Monthly Archives: April 2011

Podcast: The Digital Edge 25: The #yorais mob

John Lim, Grace Chin, David Lian and Foong Cheng Leong discuss:

1. Mark Zuckerberg says that the age of privacy is over – so can Malaysians expect our status updates and Twitter feeds to be private?

2. Minister for Information, Communications, Culture and Arts Datuk Seri Rais Yatim says that Malaysians should not be too immersed in social networking sites, leading the Twitterverse to respond with #yorais

3. An upcoming proposed amendment to Malaysia’s copyright act looks to seek more control over digital content. Can we expect a day when new business models like this to come up in our country.

The Legal Implications of Social Media: Defamation and Libel

Foong Cheng Leong, Senior Associate, Lee Hishammuddin Allen & Gledhill discusses the legal aspects of social media, focusing in particular on online defamation, admissibility of online data in courts, cybersquatting, domain disputes, and whether there should there be regulation of the Internet and social media, whether directly or indirectly.

He also discusses the fine line between fair Internet policing and control over the Internet, proposed Amendments to the PPPA and the perceived threats to online publications and bloggers.

He also talks about the Malaysian Personal Data Protection Act 2010 (not in force yet) and explains its implications for the ordinary layman.

Life Online Show 16: Naughty things

Podcast interview at the Life Online Show podcast on 2 February 2011.

The following topics were discussed with host John Lim, David Wang from theclickstarter.com, David Lian from Text100, journalist Niki Cheong:

1) Groupon coming into Malaysia by acquiring GroupsMore.com

2) Google establishing a bigger foothold in Malaysia with an office in KLCC.

3) The Malaysian Prime Minister has sent citizens Chinese New Year greetings, but how did he get their e-mail addresses in the first place?

Right to Privacy in Malaysia: Do we have it?

First published on “LoyarBurok and republished on Malaysia Insider on 21 February 2011

If someone installs a CCTV in front of your house, can you stop him from doing so? If our Prime Minister sends his best wishes for the festive seasons to your email and mobile, is he invading your privacy? Whats the state of the right to privacy, and invasions of your privacy, in Malaysia?

Long story short, yes, our constitution recognises the right to privacy under article 5 of the constitution according to the recent Federal Court case of Sivarasa Rasiah v. Badan Peguam Malaysia & Anor [2010] 3 CLJ 507 at 519. Article 5(1) of the Constitution provides that “No person shall be deprived of his life or personal liberty save in accordance with law.” According to Gopal Sri Ram FCJ (as then he was) in the Sivarasa case, the right to personal liberty includes the right to privacy.

What is a “right to privacy”?

The right to privacy is basically the right to be left alone and to live the private aspects of one’s life without being subjected to unwarranted, or undesired, publicity or public disclosure. It is also a right of an individual to seclude oneself or information about himself and thereby reveal himself selectively. For example, the right of being strip searched (and probably do some squats and get recorded see: squatgate).

Invasion of Privacy

However, althought the right to privacy provided by the Constitution, is there an actionable right against someone who invaded your privacy?

Notwithstanding the recognition of such right, such right may not be enforced by an individual against another private individual for the infringement of rights of the private individual as constitutional law (substantive or procedural) will take no cognisance of it (Beatrice Fernandez v. Sistem Penerbangan Malaysia & Anor [2004] 4 CLJ 403).

The tort of invasion of privacy is not a recognized tort under common law (Malone v MPC [1979] Ch 344; Kaye v Robertson [1991] FSR 62 (CA); Khorasandjian v Bush [1993] QB 727, 744 (CA); Wainwright v Home Office [2003] UKHL 53, [2003] All ER (D) 279 (Oct), House of Lords).

The tort of invasion of privacy is not recognized in Malaysia. This basically means that you cannot sue someone for invading your privacy.

The Malaysian High Court cases of Ultra Dimension Sdn. Bhd. v. Kook Wei Kuan [2004] 5 CLJ 285 and Lew Cher Phow @ Lew Cha Paw & 11 Ors v. Pua Yong Yong & Anor [2009] 1 LNS 1256 Johor Bahru High Court Civil Suit No. MT 4-22-510-2007 had held that invasion or violation of privacy is not a recognized tort or a cause of action in Malaysia. In the former case, the Plaintiffs failed in their action for invasion of privacy against the Defendant for taking a photograph of a group of kindergarten pupils, including the Plaintiffs child, at an open area outside the kindergarten and published it in two local newspapers. As for the latter case, the Plaintiffs failed in their application to restrain the Defendants from having a CCTV which faces their house and to remove the same.

Similarly in the High Court case of Dr Bernadine Malini Martin v. MPH Magazines Sdn Bhd & Ors [2006] 2 CLJ 1117, the Court again stated that invasion of privacy is not an actionable wrongdoing.

However, the Court of Appeal judgement of Maslinda Ishak v. Mohd Tahir Osman & Ors [2009] 6 CLJ 653 gave light to the tort of invasion of privacy. Some of you may recall the incident where a guest relations officer (GRO) was photographed easing herself in a truck by a volunteer reserve corps member (Rela) after the GRO was detained in a raid at a club in 2003. The GRO sued the Rela member, Director General of RELA, the Director of JAWI and the Government of Malaysia. She was granted damages for the wrongdoing. However, the case was not on point as to whether the tort of invasion of privacy is a recognized tort in Malaysia.

YB Elizabeth Wong, YB Dr Chua Soi Lek & Actress Nasha Aziz were all victims of privacy invasion.

The case of Lee Ewe Poh v Dr. Lim Teik Man & Anor [2010] 1 LNS 1162 is the first reported Malaysian case that recognizes the invasion of privacy as an actionable tort. In this case, the doctor had taken picture of the Plaintiff’s anus during a medical procedure without informing the Plaintiff. The doctor’s reason for taking such picture was for medical purpose and claimed that taking of photographs during the course of the medical procedure without the consent of the patient is an acceptable practice.

The Court of Appeal judgement of Maslinda Ishak was referred in the judgement of Lee Ewe Poh and the learned Judicial Commissioner relied on the said case to hold that invasion of privacy rights is actionable in Malaysia.

The Learned Judicial Commissioner held in the case of Lee Ewe Poh that (at page 6 of judgement):

The learned trial judge found for Maslinda Ishak against the 1st defendant but not against the other respondents for whom she appealed. The Court of Appeal allowed her appeal and held the respondents to be jointly and severally liable for the wrongful act of their agent as well as vicariously liable. Although Maslinda Ishak’s case is not directly on point, the fact remains that the High Court in so finding has departed from the old English law that invasion of privacy is not an actionable tort and our Court of Appeal indirectly, though this issue was not canvassed, seems to endorse such cause of action when the pleadings were specifically referred to and C.A. did not overrule invasion of privacy as a cause of action on ground that it is not one in line with the English law. Since such a cause of action has been accepted as a cause of action under our common law, it is thus permissible for a plaintiff to found his/her action on it. Drawing an analogy of this Court of Appeal case, I am inclined to hold the view that since our courts especially the Court of Appeal have accepted such an act to be a cause of action, it is thus actionable. The privacy right of a female in relation to her modesty, decency and dignity in the context of the high moral value existing in our society is her fundamental right in sustaining that high morality that is demanded of her and it ought to be entrenched. Hence, it is just right that our law should be sensitive to such rights. In the circumstances, Plaintiff in the instant case ought to be allowed to maintain such claim.

Both Maslinda Ishak and Lee Ewe Poh’s cases are in respect of women’s modesty. It will be interesting to see whether how our right to privacy would extend to. For example, will it extend someone’s surfing habits? If someone had recorded everything you serve on the Internet, would that be an invasion of privacy? (On an interesting note, Google does store your Google search keywords).

Lee Ewe Poh’s case is a High Court decision thus may not be followed by other courts of the same or higher jurisdiction. However, Sivarasa’s case was not referred in the decision of Lee Ewe Poh. With Sivarasa’s case, it will be interesting to see whether the recognition of tort of invasion of privacy will be strengthened by it.

Misuse of Private Information

The recognition of right to privacy in Sivarasa’s case may be a stepping stone to the expansion of the tort of breach of confidence to include “misuse of private information”, a term coined by Lord Nicholls in the House of Lords case of Campbell v. MGN Limited [2004] UKHL 22, in Malaysia. In this case, the House of Lords held that the publication of articles by the Mirror newspaper regarding well known model Naomi Campbell’s attendance at Narcotics Anonymous meetings and her efforts to overcome her addiction to drink and drugs was a misuse of private information. Basically, this tort protects information that is “private”. It affords respect for one aspect of an individual’s privacy.

Closing

If the tort of invasion of privacy or misuse of private information is recognised in Malaysia, this may be used as a remedy against those who had breached the Malaysian Personal Data Protection Act 2010 (which is not in force yet). The present Personal Data Protection Act 2010 does not provide for damages to data subjects for the breach of the said Act unlike the UK Data Protection Act 1988. With such torts, this may bridge the gaps in the Malaysian Personal Data Protection Act 2010.

The effect of the recognition of the privacy rights in Malaysia is far reaching. It may, in no particular order, affect the following:

  • Employees’ rights especially when it comes to employee monitoring;
  • Authorities’ right to conduct searches such as strip searches or search of a premise or vehicle;
  • Internet users’ rights such as the right to remain anonymous (note: bloggers have problem claiming anonymity pursuant to the case of The Author of a Blog v Times Newspapers Limited [2009] EWHC 1358 (QB) where the UK Court held that blogging is a public activity);
  • Details of relationships such as intimate details of partners including intimate pictures;
  • The right of the media to report news regarding individuals;
  • Rights of public figures such as politicians and celebrities; and
  • The position of the admissibility in Court proceedings of illegally obtained evidence which infringes’ an individual’s right to privacy

Well, if you ask me whether the Prime Minister has infringed your right to privacy or had committed misuse of private information, when he sent festive greetings (although I understand it is for good intention) to your emails or mobile phone, my answer is that, it will be an interesting test case in Malaysia!

Blog postings can backfire

First published on The Star Newspaper on 20 January 2011.

PUTIK LADA
By FOONG CHENG LEONG

Social media influence has hit court proceedings, with lawyers trolling blogs and Wikipedia in search of material that can help them argue the case for their clients.

LAST year brought further interesting development to social media and laws all around the world. Cases making references to social media tools saw an increase.

Social media was a tool for lawyers and litigants to help parties to fight their cases. Social media was also the cause of some parties’ mortification and incarceration.

In one High Court judgment last year, the judge recognised the publication of defamatory blog postings by a husband as one of the grounds to present a divorce petition before the expiry of two years from the date of marriage.

He also recognised that a defamatory statement in a blog posting operated in a borderless realm, and would continue to exist until the maker of the blog removed it.

The challenge against the constitutionality of S. 233 of the Communications and Multimedia Act 1998, the provision commonly used against Internet users, was dismissed by the High Court.

In this case, the defendant was charged with making disparaging remarks against the Sultan of Perak during the struggle between Barisan Nasional and Pakatan Rakyat. The court held, among other things, that the section did not impede freedom of expression. S. 233 is to ensure that the freedom given by the Constitution is exercised responsibly.

The use of Wikipedia as a reference is increasingly recognised in Malaysia, notwithstanding that the reliability of Wikipedia is questionable, as anyone can add or edit an entry in Wikipedia.

Nevertheless, the reliance on Wikipedia by our courts can be traced in reported cases as early as 2007.

Last year Wikipedia was referred to in Etonic Garment Manufacturing Sdn Bhd v Kunn-G Freight System (M) Sdn Bhd [2010] 1 LNS 13 (for the meaning of freight forwarder), PP v Murugan a/l Arumugam [2009] 1 LNS 1759 (for the meaning of atherosclerosis) and Thai Long Distance Telecommunication Co Ltd & Anor v Malaysian Maritime Dredging Corpo­ration Sdn Bhd (Kuala Lumpur Suit No: D-22-352-2005, for the meaning of chart datum).

Social media influence had also hit court room proceedings. It is common in Malaysia for people, in particular reporters, to tweet live from the courts. In the United Kingdom, the Lord Chief Justice issued a guideline for the use of live text-based forms of communication from court.

In this guideline, the Lord Chief Justice approved the use of Twitter for court reporting. However, in the US, certain courts ban the use of social media by juries.

In the US case of Romano v. Steelcase Inc, 2006-2233 (N.Y. Super. Sept. 21, 2010), Kathleen Romano sued Steelcase Inc for injuries she suffered after she fell off an allegedly defective desk chair manufactured by Steelcase Inc.

As a result of the fall, she claimed, she suffered restricted movement of her neck and back and “pain and progressive deterioration with consequential loss of enjoyment of life”.

In defence, Steelcase applied to access Romano’s current and historical Facebook and Myspace pages and accounts which are believed to be inconsistent with her claims in the action concerning the extent and nature of her injuries, especially for loss of enjoyment of life. The court granted Steelcase’s application.

Similarly, in McMillen v Hummingbird Speedway Inc, et al, Court of Common Pleas of Jefferson County, Pennsylvania, Civil Division, No. 113-2010 CD, Opinion on Defendants’ Motion to Compel Discovery (Sept. 9. 2010), the plaintiff sued the defendants for injuries suffered.

The defendants claimed that posts on the public portion of his Facebook page showed that he had exaggerated his injuries. The court granted the defendants access to the plaintiff’s private portion of his Facebook and Myspace account to determine whether or not the plaintiff had made any other comments which impeached and contradicted his disability and damages claims.

Closer to home, in a reported Industrial Court case, an employee claimed that she was forced by her employer to resign.

In response, her employer argued that the resignation was voluntary and they produced extracts of the claimant’s blog which showed the claimant had written about her feelings regarding her employment with the employer.

In it, she stated that she wanted to leave the company and admitted that she went for job interviews as she had already decided to go away.

The Industrial Court chairman relied on the blog entries to find that the employee had intended to leave and found that she had gladly tendered her resignation to take on new employment.

In Australia, a hairdresser won compensation for wrongful dismissal after losing her job for making unflattering remarks about her employer on her Facebook.

In Miss Sally-Anne Fitzgerald v Dianna Smith T/A Escape Hair Design [2010] FWA 7358, Commissioner Michelle Bissett for Fair Work Australia said that posting comments about an employer on a website (Facebook) that can be seen by an uncontrollable number of people is no longer a private matter but a public comment.

It would be foolish of employees to think they may say as they wish on their Facebook page with total immunity.

This year brings another exciting watershed to Malaysia’s social media legal sphere. The Personal Data Protection Act 2010, which governs the processing of personal data, is pending enforcement.

Proposed amendments to the Copyright Act 1987 have been drawn up in the form of a Bill to exempt Internet service providers from liability for copyright infringement under certain circumstances.

The Bill also empowers the court to order an Internet service provider to disable access to infringing material.

Furthermore, the so-called Internet Service Providers Liability Act may be passed to compel Internet service providers to take action against their users if they download songs or movies illegally.

Internet Service Provider Liability Act: Do we need one?

An analysis of the potential repercussions of the proposed Internet Service Provider Liability Act.

Recently, The Star reported that the Malaysian Parliament will be tabling the ISP Liability Act (”Act”). According to The Star, the Act makes internet service providers (ISPs) responsible for curbing online piracy. The ISP will be fined if they don’t take action against illegal downloaders.

The ISP will send two warning letters to illegal downloaders. Should the downloaders persist, their internet access will be suspended or even terminated.

It is unclear at this juncture on how far-reaching the Act would be. Will it cover all methods of downloading copyrighted materials, such as music and movies, or only through P2P file sharing software? If a user streams videos or music through a website, would they be caught under this Act? Technically in such case, there is a download of copyrighted materials into a user’s computer.

It is also unclear at this juncture on how the Act would require ISPs to monitor their users’ activities. Are they compelled to keep track of all their users’ internet activities? Or would there be a need for active participation of intellectual property rights (IPR) holders to tell the ISPs that certain IP addresses are infringing their rights, so that the ISPs can reveal the users’ details?

How it works

Making ISPs responsible for their users’ actions is not something common. Jurisdictions such as United States of America and United Kingdom have laws in place to compel ISPs to take action their users.

In some jurisdictions, IPR holders would engage a third party to monitor the internet to see whether anyone is sharing copyrighted files online. If they detect someone, they will obtain the IP address, and thereafter pass it to the relevant ISPs for them to take action against their user. If the user persists notwithstanding that warning letters have been issued, the ISPs may suspend or terminate the user’s internet access.

This is also commonly known as graduated response, or in another words the “three strikes rule”.

Repercussions

It is argued that such a law would curb online piracy. Thousands of people are dependant on the music and movie industries, and online piracy is affecting these industries severely. I do not deny that online piracy has affected these industry, but the objective of this article is to show that the repercussions of such a law are severe to internet users.

What has happened in jurisdictions containing such a law is a good indication on where the implementation of such a law will take us.

In many cases, IPR holders take additional steps against alleged online infringers. IPR holders would normally request for the identity of the internet user (normally after obtaining a Court order) from the ISPs. Some ISPs are ready to divulge such information, whereas some ISPs put up a fight. Once the identity of the user is revealed, the IPR would initiate action against the user and such active enforcement has caused terrible impact on users.

In the United Kingdom, it was reported that IPR holders will send a letter to illegal file sharers demanding payments of between GBP500 and GBP700, failing which the file sharer will be brought to Court. In the United States, a lady decided to fight it out with the recording industry instead of settling out of Court after being accused of encouraging the illegal sharing of songs. She lost the case, and was fined US$220,000. It is a classic case of David against Goliath.

Such a law will also affect internet users who do not know that their internet connection has been piggy-backed by third parties. There are many cases where users do not know that someone has used their internet connection — especially those with unsecured Wi-fi connection — and subsequently receive a demand letter for an offence they did not commit. This happened to a 78 year old man in the United Kingdom, who received a demand letter from a lawyer accusing him of downloading pornography. The 78 year old man didn’t even know what file-sharing was!

At this juncture, we do not know whether the Act would provide for a defence of innocent infringement. But the fact that one can receive a demand letter from lawyers for something that one has not done is quite frightening.

Children are now exposed to the internet at very young age. They may not know that their act of sharing and downloading music or videos will cause serious repercussions to them. A child would obviously choose to download the latest single of Justin Bieber from the internet instead of begging and pleading with his or her parents to buy it. One would argue that we ought to teach our children against online piracy. But all parents know that not all of their advice is always heeded.

In Singapore, it was reported that Odex Pte Ltd, a distributor of Japanese anime in Singapore, had issued demand letters to children as young as 9 years old accusing them of illegal downloads. Further, in the United States, 16 year old Whitney Harper was sued by the recording industry after she was found sharing music via a P2P file sharing program. She claimed that she didn’t know the program she used was taking songs from the internet illegally. Notwithstanding that, judgement was entered against her.

The enactment of the Act would also be another deterioration of our (almost non-existence) privacy rights. Malaysian laws do not recognize invasion of privacy rights as an actionable wrongdoing (see Ultra Dimenson Sdn Bhd v. Kook Wei Kuan [2004] 5 CLJ 285; Dr Bernadine Malini Martin v MPH Magazine Sdn Bhd & Ors and Another Appeal [2010] 7 CLJ 525; and Lew Cher Pow @ Lew Cha Paw & 11 yang lain lwn. Pua Yong Yong & Satu Lagi [2009] 1 LNS 1256) except in very limited circumstances (Maslinda Ishak v. Mohd Tahir Osman & Ors [2009] 6 CLJ 655).

ISPs are the “guardians” of our rights of privacy. They hold the key to our identity in the internet. Our identity, surfing habits and internet activities are our personal data and ISPs ought to give priority of such data over commercial interest of others.

By giving access to our personal data to third parties, our privacy is at risk, and such a risk is real. Recently, ACS:Law, a law firm specialising in taking action against file sharers in the United Kingdom, had accidentally divulged information of thousand of broadband users who were accused of illegal file sharing. The information that was leaked were unencrypted Excel spreadsheets, listing the names and addresses of people that ACS:Law had accused of illegally sharing media. One contained details of customers whom they had accused of illegally sharing pornography!

In light of the ACS: Law case, some ISPs in the UK resist efforts to divulge customer details to IPR holders. I urge the same is followed by our local ISPs in order to protect internet users’ privacy.

It should be remembered that customer data is protected under the upcoming Personal Data Protection Act 2010, which provides for a fine or imprisonment or to both in the event of a breach.

Lawyers appointed to act for IPR holders should also be vigilant when dealing with internet users. Solicitors who had been representing IPR holders were subject to public humiliation and harassment by internet users.


A partner of ACS: Law, one of the main targets.

Assuming that the Act would push through in any event, I urge our local ISPs to only take action or to provide customer information to IPR holders if they are satisfied that –

1. there is strong evidence to show infringing act has been committed by user, if possible only provide information if infringement is on a large or commercial scale or for commercial gain;
2. the requester’s storage system is secure, and they have given an undertaking that information will be kept securely e.g. encrypted;
3. the requester will only use that information for the purpose of pursuing legal action only and not to published it anywhere else; and
4. the requester is compelled to give access to the information obtained from ISPs to customers to ensure that a fair case can be fought.

Closing

I am not a file sharing advocate, and I do not condone internet piracy. I am only seeking to raise awareness of the repercussions of such a law. I hope what I have mentioned above is considered by the law and policy makers.

I would like to express my gratitude to David Wang of Blogjunkie.net for raising this issue on his blog.

Quick, throw your CDs away! There’s a roadblock!

First published on LoyarBurok on 2 November 2010

For the past few months, an email has been circulating alleging that police and the enforcement division of the Domestic Trade and Consumer Affairs Ministry’s (now the Ministry of Domestic Trade, Co-operatives And Consumerism) have started operations to search and fine anyone who keeps pirated discs inside their cars. The email alleges that these operations were carried out through roadblocks at main roads and expressways, and that persons caught in possession of pirated discs were fined RM400 per disc.

In fact, these stories have been circulating for some time now. A report in the Sun newspaper in April 2009 stated that the police set out roadblocks to nab anyone with pirated discs. However, the same report stated that the Ministry denied having such roadblocks being set up.

Whether or not such roadblocks have been set up, it leaves us with the question: Do the police or the Ministry have the power to search our vehicles for pirated discs?

Section 24 of the Police Act 1967 allows any police officer to stop and search without warrant any vehicle which he has reasonable grounds for suspecting is being used in the commission of any offence against any law in force. The Ministry has also authority to enter and search a vehicle without warrant provided that he has reasonable grounds for believing that delay in obtaining a search warrant would lead to the destruction of evidence.

Under section 41 of the Copyright Act 1987, it is an offence to possess, other than for private and domestic use, any infringing goods. Any person who has in his possession, custody or control three or more infringing copies of a work or recording in the same form is presumed to be in possession of such copies otherwise than for private or domestic use. This basically means that possession of a pirated disc for private and domestic use is allowed provided that the pirated disc do not exceed three or more copies of the same form.

The offence would attract a fine not less than RM2,000 and not more than RM20,000 for each infringing copy or imprisonment for a term not exceeding five years or to both.

Can the police or the Ministry stop and search your vehicle?

In short, for now, if the police or Ministry have reasonable grounds to think that you are distributing pirated goods, (e.g. if you’re suspected to be a pirated VCD/DVD seller), they can stop and search your vehicle. Otherwise, they have no authority to stop and search your vehicle for pirated discs.

This situation may soon change.

The Government recently announced plans to amend the Copyright Act 1987 to make it an offence to keep pirated goods, similar to the offence of possessing stolen goods. Although the Government has not announced the details of the amendment, such news is worrying. This basically means that anyone in possession of pirated goods is committing an offence. Hence, any police, with reasonable grounds that there are pirated goods in a vehicle, may stop and search the vehicle.

What if the driver had purchased genuine songs from the internet and had it copied into a CD? The driver would have to prove and explain that he had genuinely purchased the song.

If I had downloaded software, music or movies into my computer from the Internet, does the police or Ministry has the authority to enter my house and search my computer? Based on the proposed amendment, the police or Ministry has the authority to do so.

Guidelines to allow the authorities to stop and search a vehicle for pirated goods should be clearly spelled out and made available to the public. The public should be given the right to use or copy copyrighted materials for their private use. Certain levies or exemptions should be given to the public if they are in possession of pirated goods unintentionally.

An outright ban of unauthorised possession copyrighted materials will create fear and chaos to the country and society.

Stemlife Berhad v Bristol-Myers Squibb (M) Sdn Bhd & Arachnid Sdn Bhd

First published on 10 August 2009

CIVIL SUIT NO S6-23-95-2008 (HC)

Arachnid Sdn Bhd (“Arachnid”) provides web development and related services. In 2003, Bristol-Myers Squibb (M) Sdn Bhd (“Bristol-Myers”) engaged Arachnid to set up a website, www.meadjohnsonasia.com (“the website”). Arachnid thereafter also provided maintenance services for the website.

The website hosts a forum known as the Asian Mom Network (“the forum”), a platform for Asian parents to share tips and views on parenting.

In 2007, Stemlife Berhad (“Stemlife”) brought an action against Arachnid for online defamation, alleging the latter was responsible for certain defamatory statements made by users of the forum.

Arachnid sought to strike out Stemlife’s suit on the basis that it disclosed no reasonable cause of action or was frivolous, vexatious and an abuse of process of the court.

The High Court in Kuala Lumpur struck off the claim by Stemlife. This case highlights the extent of liability for online defamation in Malaysia.

The court held that Stemlife’s suit had no reasonable cause of action on the grounds that:

a) Arachnid’s role was simply to set up and maintain the website for Bristol-Myers. Arachnid is Bristol-Myers’ web agency and the website belongs to Bristol-Myers;

b) Arachnid was not the author and editor of the words complained of. Stemlife had identified the authors as being the forum users, and one of the defamatory statements did not appear on the website but through a hyperlink to another website. Therefore, Arachnid could not be the publisher of the words complained of; and

c) Arachnid, which merely provides the service of setting up and maintaining a website, could not be held responsible as a “publisher” under the law of defamation.

Further, the suit by Stemlife was frivolous, vexatious and an abuse of process of the court in that:

(a) Arachnid was engaged by Bristol-Myers to set up the website;
(b) Arachnid provided maintenance services, including providing updates and upgrades upon the instruction of Bristol-Myers. The court held that it was not sufficient to attach liability on the part of Arachnid;
(c) There was no participation by Arachnid in the promotion of the forum;
(d) The contents of the website would not be within the knowledge of Arachnid, unless informed by Bristol-Myers;
(e) Arachnid did not control content posted on the forum, nor did it moderate or monitor the forum. Any postings on the website would only be removed upon the instruction of Bristol-Myers; and
(f) Stemlife had not shown as to how Arachnid contributed to, or was “knowingly” involved in, the publication of the words complained of.

The court also held that Arachnid had no control over the contents of the website, and had never played an active role in respect of the publication. Neither would Arachnid have knowledge of the contents of the words posted on the website.

Based on the above reasons, the High Court allowed the application by Arachnid to strike out Stemlife’s writ and statement of claim, which it dismissed with costs.

Philip Morris Products SA v Ong Kien Hoe & Ors

First published on 22 October 2009

CIVIL SUIT NO S6-23-95-2008 (HC)

Philip Morris Products SA (“Philip Morris”) is a manufacturer and distributor of cigarettes and tobacco products under the trade mark of ‘MARLBORO’ throughout the world and the proprietor of the registered trade mark “MARLBORO” in Malaysia.

On 10 September 2002, the officers of the 3rd Defendant (Director General of the Customs and Excise Department of Malaysia) detained 2 containers containing 1350 unmarked bale boxes containing cigarettes bearing the trade mark of ‘MARLBORO’.

These cigarettes were subsequently found to be counterfeit cigarettes. Philip Morris initiated an action against the 3 defendants but finally went to trial only against one, the 2nd defendant, who is a forwarding agent. Along the way, the claims against the 1st and 3rd defendants were withdrawn.

According to the declaration forms completed by the 2nd defendant and filed with the 3rd defendant, the consignors of the 2 containers were the 1st defendant. The declaration forms, packing and shipping of the goods in the containers were arranged by the 2nd defendant.

Philip Morris claimed against the 2nd defendant for infringement of Philip Morris’s trade and proprietary rights over the registered trade mark of ‘MARLBORO’. The infringement was said to have been committed by the 2nd defendant by passing off or attempting to pass off counterfeit cigarettes

(a) by its action in the transshipment, loading, unloading, reloading, transloading, storing, transitional storing, transiting, transporting, transshipping, transferring and/or dealing in any other manner in the course of trade with the counterfeit cigarettes;

(b) without the consent, authorisation or knowledge of Philip Morris dealt in or with the counterfeit cigarettes and/or counseled, instigated, procured, enabled, directed or assisted in the doing of those same acts.

The 2nd defendant is also alleged to have shown its direct complicity with the counterfeit cigarettes not only with regard to the importation and customs clearance but also in claiming ownership to obtain release and delivery of the counterfeit cigarettes to itself.

The 2nd defendant’s defence was that, among others:

(a) that it was merely carrying out its duties and obligations as a forwarding agent for a named principal;
(b) that it was not responsible or liable for the infringement; and
(c) the counterfeit cigarettes were seized within the free zone which is deemed to be a place outside Malaysia. That being so, not only is there no levy within this zone, the laws in Malaysia including the Trade Marks Act 1976 do not apply. Further, the ‘goods in transit’ are also exempted from seizure.

The High Court allowed Philip Morris’s claim with costs and held the following:

(1) The trade mark on the cigarettes seized from the 2 containers bore a trade mark identical to Philip Morris’s registered trade mark. Since Philip Morris had not authorised or licensed the 2nd defendant to use that registered trade mark there was infringement.

(2) The 2nd defendant was not a mere forwarding agent. On the facts the 2nd defendant did a lot more. In this regard:

(a) Firstly, the whole process from documentation to the handling of the cigarettes or the consignment is part and parcel of the course of the 2nd defendant’s trade or business as a forwarding expert. The 2nd defendant’s use is not as a private consumer. The documentation work related to the clearance of the cigarettes was an integral part of the expertise and trade of the 2nd defendant. It is the 2nd defendant who represented to others including the 3rd defendant that the goods in the 2 containers were cigarettes. Obviously these cigarettes must have a brand or be of a particular make, whatever that may be. The fact that the contents of the 2 containers cleared the Free Zone authorities indicates that these authorities must have believed that the 2nd defendant was authorised or licensed to ‘use’ in the sense of handling the cigarettes and clearing them in the course of its trade as a forwarding agent.

(b) Secondly, the 2nd defendant unstuffed counterfeit cigarettes and later consolidated these cigarettes with the other consignment of counterfeit cigarettes and paper bags. This required the 2nd defendant to open up the containers and deal with their contents. Although there is no need for the 2nd defendant to know for a fact that these cigarettes bore some particular registered trade mark, it is naive to suggest that the 2nd defendant is not aware at that time that it is handling cigarettes bearing the trade mark ‘MARLBORO’. Having being in the forwarding business for almost 15 years it is fair to impute that the 2nd defendant is at least generally aware of trade marks and counterfeiting or infringements of trade marks. Having opened the containers to consolidate their contents the trade mark must have been obviously displayed.

(c) Thirdly, the use of fictitious names and addresses admitted by the 2nd defendant indicates the existence of some element of complicity. Given that s 133(1) of the Customs Act 1967 (Act 235) makes it an offence to, among others, make a declaration which is untrue or incorrect in any particular, The Court held that the 2nd defendant’s argument that they are not obliged to ensure accuracy of the particulars in the documents presented for clearance of the cigarettes is unsustainable both in law and on the facts. On the contrary, ss 80 and 90 mandate the 2nd defendant with certain duties and liabilities for ensuring the completeness and accuracy of the details of the goods declared.

(3) The Free Zone is not free for all area, free of all laws or, that there is lawlessness in this zone. The enforcement agencies continue to hold jurisdiction over and in these Free Zones. In any event the issue of the validity of the seizure was immaterial and irrelevant to the success or otherwise of Philip Morris’s claim. Philip Morris’s rights in the registered trade mark were rights in rem.

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