MALAYSIA Law and Practice Contributed by: Tai Foong Lam and Amy Lim Yun Jin, Gan Partnership
The civil remedies available apart from an interim injunction, subject to the Court’s discretion, are a per- manent injunction to prevent further non-authorised disclosure, an order to deliver or destroy confidential information and materials and monetary damages, which can be awarded as a lump sum or based on an account of profits. Additionally, the court may award aggravated, exemplary or punitive damages, among others. As for legal fees and costs, these are generally recoverable at the court’s discretion, depending on the complexity of the case and in accordance with the standard scale of costs prescribed under the Rules of Court 2012. In arbitration proceedings, the confidentiality of infor- mation is generally upheld. The Malaysian courts, however, operate on the principle that court proceed- ings are open to the public. Exceptions could, how- ever, be made, subject to the courts’ discretion, on application in the interests of justice or public security or to protect confidential information. 6. Know-How 6.1 Definition and Legal Basis of Know-How Know-how is not statutorily defined in any statutes in Malaysia. It is commonly defined in agreements. Unlike trade secrets, know-how may include partially unsecured or experiential knowledge that is not easily reducible to writing or other documents. Accordingly, know-how is generally categorised as confidential information in agreements. Confidential information is the bigger umbrella which encompasses trade secrets and know-how. Know- how is broader than trade secrets and trade secrets are information not publicly known or easily acces- sible. Trade secrets ought also to have greater com- mercial value than know-how. In Malaysia, know-how is not a proprietary right; thus, the obligation to maintain its confidentiality is clearly set out in the relevant agreements. Notwithstanding that Malaysia has a Competition Act 2010 that regu- lates anti-competitive behaviour in markets, such as abuse of dominance, it does not govern know-how protection. As a result, the Competition Act of 2010
may, at most, function as a reference guide for reason- able confidence to be expected of know-how while balancing the fairness of trade competition. 6.2 Protectability Requirements and Scope In Malaysia, know-how is treated as confidential infor- mation and its scope is subject to the definition set out in the respective agreements. Generally, know-how includes technical and industrial processes, software and algorithmic know-how such as source code and data processing methods, commercial and business know-how such as supplier pricing structures, market entry strategies, internal pricing models, etc, industrial and operational know-how such as machine operation techniques and embedded experiential knowledge such as knowledge acquired through experience. Depending on the nature of the parties’ contractual obligations, know-how disclosed to the other party may always be required to remain confidential. There is, however, no statutory requirement that know-how ought to be novel nor strictly economically valu- able. However, the economic value of the know-how would determine the likelihood of confidentiality of the information and the impact if the know-how were disclosed without authorisation. As addressed previ- ously, for know-how to receive protection under the ambit of confidential information, the know-how must be confidential in nature and the confidence of such information ought to be communicated and/or rea- sonably expected depending on the circumstances. 6.3 Ownership, Creation and Employee Know-How The employer is generally presumed to own know- how created by employees in the course of employ- ment, particularly if the know-how was created using the employer’s resources. This, however, depends on the know-how created and: • the employee’s role; • the nature of the work; and • whether the knowledge is part of the assigned duties. To the contrary, know-how created by independent contractors and consultants does not presumptu- ously belong to the employer. The nature of arrange-
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