The first warm days of the fast-approaching spring bring along with them the desire to travel and discover new places. Many European SMEs are also thinking about setting up their own businesses within the tourism industry in South-East Asia and particularly in Malaysia, where the tourism industry is rapidly growing. In today’s blog post we are, therefore, taking a closer look at IP protection in the tourism industry, focusing on brand protection – the cornerstone of IP protection in the tourism industry- and the protection of internet domain names.
Underpinned by Malaysian government’s dedication of making tourism the cornerstone of its long-term economic planning, the tourism sector is booming in Malaysia. This year, the tourism sector is expected to bring in more than EUR 22 billion, which signifies an increase of nearly 70% on 2012 levels. As the government is expected to further augment tourism-related funds in coming years, plenty of business opportunities will arise for the European SMEs in Malaysian tourism sector.
SMEs engaged in tourism need to pay special attention to protecting their intellectual property (IP) rights, because IP infringements are still relatively common in Malaysia. IP rights are a key factor for business success and neglecting to register them in Malaysia could easily end SMEs’ business endeavor in the country. Thus, a robust IPR strategy is needed, when entering the lucrative market of Malaysia.
Brand Protection – the Cornerstone of IP Protection in Tourism Sector
Branding is crucial for the tourism sector, as it allows companies to differentiate themselves from the rest, creating a niche market and an individual appeal that will translate into more tourist arrivals. In tourism sector ‘destination branding’ is equally important to company branding. Destination branding often relies on a logo and a tagline, the examples being the Swiss resort St. Moritz using the tagline ‘Top of the World’ or the Tourism Malaysia campaign of ‘Malaysia, Truly Asia’.
SMEs are strongly advised to register their logo and tagline as a trade mark in Malaysia to protect their brand because IP rights are territorial and European trade marks do not enjoy automatic protection in Malaysia. Even though, Malaysia offers some protection for unregistered well-known trade marks under the law of passing off, which protects the business from infringement by dishonest competitors, SMEs should still register their trade mark in Malaysia.
Malaysia adopts the ‘first-to-file’ system, meaning that the first person to register a trade mark owns that mark. It is particularly important for the SMEs to register trade mark in Malaysia because trade mark piracy due to ‘bad faith’ registration is a serious problem. ‘Bad faith’ registration means that a third party, not owning the trade mark, registers European SME’s trade mark, thereby preventing the legitimate owner from registering it. These unscrupulous companies normally try to resell the trade mark to its owner at an inflated price.
Trade marks are registered at the Trade Mark Division of the Intellectual Property Corporation of Malaysia and registration costs approximately EUR 233 in administrative fees, a small amount to pay compared to the costs incurred in case of an infringement or ‘bad faith’ registration.
In Malaysia, a trade mark may be a device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination of these. Colors and 3-D images are also registrable as trade marks, however sounds are not yet registrable.
Don’t Forget to Protect Internet Domain Names
Most companies engaged in tourism rely on websites to attract customers and thus protecting online domain name is of utmost importance for the SMEs. It is advisable to register internet domain names in Malaysia because problems like ‘cybersquatting’ still persist there. Cybersquatting means that a third party registers a domain name that is identical to European company’s product or trade mark name, with the purpose of selling the domain names back to the rightful owner at a premium price.
Internet domain names can be registered with the Malaysian Network Information Centre and this should be done as soon as the company envisages doing business in relation to Malaysia because internet domain name registration also functions under the ‘first-to-file’ system. Internet domain name registration typically costs around EUR 20-25 per year, much cheaper than having to solve domain name disputes.
Enforcement is the Key
Entering a new market and protecting IPRs also means being ready to enforce or defend these rights in order to ensure that business objectives are met and therefore budget planning for enforcement is the key to a successful business strategy. When European SMEs identify infringement, they should actively enforce their rights in Malaysia through the various avenues available. If SMEs manage to build a reputation for ‘being litigious’ then unscrupulous companies will be less likely to infringe their rights in the future.
Helika Jurgenson and Valentina Salmoiraghi
South-East Asia IPR SME Helpdesk
The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (email@example.com) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.
The South-East Asia IPR SME Helpdesk is co-funded by the European Union.
To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.