Establishing Patent Portfolio with Utility Innovation Certificates in Malaysia

Building a patent portfolio is crucial for safeguarding the Applicant’s investments in product research and development. In addition to providing protection, a well-managed patent portfolio is an attractive prospect for investors, leading to additional financial support for future ventures. Crucially, a patent portfolio represents a valuable intangible asset, capable of generating revenue through avenues such as patent licensing and sale of patent portfolio. Moreover, it also grants the Applicant an exclusive right for the commercial use of the claimed invention. For example, in the case of infringement, it provides an additional layer of protection to the Applicant by effectively preventing unauthorized exploitation or use of their intellectual property without proper authorization.

According to the Malaysia Patents Act, there are two types of avenues available for protecting inventions and innovations: patent protection and utility innovation certificates.

  • Patent protection

Patent protection is applicable to any invention that meets three criteria: the product or process must be (1) new, (2) involves inventive steps, and (3) industrially applicable.

  • Utility Innovation

Utility innovation certificates cover minor inventions which can be (1) a new product, a new process or am improvement to a known product or process, and (2) industrially applicable. Unlike patent protection, utility innovation does not need to fulfil the requirement of inventiveness.

Strangely, there is a common perception that utility innovations hold less value and are more challenging to enforce compared to patents. Due to this perception, many companies and organizations tend to undervalue and underutilize utility innovations, and only consider filing utility innovation applications when the innovation is a minor enhancement to an existing product or process. In doing this, it actually lengthens the time required to build a comprehensive patent portfolio, this is because the patent application actually takes longer for registration. Contrary to this perception, this article will explain how the utility innovation certificates can serve as a useful and cost-effective tool for building a comprehensive patent portfolio.

In contrast to some other countries where utility model applications undergo no examination, in Malaysia, both patents and utility innovations go through the same prosecution process. Notably, the claimed invention of a utility innovation is assessed only for novelty and industrial applicability, without the added requirement of inventiveness. This streamlined evaluation makes it comparatively easier for the examiner to grant the utility innovation certificate without raising any objection.  Consequently, since utility innovations undergo substantive examination before being granted, the risk of a granted utility innovation being invalidated by a third party is lower. Indeed, a granted utility innovation is not easily invalidated, as the requirement for utility innovation certificate is novelty, and for novelty to be destroyed, each and every element of the claim must be disclosed in one single prior art.  This argument is supported by the Court’s decision in the Emerico Sdn Bhd v Maxvigo Solution Sdn Bhd [2020] 1 LNS 206, which exemplifies that a granted utility innovation certificate cannot be invalidated on the grounds of common general knowledge that is required to determine non-obviousness of an invention.

Since the requirements for utility innovation certificate are less stringent than those for a patent, obtaining a utility innovation certificate can be a quicker process, provided the claimed invention is novel, industrially applicable and falls within the patentable subject matter. As companies and organizations can only initiate legal actions against competitors who allegedly infringe their inventions after the grant of a patent or utility innovation certificate, obtaining a granted utility innovation certificate within shorter time is important for companies and organizations who adopt a more aggressive manner in enforcing their exclusive rights.

In Malaysia, the utility innovation certificate is limited to covering a single claim per application.  However, if the single claim is well-crafted to sufficiently cover the nature of the invention and include a novel feature of the invention, a granted utility innovation certificate is as strong as a granted patent and is not easily revoked as compared to patent.  This presents an avenue for companies and organizations to build a strong and comprehensive patent portfolio to safeguard a new invention by filing multiple utility innovation applications, each claiming a different novel feature of the new invention.  

When each granted utility innovation certificate covers only one novel feature of the new invention and there are a number of granted utility innovation certificates relating to the new invention, it makes it harder for competitors to design around the claims and bypass the utility innovation certificates, thereby allowing the owner of the utility innovation certificates to better enforce their exclusive rights.  Furthermore, in the case of potential infringement against the Applicant’s utility innovation certificate, where the Applicant possesses more than one granted utility innovation certificate in the portfolio, the Applicant could allege the infringer has infringed more than one granted utility innovation certificate in the portfolio, therefore allow the Applicant the claim for higher infringement damages based on the number of infringed utility innovation certificates.

Moreover, in terms of protection period, both patent protection and utility innovation certificates technically offer the same protection period, which is 20 years. While the protection period for a  patent is 20 years from the date of filing, the protection period for utility innovation certificate starts at 10 years from the date of filing and can be extended twice, each time for an additional 5 years, provided there is proof of commercial or industrial use of the invention in Malaysia, or a satisfactory explanation of its non-use. This means that companies and organizations have the exclusive right to commercially exploit their inventions for a total of 20 years from the filing date, whether it is a granted patent or a granted utility innovation certificate.

In terms of cost, the cost of filing a new utility innovation application is lower than filing a new patent application. This is because an utility innovation application does not require to prove the inventiveness or non-obviousness of the claimed invention, making the overall process easier and faster. As a result, the overall cost involved in a utility innovation application is lower than that of a patent application, especially if multiple rounds of examination are required. Additionally, the cost for maintaining a utility innovation certificate is also lower compared to maintaining a patent.

When companies and organizations seek to secure patent rights in Malaysia, with the purpose to build a comprehensive patent portfolio, it is not necessary to file numerous utility innovation certificates simultaneously for a new invention.  The recently amended Malaysia Patents Act allows applicants to voluntarily file a divisional application based on a parent application within three months from the issuance date of the first examination report, as long as the parent application is still pending (not granted, refused, withdrawn or abandoned).  When filing a divisional application, applicants may choose to file the child application as a utility innovation application.  Since Malaysia follows the first-to-file system, both local and foreign companies and organizations who wish to create a patent portfolio in Malaysia might consider initiating a patent application in Malaysia and dividing it into multiple utility innovation applications to cover various novel features of the invention.  

When companies and organizations opt to divide their pending patent application in Malysia into several utility innovations, they can start by identifying the potential novel features of the invention claimed in the parent application. Subsequently, they may file divisional utility innovation applications, each featuring a broad claim with just one of the novel features of the invention. This strategy ensures that each of the divisional utility innovations, once granted, will possess a comprehensive scope of protection, yet is strong enough and not easily revoked by competitors.  

Nevertheless, companies and organizations have to take note that the non-patentable subject matters applicable to patents also apply to utility innovations. For example, inventions that cannot be protected by patent and utility innovation include: (a) discoveries, scientific theories and mathematical methods; (b) plant or animal varieties or essentially biological processes for the production of plants or animals, other than man-made living micro- organisms, micro-biological processes and the products of such micro-organism processes; (c) schemes, rules or methods for doing business, performing purely mental acts or playing games; and (d) methods for the treatment of human or animal body by surgery or therapy, and diagnostic methods practiced on the human or animal body.

In conclusion, utility innovation certificates are useful means for obtaining exclusive rights for new inventions and innovations in a cost-effective and time-efficient manner in Malaysia. Companies and organizations can create a strong and comprehensive patent portfolio in Malaysia by filing a number of utility innovation applications, with each application claiming one novel feature of a new invention.