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Intellectual Property Indonesia, Malaysia and Singapore Intellectual Property Indonesia, Malaysia and Singapore IP Newsletter We are delighted to share with you the latest edition of our May 2015 Intellectual Property newsletter covering the latest 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) In This Issue Wong & Partners (Malaysia) Recent Developments In: Indonesia Malaysia Singapore Indonesia Latest News Minister of Law and Human Rights Regulation No. 29 of 2014 on the Guidelines of Application and Issuance of For more information, please Operational License and Evaluation of Collecting contact: Societies Kuala Lumpur Chew Kherk Ying Pursuant to the enactment of Law No. 28 of 2014 on Partner +60 3 2298 7933 Copyright ("Copyright Law"), the Ministry of Law and Human [email protected] Rights ("MOLHR") has issued Regulation No. 29 of 2014 on the Guidelines of Application and Issuance of Operational Singapore License and Evaluation of Collecting Management Society Andy Leck Managing Principal, ("Regulation No. 29"). Tel: +65 6434 2525 [email protected] The Copyright Law urges authors, copyright holders and Jakarta performers to be members of collecting societies in order to Daru Lukiantono manage and collect royalties from the commercial use of their Partner copyright and neighboring rights from the public. The Tel: +62 21 2960 8588 [email protected] Copyright Law indicates that collecting societies should be non-profit in nature and obtain operational licenses from the MOLHR by fulfilling certain requirements. In general, the Regulation No. 29 further specifies issues on establishment, issuance of operational licenses and evaluation of collecting societies. 1 Baker & McKenzie.Wong & Leow* www.bakermckenzie.com/Singapore Requirements for Obtaining Operational Licenses Hadiputranto, Hadinoto & Partners* www.hhp.co.id To obtain operational licenses, collecting societies should (i) be in form of Indonesian non-profit legal entity; (ii) obtain Wong & Partners* authorizations from authors, copyright holders or performers www.wongpartners.com to collect, gather and distribute royalties; (iii) represent at * Baker & McKenzie.Wong & Leow, least two hundred songwriters, or fifty members of performers Hadiputranto, Hadinoto & Partners or other copyright holders (e.g. book authors); (iv) have a and Wong & Partners are member clear objective and capabilities to collect, gather and firms of Baker & McKenzie International in Singapore, Indonesia distribute royalties. and Malaysia respectively Aside from satisfying the above requirements, the collecting societies should submit their written applications for licenses to the MOLHR by enclosing supporting documents, e.g. Deed of Establishment and Articles of Association, Powers of Attorneys from their members, list of members and the works that they are managing. Upon review of the application, within 14 working days as of the submission date, the MOLHR will issue the operation license if all requirements are met. National Collecting Societies The Copyright Law requires establishment of two National Collecting Societies ("NCS"), which is one representing the authors' interests, while the other representing the interests of the neighboring rights owners (e.g. performers). These two NCS should become parent organizations for local collecting societies in the field of song and musical works. Aside from collecting and managing royalties for their members, the NCS have obligations to (i) establish code of ethics for their members; (ii) supervise their members; (iii) give recommendations to the MOLHR for sanctions against ethical violations by their members; (iv) give recommendations to the MOLHR on the licenses of collecting societies whom they coordinate; (v) set up guidelines, procedures and system in distributing and calculating royalties; (vi) conduct mediation for any copyright and neighboring rights disputes; (vii) provide reports to the MOLHR. The MOLHR just recently appointed 5 commissioners of the NCS for Composers, and 5 other commissioners of the NCS for Neighboring Rights. The above commissioners would have a term of 3 years and may be appointed for an additional 1 year. According to the press release, the NCS will have the duty 2 and task in line with the Copyright Law and Regulation No. 29. Evaluation of collecting societies The MOLHR will conduct evaluations of every collecting society and NCS at least once a year. For such purpose, every collecting society and NCS should prepare performance and financial reports as audited by a public accountant (at least once a year). The audited reports must be submitted to the MOLHR at least within fourteen days after the audit is done, and the result should be announced in national printed or electronic media. The MOLHR can revoke the operational license of a collecting society or a NCS if: (i) the form of its legal entity has changed to a profit oriented entity; (ii) it does not distribute the royalties to their members; (iii) it can no longer meet the minimum member requirements; (iv) it does not carry out coordination with similar collecting society or NCS in setting up amount of royalty; (v) it does not provide audited reports as required; (vi) it does not announce the audited report; (vii) it uses more than 20% of its operational funds after its first five years and/or uses more than 30% of its operational funds within its first five years, which fund is gathered from the total of royalties collected annually. DARU LUKIANTONO / WIKU ANINDITO / ARTNA BTARI Partner / Associate / Associate Hadiputranto, Hadinoto & Partners Malaysia The Legal Concerns over M-Commerce In today's day and age, consumers own at least one mobile device. According to the Malaysian Communications and Multimedia Commission (MCMC), Malaysia's mobile penetration rate in 2014 is at 143 percent, the highest rate thus far. The usage of mobile devices has increased significantly in the recent years to the extent that transacting online for day-to-day activities is becoming a norm. The signs of growth of the Malaysian mobile commerce (m- commerce) industry are clear. For instance, major mobile telecommunications companies (telcos) in Malaysia have made inroads into m-commerce in recent years--through 3 acquisition of online classified company, investment in mobile payment gateway, and the launch of several m- commerce sites. The Malaysian central bank has also taken steps in a similar direction with the launch of a mobile payment and banking service in 2013, which connected the three largest banks in Malaysia with all major telcos to offer mobile inter-bank funds transfer. Given such trends, businesses that fail to provide consumers with the option and convenience of mobile or online purchases, whether through applications or websites, run the risk of falling behind. Mobile apps may not only be used as a medium for sales and purchases, but may also be used as a platform for advertising and promotion. However, businesses must consider the legal and regulatory risks before riding the m-commerce wave. As a starting point, arrangements and collaborations with appointment of third-party app developers must be reviewed carefully. Businesses need to clearly define the extent of assistance required and with the creation of such apps, IP issues need to be dealt with. Ownership of any background or new IP should be agreed to by the parties at the outset, and any necessary licensing arrangement needs to be provided for. A third party escrow provider may also need to be appointed if the developer wishes to retain background IP, and if the business is concerned that there is risk of the developer ceasing business, making the software no longer accessible and hence rendering the app useless. Businesses may also want to consider whether or not it requires maintenance services and upgrades. In addition to contracting issues, businesses must also be aware of consumer protection laws, privacy laws and other regulations which may impact the way the app is presented to consumers and the terms on which good and services may be sold. In Malaysia, the Consumer Protection Act 1999 dictates that certain contract terms are considered unfair and will be considered void, while the Consumer Protection (Electronic Trade Transactions) Regulations 2012 requires that certain procedures are complied with when supplying goods or services online. Such laws and regulations vary across jurisdictions and it is imperative that businesses ensure that they comply with the relevant laws in all applicable jurisdictions. CHEW KHERK YING / CHEN HONG SZE Partner / Associate Wong & Partners ------------------------------------------------------------------------------- 4 Malaysian Court of Appeal Clarifies Trade Mark Use The use of a trade mark is of central importance under trade mark law. The first use of a trade mark may confer first ownership. Establishing the use of a trade mark is also important to mitigate the risk of expungement proceedings due to non-use and forms one of the key conditions to be satisfied in a trade mark infringement action. In the recent case of Mesuma Sports Sdn Bhd v National Sports Council of Malaysia v Trade Marks Registrar of Malaysia in September 2014, the Court of Appeal clarified and confirmed that the use of a trade mark "in the course of trade" was not limited to
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