ARE BRANDED FUNERAL GOODS COUNTERFEITS?

At first glance, Chan seems an unassuming man. Most days, you’ll find him sitting in his workshop, toiling away in his sweat-stained singlet and olive-green shorts. In fact, Chan is a maker of luxury goods, and his small poorly lit workshop is filled to the brim with the must-haves of the day. The latest Apple products, designer bags and shoes, flatscreen TVs, European sportscars, and hanging from the ceiling, the workshop’s crowning glory - a Boeing 787 Dreamliner. They are all fakes of course, and perhaps in more ways than one. And don't even bother asking Chan about after sale services.

Yes, the LV bags, the Gucci heels, and the Bugattis you've been sending to granny are fakes, not just because they're made of paper and bamboo, but they could also be considered as counterfeit goods. In 2011, A New York Chinatown shopkeeper was arrested for selling “counterfeit” Burberry, Gucci, and LV “bags” meant for funeral offerings. In 2016, GUCCI sent warning letters to several Hong Kong funeral goods shops for using selling GUCCI branded “bags”, before it was forced to apologise for not being sufficiently sensitive to the local cultures.

So what’s the legal position in Malaysia in relation to these branded funeral goods? Under the Malaysian Trademarks Act 2019, these products may be considered (i) infringing goods, and/or (ii) counterfeit goods. While all counterfeit goods are infringing goods, not all infringing goods are counterfeit goods. The difference is crucial as the making and selling of counterfeit goods is a criminal offence which can come with a hefty fine (up to RM 1million) and can also land one in prison for up to 5 years.

Infringing Goods

Under the Section 54 of the Malaysian Trademarks Act 2019, there are 2 ways in which you can infringe a registered trademark.

Firstly, a person is said to have infringed a registered trademark if “he uses a sign which is identical with the trademark in relation to goods or services which are identical with those for which it is registered, in the course of trade, without the consent of the registered proprietor.”

Secondly, a person is said to also have infringed a registered trademark if, “without the consent of the proprietor of the trademark, he uses in the course of trade a sign— (a) that is identical with the trademark and is used in relation to goods or services similar to those for which the trademark is registered; or (b) that is similar to the trademark and is used in relation to goods or services identical with or similar to those for which the trademark is registered, resulting in the likelihood of confusion on the part of the public”.

Here’s a quick example of how that works. If GUCCI has registered its “GG” logo as a trademark in Malaysia for handbags, I would have infringed GUCCI’s trademark if:-

(i) I made or sold handbags bearing an identical “GG” logo;

(ii) I made or sold similar products (e.g. paper bags) bearing an identical “GG” logo, and consumers mistakenly think my products are made/licensed by GUCCI; or

(iii) I made or sold handbags bearing a similar logo (e.g. “GC”), and consumers mistakenly think my products are made/licensed by GUCCI.

In Chan’s case, his products would be considered infringing goods, if the trademarks that appear on them are registered for paper products (fairly likely) or if the consumers somehow mistake his products as those that are made/licensed by the trademark owners (not as likely).

Counterfeit Goods

Under Section 6 of the Malaysian Trademarks Act 2019, a product is considered “counterfeit goods” if it is branded with a registered trademark without the consent of the trademark owner and the product is falsely represented as a genuine product of the trademark owner.

Basically, counterfeit goods are infringing goods that are made with the intent to trick the public into thinking that they are the genuine article. A simple example would be me selling you a near or exact replica of a Burberry bag.

Chan’s products are unlikely going to be considered counterfeit goods as there is a general understanding that his products are fakes, in the sense that they are not meant to be used (at least not by the living) and that they are not the genuine article. Unless of course these brands plan to add funeral goods to their offering. But for now, Chan isn’t overly worried, with the Qingming festival around the corner, all his goods will go up in flames, and it will be up to the lawyers down there (I heard there are many) to sort it out.

IS NFT COPYRIGHT?

Several days before the Full MCO came into effect in several states, artist Mark Winkelmann’s digital artwork made history for fetching $69 million at an art auction. It’s not uncommon for art pieces to command such eye-watering prices but what was notable about this auction was that the artwork that went under the hammer was a piece of NFT art which was paid in cryptocurrency. Closer to home, we have artists like Red Hong Yi and Katun who have also sold their NFT art for more than a tidy sum.

What are NFTs, and how are they related to digital artwork?

For starters, NFT stands for Non-Fungible Tokens. NFTs are non-fungible because they are unique and irreplaceable. For example, the Mona Lisa is non-fungible because there’s only one of it, and since Leo bit the dust 5 centuries ago, we can hardly expect him to paint another one. Conversely, money, like the Malaysian Cabinet, is fungible because it is not unique and easily replaceable, e.g.- the wrinkled 1 Ringgit bill in your back pocket is, for all intents and purposes, identical and replaceable with any 1 Ringgit bill currently in circulation.

NFTs are based on the blockchain technology, which is the same technology that makes cryptocurrency secure. Like cryptocurrency tokens or cryptocoins, each NFT is unique whereby no two NFTs are identical, and at any point of time, everyone knows who owns which NFT and which NFT has been transferred from one person to another. Because of this unique nature of NFTs, some very smart people have begun to use them as digital certificates to represent ownership of assets.

Now, in relations to digital artwork, while no one will question your ownership of the brick with the word ‘SUPREME’ on it proudly displayed in your man cave, folks may not really believe that you own the Nyan Cat GIF just because you have a copy of it in your hard drive. The reason for that is that all digital artworks are easily reproduced and downloaded.

NFTs solve this problem by allowing a digital art to be linked to a particular NFT so that a verifiable (and arguably unforgeable) digital ledger is created where each transfer of ownership and/or each license is recorded for posterity. In other word, NFT serves as a digitised provenance.

Since NFTs can do all these things, are they then a substitute for copyright?

Actually, no.

What makes a piece of art valuable? There’s the quality of the work, the material used, the fact that it was made by so and so…but if you really think about it, the main factor dictating the number of zeros on a price tag is scarcity! And for digital art, scarcity is a real problem as there is practically no limit to the number of copies of the digital art which can be sold. Once your digital artwork is downloaded by someone else, how do you stop the downloader from selling more copies of your artwork? This is where copyright comes in.

Copyright are rights that belong to creators and owners (who may be one and the same) of a creative work, such as literary works, musical works, artistic works, films, sound recordings, and broadcasts. In Malaysia and many other countries, copyright is an automatic right which comes into existence upon creation of the work. And as the copyright owner, you have the exclusive right to control the reproduction and distribution of your work. You are given the rights to create as many or as few copies of your work as you would want, which basically give you the rights to create scarcity!

It may surprise you, but most NFTs are sold without the corresponding copyright to the work, even if you’ve paid $69 million! Instead, most buyers of NSTs are given a license to use or display the digital artwork while the creator retains that right to make more copies if they so wish. Some NFTs even come with the condition where the creator earns royalties for subsequent resales of the NFT. And all this licenses and agreements are made possible because of copyright.

Not everyone’s sold on the NFT hype though. Detractors point out that NFTs have no true value since you can just save a copy of an NFT artwork without buying the NFT or that the NFT bubble is one that’s about to burst.

Time will tell if NFTs are here to stay or just a fad that will die out in a couple of years' time. Given their diverse application, not just for digital artworks but for other digital objects like tweets, memes, videos and music. In spite of this, it’s undeniable that they’re a useful tool which helps artists to get their work out there, while helping them to monetise their creation and granting them a better leverage to assert their copyright. It's safe to say that NFTs are a useful and valuable complement to copyrights.

So, should you jump onto the NFT bandwagon? That’s for you to decide. But if you have copyright-related questions that need answering, why not give us a holler? After all, we’re here to help.

Can I Get A Patent For That, Please?

The question of what can and cannot be patented is not as straightforward as it appears, especially if it is not a device with buttons one could poke at.

Consider the following and ask yourself if these can be patented in Malaysia:

1. Your grandmother’s recipe for deep-fried bitter gourd chips

2. The cure for Covid-19

3. An algorithm that assesses the trustworthiness of a person based on their appearance and assigns a score to that person

4. A mobile application

5. A nutritional supplement containing extracts from superfood A, folk remedy plant B and snake oil

6. The shape of an aircraft part

If you said yes, no, maybe, or ‘I’m not sure’ to any or all of the above, read on.

Patents are granted for "inventions" - any solution to a problem that is practicable in any field of technology. So it follows that you cannot patent a word, the appearance of an object or a type of plant. Other forms of IP protection, namely trade marks, industrial designs and plant variety protection are available to cover these types of intellectual property.

Additionally, just because you invented something, it does not mean that your invention automatically qualifies for a patent. The invention must be new, meaning that no other such invention already exists in the world; inventive, meaning that the invention is not obvious to a person in the same industry; and industrially applicable, meaning that it can be made or used in any industry.

While you can get a patent for a device, composition, medicament, process, method, or system, there are some things that cannot be patented. These are:

1. Discoveries, scientific theories and mathematical methods.

2. Plant or animal varieties or essentially biological processes for the production of plants or animals. These do not include man-made micro-organisms and related processes/products.

3. Schemes, rules or methods doing business, performing purely mental acts or playing games.

4. Methods for treatment of human or animal body by surgery or therapy.

5. Inventions that are contrary to public policy or morality.

Now that you know this, would you be able to determine if the earlier listed subject-matters are patentable? Let’s find out:

Your grandmother’s recipe for deep-fried bitter gourd chips

Maybe your grandmother’s deep-fried bitter gourd chips taste so heavenly, they immediately resolve disputes between quarrelling family members because everyone would be so preoccupied with consuming the chips that they forget their quarrels. As amazing as these bitter gourd chips may be, the recipe and finished product do not solve a problem in a field of technology so they are not patentable. Food processing methods that improve shelf life or preserve foods without affecting taste, however, can be the subject of a patent.

The cure for Covid-19

If the cure relates to a method, that method is not patentable. Do note that in some jurisdictions such as the US and Australia, medical methods are patentable subject matter. But any medicines, devices or chemical compounds that can be used to treat Covid-19 or any other illness can be patented.

An algorithm that assesses the trustworthiness of a person based on their appearance and assigns a score to that person

Algorithms are mathematical methods, so they cannot be patented. What can be patented, however, are devices or methods that utilize these algorithms to create a real and tangible result.

A mobile application

A mobile application is essentially a set of instructions that tells a device to perform certain operations (If A>B; then LOOKUP(D3:D24); Else…) so mobile applications and software in general are not patentable. What can be patented instead are inventions that are realised using such software which interacts with the hardware to produce a tangible result.

A nutritional supplement containing extracts from superfood A, folk remedy plant B and snake oil C

Mere combinations of natural products are not patentable, so good luck trying to patent a concoction of tongkat ali, maca root and dragon’s blood extracts without lab results proving its efficacy. In order for such supplements to be patentable, they must i) solve a problem in a field of technology and ii) demonstrate that the combination has synergistic/unexpected effect.

The shape of an aircraft part

If the shape of the aircraft part is purely ornamental and does not solve a problem then that shape is not patentable, but if the shape is functional and creates a special effect, e.g. causes mircoturbulent flows to reduce overall drag forces then the shape may be patented. Do note that unlike industrial design registration, the shape cannot be claimed in a graphical manner so the written description and claims must clearly define the shape that is claimed.

But what about gene-editing therapies, perpetual motion machines, deceased persons chatbots, MLM schemes, plastic-eating bacterium and AI inventions? Can these be patented? Granted, the given examples are not representative of everything under the sun that one would consider patenting, but hopefully, you now have a general idea of what can and cannot be patented. If you are ever unsure of whether you have a patentable invention, why not give us a holler? After all, we’re here to help.