Sponsored briefing: Integrating and exploiting technology in our business activities

RDS Partnership discusses how the covid-19 pandemic has played a significance in exploiting and integrating technology in the legal sector.

One of the main lessons learned from the global lockdown is the significance of integrating and exploiting technology in our business activities. This applies to the legal field as well, where lawyers have had to adjust to the new reality of making arguments in front of a monitor and looking at a camera, rather than addressing the judge face-to-face.

The courts in Malaysia have also adapted to the digital era by allowing virtual hearings and trials even during the initial stages of the pandemic. The legislative branch made a commendable move by quickly amending the Rules of Court 2012 to establish regulations and best practices for electronic communication in serving legal documents and remote communication technology in court proceedings. As a result, it is not surprising that while most of the world was on hold, the courts persevered in their duty to dispense justice.

Statutory interpretation whilst often perceived as elementary and trite, is frequently the key to unlocking the Gordian knot in disputes. A case in point was the recent Federal Court decision in Tan Kah Fatt & Anor,¹ where the interpretation of the term “issue” under theDistribution Act 1958 was fundamental to the appeal. The Federal Court acknowledged that the standard canon of construction has always been that the courts should, in usual cases, begin with the literal rule and that the purposive rule only ought to be relied on where there is ambiguity. Nevertheless, the recent trend of decisions seem to have taken a markedly different approach. In this recent case the Federal Court cited the decision ofBursa Malaysia Securities Bhd² in approval and held that the purposive rule of construction prevails over the literal rule of construction in the interpretation of a statute given section 17A of theInterpretation Acts 1948 and 1967.

The pandemic years also saw landmark decisions in the housing industry. Regulation 11(3) of the Housing Development (Control and Licensing) Regulations 1989(“HDR”) was declared ultra vires its parent law, the Housing Development (Control and Licensing) Act 1966(“HDA”), by the Federal Court in the case of Ang Ming Lee.³ This means that only the Minister of Urban Wellbeing, Housing and Local Government, and not the Controller of Housing, can make amendments to the sales and purchase agreement that is statutorily provided. The Court of Appeal supported this decision in the case of Bludream City Development Sdn Bhd,⁴ and the purchasers’ motion for leave to appeal to the Federal Court was dismissed. Another issue in the housing industry was the calculation of liquidated damages for late delivery of vacant possession, which was resolved by the Federal Court in the case of PJD Regency Sdn Bhd.⁵ The court ruled in favor of the homebuyers and held that the starting date for calculating liquidated damages was the date of the purchaser’s payment of the booking fee, and emphasized that the HDA should be interpreted in favor of the homebuyers as it is a social legislation. These decisions resulted in a surge of cases filed by homebuyers to claim liquidated damages alleging that their sales and purchase agreement (where the date for delivery of vacant possession exceeded the 36-month prescribed timeline) was void. This slew of cases before the Malaysian Courts for liquidated damages are currently awaiting the decisions of the Federal Court in the cases of Obata-Ambak Holdings Sdn Bhd⁶ and Vignesh Naidu.⁷

In the field of intellectual property, there were several important cases that reached the Federal Court. In Mohammad Hafiz bin Hamidun,⁸ the court clarified the meaning of “goodwill” and who owns it, stating that “goodwill” is a flexible asset that can be generated in various ways. In Ortus Expert White Sdn Bhd,⁹ the court reiterated principles on trademark comparison and held that disclaimers should not be disregarded in the comparison exercise.

Regarding parallel imports, the Federal Court’s decision in Guangzhou Light Industry & Trade Group Ltd¹⁰ narrowed the applicability of the defense of parallel importation, holding that goods intended for sale in a specific jurisdiction (outside Malaysia) may infringe trademarks if imported into Malaysia.

The YKL Engineering Sdn Bhd¹¹ case provided guidance on patent invalidation and copyright subsistence. The case dealt with practical aspects of patent invalidation and held that that prior arts relied on to invalidate a patent must be specifically pleaded, failing which may result in the litigant being deprived the ability to rely on said prior art in the invalidation action. The court also held that copyright law does not require a work to be new or unprecedented, but rather that sufficient effort has been expended to make the work original.

The trend of copyright owners taking a proactive approach in enforcing their intellectual property rights can also be discerned from the case of The Football Association Premier League Limited & 1 other.¹² In that case, the copyright owner had painstakingly taken steps to protect their intellectual property associated with the Premier League by registering the ASTRO and ASTRO Supersport’s logos, promos and other interstitials only for the defendant to screen Premier League matches at its restaurant bar on a set-top box without the requisite subscription. The High Court handed a judgment against the restaurant owner which serves as a reminder to the masses that copyright owners will not stand idle while their intellectual property is misappropriated.

On the topic of data protection, the Minister of Communications and Multimedia announced in August 2022 that a draft amendment bill to the Personal Data Protection Act 2010 has been prepared. The proposed amendments seeks to introduce, among others, a mandatory data breach notification obligations for data users, which will require data users to report data breaches within 72 hours, a new obligation on data users, where they will be required to appoint data protection officers and a new right to data portability for data subjects. Cybersecurity in Malaysia too may see some significant changes. It was announced in Parliament that a draft standalone Cybersecurity Bill to regulate cybersecurity matters in Malaysia is in the works and the Malaysian government aims to table the Cybersecurity Bill for parliament’s approval in July 2023.