In today’s commercial environment, many Malaysian businesses operate as licensees of foreign brands rather than as brand owners. In particular, licensees frequently overlook whether the licence provides sufficiently wide and enforceable rights to justify their investment in local marketing, distribution, retail infrastructure and brand development. This gap commonly becomes critical when trademark infringement arise and the Malaysian licensee discovers that they have only limited practical ability to protect the brand locally.
In Malaysia, the position of trademark licensees is governed primarily by sections 69, 70 and 71 of the Trademarks Act 2019, which regulate the registration of licensees, the rights conferred on licensees and the manner in which those rights may be exercised. These provisions determine whether, and to what extent, a licensee is legally entitled to enforce the trademark against infringers.
Where infringement of the licensed trademark occurs in Malaysia, the ability of a licensee to take legal action depends on whether the licence qualifies as an exclusive or non-exclusive licence under the Act. Under section 71 of the Trademarks Act 2019, an exclusive licensee whose licence is in force is entitled to bring infringement proceedings in its own name against any person other than the registered proprietor, without having to rely on the proprietor to commence proceedings.
In the case of a non-exclusive licensee, sections 70 require the licensee to first call upon the registered proprietor to commence infringement proceedings. If the registered proprietor fails to take such action within two months after being so called upon, the non-exclusive licensee may then bring infringement proceedings in its own name, as if it were the registered proprietor, subject to the procedural requirements prescribed by the Act.
The distinction between exclusive and non-exclusive licensing has direct and material consequences for licensees engaged in cross-border brand distribution in Malaysia. Where a licensee operates under a non-exclusive licence structure, it remains commercially exposed but legally dependent, at least in the first instance, on the foreign brand owner to enforce the trademark locally.
Pursuant to section 69 of the Trademarks Act 2019, both exclusive and non-exclusive licensees may record their licences with Intellectual Property Corporation of Malaysia (MyIPO) by filing Form TMH2. Once recorded, the licensee is reflected on the Malaysian Trade Marks Register as a registered licensee. Although recordal does not create the licence, it provides official recognition of the licensee’s status and, in practice, enables the licensee to submit complaints to online platforms and relevant authorities in its own capacity, thereby facilitating and expediting takedown and enforcement action against infringing activities in Malaysia.
Conclusion
Business owners and brand operators are advised to clearly understand their licensing rights and enforcement position at the negotiation stage, so that the scope of the licence and the rights secured will meaningfully support future brand enforcement and make infringement action easier and more effective in practice. A properly structured and recorded trademark licence is a practical enforcement tool, not merely a commercial formality.
Should you require professional advice on the issues discussed in this article, or on any other trademark or brand-licensing matters in Malaysia, please contact Flexly IP for assistance.
