MALAYSIA LAUNCHES INTELLECTUAL PROPERTY COURT

UNCLAS SECTION 01 OF 02 KUALA LUMPUR 001238

SIPDIS

SENSITIVE

SIPDIS

STATE FOR EB/TPP/MTA/IPC
STATE ALSO FOR EAP/MTS - J. KEITH, M. TAYLOR
STATE PASS USTR FOR B. WEISEL, D. BELL, J. GROVES
USDOC FOR JENNIFER BAKER
COMMERCE PASS USPTO FOR P. FOWLER

E.O. 12958: N/A
TAGS: ETRD KIPR MY
SUBJECT: MALAYSIA LAUNCHES INTELLECTUAL PROPERTY COURT



1. (SBU) Summary. After several years of anticipation, Malaysia
finally launched its new intellectual property court on July 17. The
new court system will include branches throughout Malaysia, though
the Kuala Lumpur branch will likely be the only significant IP court
in the near term. IP lawyers welcomed the new court's launch, but
worry that it could initially exacerbate delays in the adjudication
of existing IP cases, and they worry that judges and prosecutors
assigned to the new court will have limited IP expertise for the
foreseeable future. Although it will take time for the court to
build such expertise and to demonstrate that it will issue rulings
with strong deterrents, Malaysian officials are hopeful that
creation of the courts will help convince the U.S. to remove
Malaysia from the Special 301 watch list. End summary.


2. (U) Minister of Domestic Trade and Consumer Affairs Shafie pal
formally launched the Intellectual Property Court of Malaysia in a
ceremony on July 17 at Malaysia's new High Court Complex. The
launch followed Cabinet approval in June for the new court, which
has been a long-standing goal of Minister Shafie.


3. (SBU) The new IP court will consist of 15 sessions courts with
criminal jurisdiction, to be located in each of Malaysia's 14 states
plus the administrative capital of Putrajaya. Six high courts,
holding both civil and appellate jurisdiction, will be established
in Kuala Lumpur, Selangor (the state which surrounds KL),Johor,
Perak, Sabah and Sarawak. According to MDTCA Deputy Secretary
General Mohamedsha Mislam, the Ministry expects about 80 percent of
the new IP court system to be established by the end of 2007, after
a core group of Malaysian prosecutors and judges has finished
specialized training on IPR prosecution. Mohamedsha confirmed that
both judges and prosecutors will be dedicated solely to the various
IP courts, and will not be assigned non-IP cases.


4. (SBU) Several prominent Malaysian lawyers specializing in
intellectual property prosecution, while welcoming the establishment
of the new courts, have significant reservations about their
potential effectiveness, at least in the near to medium term. One
lawyer told econoff she doubts strongly the government's logistical
ability to set up such a large number of courts in so short a time.
Using the example that KL's new High Court Complex was built without
any space allotted for archiving of case files, she wondered whether
Malaysia's judicial bureaucracy could realistically design an
entirely new system capable of handling an anticipated heavy
workload. She added that that the new court is not expected to take
jurisdiction of pending IP cases in existing courts; while that
could ease the new court's burden, at least initially, it could also
cause further delays in the adjudication of the many existing cases,
if the few judges or prosecutors with relevant IP expertise are
transferred to the new court. Our contacts and MDTCA officials have
told us that there are over 1000 IP cases currently pending in
Malaysia's judicial system.


5. (SBU) Embassy contacts in the legal profession have told us they
expect the KL IP court to stand alone for at least a few months,
with other courts coming into existence over the next few years. To
a certain extent this may not impede the ability of the court to
influence prosecution throughout the country, however; like the
regular KL high courts, the new IP high court in KL could
technically accept jurisdiction for IP cases from any part of
peninsular west Malaysia. According to one lawyer, many Malaysian
lawyers seek KL high court jurisdiction for cases located elsewhere,
since they believe the KL court is less subject to corruption and/or
outside influence than some other high courts (the Johor high court
in southern peninsular Malaysia has a particularly negative
reputation among IP lawyers).


6. (SBU) One contact in charge of the local office of a major U.S.
recording company called the establishment of the IP court a major
step forward, and his counterparts from the film and software
industries have expressed similar positive views to us. Our contact
further noted that, in his view, Malaysia seemed to be turning a
corner in combating IP piracy, with the music industry in particular
experiencing a noticeable decline in piracy. He expressed
appreciation for the Embassy's efforts over the years to push the
importance of IPR protection both with the government and with the
public.


7. (SBU) Comment: Establishment of a separate court system focused
solely on IP cases is a major step towards alleviating the foremost
(but by no means the only) obstacle to creating a fully functioning
judicial system in Malaysia, capable of significantly impeding the
widespread piracy of intellectual property. Only after judges and
prosecutors have built a core level of expertise, and the new courts

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have issued rulings with strong deterrents, will it be possible to
judge the new court's effectiveness in changing the parameters of IP
piracy in Malaysia. Nevertheless, MDTCA officials at various levels
have expressed hope that establishment of the IP court will convince
U.S. officials to remove Malaysia from the Special 301 watch list.
End comment.

LAFLEUR