b) a compilation of information is
copyrightable although the information is not original.

Held: Upon considering the facts, the COA found that the concept paper was ineligible for copyright
protection as it was nothing more than a mere compilation of already existing information that has
been widely available in the public sphere for ages. Therefore, the concept paper has failed to claim
for originality under the test in Kiwi Brands. Thus , not qualify for copyright protection.

• Autodesk Inc v Dyason (1991-92) 22 IPR 163

- Fact: Autodesk created software called AutoCAD for architectural and engineering design and
planning program. Key and lock system called “widget C” and device “Auto CAD lock “ was
incorporated to prevent unauthorised copying of the program. Dyason discovered AutoCAD lock
system and decided to produce its own key naming it “Autokey for AutoCAD’s Lock” Dyason sold
this program for one lessen quarter of the price, giving consumers the Autodesk’s software the access
without paying the usual fee. Subsequently, Autodesk sued Dyason for infringing copyright laws
when copying their “AutoCAD Lock” system.

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 -Issues: whether the program was in part contained in the AutoCAD lock; whether the autokey was
thereproduction in material form or merely an adaption of the Auto CAD program.

-Held: Dyason was reproducing the substantial part of “widget C”, thus dyason reproduction is
equivalent to reproducing essential part of the widget c without Autodesk licensing, therefore
constitute infringement of right.
• Section 41 of CA1987
• Legal remedy or relief against copyright infringement generally takes the form of fines or
penalties and/or imprisonment upon conviction.
• Section 13(2) of CA1987
• Defence(s) to a claim of infringement
• Read this: Copyrights Law and Regulation by International Comparative Legal Guides (ICLG)
Home-practice area-copyright-Malaysia

Issue of copyright law and the internet

• Section 36A of CA 1987
• Circumvents or causes another to circumvent any effective technological measures that are
employed by authors to restrict acts in relation to their works that they have not authorized.
• Section 36B of CA 1987
• Information which identifies the work, the author, the owner or information about the terms and
conditions of use of the work in an electronic form.
• The unlawful removal or alteration of any electronic rights management information, and the
distribution or importation of works or copies of works knowing that such information has been
removed or altered.
• For online materials, copyright infringement may involve the Internet Service Provider (ISP) if the
ISP had facilitated the infringement.
• If an ISP had exercised the reproduction rights of the copyright owner without consent, the ISP may
be guilty of direct infringement.
Religious Technology Centre v Netcom Online 907 F. Supp. 1361 (1995)( Liability of ISP)
Issues: whether the operator of a computer bulletin board Services(BBS) and internet Service
provider that allows BBS to reach the internet should be liable for copyright infringement committed
by a subscriber of the BBS.

Held:Storage on a defendant's system of infringing copies and retransmission to other servers is not a
direct infringement by the bulletin board service operator(BBS) of the exclusive right to reproduce
the work where such copies are uploaded by an infringing user
#However, if RTC could prove that Net com had knowledge of the infringing activities, netcom could
be liable for contributory infringement since its failure to simple cancel Erlich’s .
The court held that Netcome could not completely relinquish control over how its system could be
used, if Netcom could take simple measures to prevent further damages to RTC copyright, he will be
therefore liable as substantial participation.
Claim for vicarious liability could succeed if : (1) the defendant has the right and ability to control the
infringer’s act (2) receives a direct financial benefit from the infringement. In this case, netcom could
not possibly screen message before they were posted and they never exercised control over the
content of users’ posting. There is no evidence shows that Netcom receive any direct financial
benefit from the infringers. Therefore, could not prove vicarous liability.

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 Sega Enterprises v. Maphia 857 F. Supp. 679 (N.D. Cal. 1994)
Fact:The defendants in this copyright and trademark infringement case operated an electronic bulletin
board service called “MAPHIA” which allowed for, and actively encouraged, the upload and
download of unauthorized versions of copyrighted Sega video games. Sherman, the owner and main
operator of MAPHIA, profited from those services by selling game copiers which allowed for game
play. Moreover, the court found that many of the games were located in files on defendants’ computer
bearing the name Sega, and the SEGA trademark also appeared when a Sega game downloaded from
the bulletin board was run.

Held: the court held that there is no direct infringement to the copyright based on the case of
Religious technology v Netcom, but the court had discovered that Sherman is liable for contributory
infringement as he has the knowledge of the users infringing activity and Sherman has materially
contributed to their infringing activity.

• If an ISP had financially gained from the infringement by another party and had the right to control
and supervise the infringement, the ISP may be guilty of vicarious infringement.
• If an ISP is found to have knowledge of the infringing activity and intentionally participated in it, the
ISP may be guilty of contributory infringement.
• Sections 43B to 43I set out the responsibilities of ISP
• Section 43H of CA 1987
• Copyright owner to notify an ISP of any infringing materials and to require such materials to be
removed or that access to it be disabled by the ISP.
• However, the provider of the removed material is equally given the right to serve a counter-
notification on the ISP. Upon receipt of the counter-notification, the ISP is required to restore the
material or access to it within ten days, unless the issuer of the notification informs the ISP within
the ten-day period that an action has been filed for an injunction to restrain the issuer of the
counter-notification from infringing his copyright.
• Section 43C to 43E of CA 1987
• Exempt a service provider from liability for copyright infringement
• One of the issues in relation to Sections 43B to 43I is the scope of the term “service provider”.
• The definition provided in Section 43B is wide enough to encompass internet service providers as
well as any person who provides or operates facilities for online services or network access.

TRADEMARKS

• Connect between person selling/servicing and good/service

Law in Malaysia
• Trade Marks Act 1976 (TMA) and Trade Mark Regulations 1997
• common law of passing off -only adopted when trademark act is insufficient
• Party to the Paris Convention and is also bound by the TRIPs Agreement
• Section 3(1) TMA1976
• Trade marks law in Malaysia is territorial in nature.
• Section 14(1) TMA1976
• Prohibition on registration of TM
• Section 35 TMA1976
• registered proprietor exclusive right

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Trademark infringement
• The Act will favour the registered proprietor or registered user.
• Section 38 and 39 TMA1976
• What constitute to infringement of TM
• Section 70B(1) TMA1976
• Applies only if the conflicting trade mark is used on the same goods or services as that of the
well-known trade mark.

DOMAIN NAME

• An alias for a large & unique number called the internet protocol address which corresponds to the
computer which stores the digital information
• Registered by central registry, ICANN (Internet Corporation for Assigned Names and Numbers)
• The registry can provide only one user with a particular domain name
• Types:
• Generic top-level domains
• .Com, .Net & .Org (charitable org)
• Specialised domains
• .Gov (government), .Mil
• Country top-level domains – country of registration
• .My (malaysia), .Sg (singapore)

Domain Name dispute(first come first serve basis)

• Trademarks are protected within a defined territory
• Trade mark law allows 2 companies to own same trade mark but in respect of different products and
services offered
• Disputes can occur because only one user can register a particular name – impossible for 2 persons to
share the domain name
• However, a registered owner can release its rights over its domain name
• When trade mark is present in the domain name, one person can be the trade mark owner and another
person can be the domain name owner/user of the same goods/services
• Cyber-squatting: defined as the registering, sale or use of a domain name containing a trademark that
the registrant doesn't have the rights to with the intent to profit from the goodwill of the mark.
• Types:
• Speculative
-registering word/ phrases cyber-squatters hope will be sought after by new companies
or business
• Innocent
-infringes trade mark based on some unrelated interest in the word itself, without
intending harm to trade mark owner.
• Concurrent
-registrant uses the same trade mark as another commercial entity, but not within a
competing industry
• Modern day extortion

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 -An illegal cyber-squatter should be one who acquires a domain name for the sole
purpose of obtaining money or other advantage from the trade mark owner, with no
intent or desire to use the domain name, except as an instrument toward this purpose
-applied when the moment they want money, or they use the domain name to obtain
advantage.
• When cyber-squatters register trade marks as domain names, trademark owners are
prevented from:
• Registering its own trade mark as a domain name
• Establishing web sites using their own marks

• British Telecommunications & Ors v One in a Million [1998] 4 ALL ER 476

Fact: the appellants were dealers in internet domain names, specialising in registering
names identical or similar to the names of well-known companies without their
consent.(E.g Marks &Spencer, Sainsbury’s , Virgin) British Telecommunication and
Ladbroke Group were registered by the appellants who wrote to the various
companies whose name or mark featured in particular domain names, offering them
for sale.

Held: COA dismissed on the ground that the domain name were registered to take
advantage of the distinctive character and reputation of the marks which is unfair and
detrimental. The court further clarified that the mere sale of a domain name, which is
confusingly similar to a registered trademark, represent an infringements. Liable for
passing off.

Panavision International LP v Toeppen 140 F 3D 1316 (9TH CIRCUIT, 1998)

Fact: Plaintiff Panavision is the owner of the marks PANAVISION and PANAFLEX in
connection with theatrical motion picture and television camera and photographic
equipment. Toeppen registered the domain names "panavision.com" and "panaflex.com."
He did not use either domain name in connection with the sale or promotion of any goods
or services. Toeppen's "panavision.com" website displayed an aerial view of Pana, Illinois,
and the "panaflex.com" website contained only the word "hello." When Panavision
requested that Toeppen relinquish the "panavision.com" domain name, Toeppen demanded
$13,000 from Panavision.

Held:On appeal, Toeppen claim that the Appellate court does not have jurisdiction over
him because he reside outside California(Pana,small city in Illinois U.S.). The court found
that defendant's scheme to extort money from plaintiff prevented plaintiff from using its
own trademark as a domain name to establish a website easily located by Internet users,
unless plaintiff paid his fee. According to the court, this extortion scheme constituted the
"something more" required to justify the imposition of personal jurisdiction in cases where
jurisdiction is predicated on Internet contacts because it showed that defendant did more
than merely register another's trademark as a domain name and post a website. The court
further determined that plaintiff's cause of action arose out of defendant's forum-related
activities, and that the exercise of jurisdiction was reasonable where defendant failed to
present a compelling case negating reasonableness.

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 Inc v Toeppen 947 F.SUPP.1227 (ND III.1996)
• Uniform domain name dispute resolution policy (UDRP)
• UDRP was created following recommendations by World Intellectual Property
Organization (WIPO).
• To provide a fast, efficient and cheaper procedure for resolution of disputes between
trademarks owners & domain name speculators.
• Complainant must prove 3-fold test:
(1)Domain name in dispute is identical or confusingly similar to a trade mark or service mark in
which the complainant has rights; (2)The registered owner has no rights or legitimate interests
in the domain name; and The domain name been registered and being used in bad faith.
• Remedies:
• Cancellation of domain name
• Modification
• Transfer
• Volkswagen Group Singapore Pte Ltd v Webmotion Design (Case No.
rca/dndr/2003/01(int))
Fact: Domain name in dispute in the case was “volkswagen.com.my” which was initially
registered by Willy Marketing(‘WM”) the complainant issued a cease and desist letter to WM.
Subsequently, the domain name was re-registered by the respondent. The complainant
contended that the domain name in question was identical to the trade mark owned and
registered by the complainant, hence, the respondent ‘s use and registration of the domain name
was illegitimate.

Held: the panel found that the distinguishing and relevant part of the domain name was the term
“ volkswagen” which was identical to the complainant’s trade mark. The respondent had failed
to establish any right or legitimate interest in the domain name. The complainant also succeeded
in proving bad faith on the part of the respondent. The Panel directed the domain name to be
transferred to the complainant.