Competition
Services
IP and competition law present a dichotomy since IP seeks to claim exclusive rights while competition law is aimed in ensuring that businesses compete fairly in a free market. To eliminate anti-competitive behaviour, the Competition Act 2010 was enacted and has been in force since 2012.
To address the applicability of competition law in the IP industry,
Guidelines on IPR and Competition Law (“MyCC Guidelines”) were issued by the Malaysian Competition Commission (MyCC) which provide examples of prohibited anti-competitive conduct in the context of IPR. Some examples include the use of anti-competitive agreements such as horizontal and vertical agreements as well as the abuse of dominant position.
When dealing with local distributors in Malaysia,
brand owners must take note that the terms in an agreement shall not have the object or effect of significantly preventing, restricting, or distorting competition in any market for goods or services.
Anti-competitive behaviours:
- Terms which provide predatory pricing
- Obligation to pay royalty post-expiration
Business models such as franchises which commonly adopt similar terms would therefore have to be careful in navigating around such issues.
Brand owners should be aware:
Brand owners should also be aware of their market share whether as an individual or combined with other parties to an agreement to prevent any possibility of being anti-competitive on grounds of abuse of dominant position.
Our experienced team at Wong Jin Nee & Teo are able to advise on competition law issues as well as assist in reviewing and advising on agreements and proposed business strategies to ensure compliance with competition laws, regulations and guidelines.
Team Members
Wong Jin Nee
Partner
Partner
