MALAYSIA Law and Practice Contributed by: Tai Foong Lam and Amy Lim Yun Jin, Gan Partnership
ments under the respective agreements between the employer and the contractor shall be referred to. Usu- ally, the know-how belongs to the contractor and the client (employer) may be granted a limited license to use it for an agreed purpose. In a joint development relationship, know-how devel- oped therein is governed under the respective con- tract. There is generally no implied duty for employees to remain confident in the know-how and safety unless it is reasonably expected of the employees to do so. Otherwise, the duty remains with the owner of the information to ensure the confidentiality of such infor- mation prior to disclosure. Unless otherwise required under the agreement between an employee and employer, an employee has no implied duty to transfer know-how acquired back to the employer after leav- ing. It is, however, important to note that the employee must not retain any confidential and/or proprietary know-how of the employer. 6.4 Protection Through Contract and Confidentiality In Malaysia, the protection of know-how is mainly found in agreements between the parties. The com- mon contractual mechanisms used include non-dis- closure agreements, confidentiality clauses, non-use provisions prohibiting the use of know-how for any purpose other than the specified project, purpose limi- tation clauses, know-how ownership and assignment clauses, post-termination restrictive clauses, etc. 6.5 Licensing and Assignment Know-how can be assigned or licensed separately from trade secrets and patents. There are no formali- ties governing know-how assignments and licensing. As such, the general principle of contract in Malay- sia is adopted. Under the Contracts Act 1950, a valid agreement may be in writing oral or by way of con- duct, provided that the following elements are fulfilled: • offer and acceptance; • consideration; • intention to create legal relations; • capacity to contract; • certainty; and
• legality. However, to ensure proper documentation and clar- ity, it is advisable for such agreements to be made in writing. 6.6 Reverse Engineering Reverse engineering is generally lawful in Malaysia, but it depends on how the product and/or informa- tion was obtained, whether confidentiality obligations apply and whether there are any contractual restric- tions between the parties. Accordingly, reverse engi- neering is accepted if it is done from publicly available products. Generally, contractual restrictions prohibiting reverse engineering are acceptable provided that they comply with the Contracts Act 1950 and do not amount to unreasonable restraint of trade. 7. Data, AI and Emerging IP Issues 7.1 Data Rights and Database Protection Malaysia does not have any sui generis database right protection. Depending on the nature of the data, it may be protected under: • the Personal Data Protection Act 2010; • the Copyright Act 1987, as confidential informa- tion; and • by any provisions mandated under the respective agreements entered into between the parties. Accordingly, Malaysian courts adopt a more liberal approach to scraping and data extraction, provided there is no express clause prohibiting the scraping and/or extraction of data. 7.2 AI-Generated Works and Inventorship/ Authorship At this juncture, unlike in some jurisdictions, the laws on AI-generated outputs have not been properly set in stone in Malaysia. Accordingly, the owner of the AI-generated work shall be the employer and/or the human creating the output. As such, Malaysia has no precedent of naming AI as an inventor. Nonetheless, it is believed that, in the absence of such laws, when
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