Malaysia - Aktif Perunding Sdn Bhd v ZNVA & Associates Sdn Bhd [2018] 7 MLJ 692.

Legal News & Analysis - Asia Pacific - Malaysia - Intellectual Property

31 May, 2018


University Teknologi Malaysia appointed Ahmad Zaki Sdn Bhd ("Main Contractor") as the main contractor for the construction of a student accommodation in Kuala Lumpur ("Project"). The Main Contractor then appointed the plaintiff ("Aktif Perunding Sdn Bhd"), by way of a letter of intent dated 27 September 2013, to be the mechanical and electrical engineering consultant for the Project. Aktif Perunding Sdn Bhd produced certain mechanical and electrical engineering drawings ("Drawings") and in the “Title Block” of the Drawings, it is stated that Aktif Perunding Sdn Bhd was the mechanical and electrical engineer for the project. Aktif Perunding Sdn Bhd was later terminated by the Main Contractor and the defendant ("ZNVA & Associates Sdn Bhd") was appointed as the new consultant for the Project.
 
The High Court Judge considered the following main issues in the present suit: 

 

  • whether the Main Contractor owned copyright in the Drawings under section 26(2)(a) of the Copyright Act 1987 ("Act") because the Main Contractor commissioned Aktif Perunding Sdn Bhd to prepare the Drawings;
  • whether the statement in the title block was evidence that Aktif Perunding Sdn Bhd was the author of the Drawings and therefore the owner of the copyright in the Drawings;
  • if Aktif Perunding Sdn Bhd has no copyright in the Drawings, whether Aktif Perunding Sdn Bhd had moral rights in the Drawings under section 25(2)(a), (b)(i) and (ii) of the Act on the grounds that Aktif Perunding Sdn Bhd was the author of the Drawings; and
  • whether ZNVA & Associates Sdn Bhd committed fraud by replacing Aktif Perunding Sdn Bhd’s name in the title block with ZNVA & Associates Sdn Bhd’s name and subsequently using the Drawings without Aktif Perunding Sdn Bhd’s knowledge and consent. 

 

In the present suit, the High Court Judge invited the Board of Engineers' learned counsel as an amicus curiae in this case in light of the nature and importance of the title block. 

The High Court Judge considered the novel question of whether a company has “moral rights” in a work under section 25(2) of the Act.
 
Who was the author of the Drawings?

The High Court Judge was satisfied that Aktif Perunding Sdn Bhd was the author of the Drawings on the grounds that Aktif Perunding Sdn Bhd had given evidence that its engineering team was the “artist” of the Drawings within the meaning of “author” under section 3(c) of the Act and that the title block initially stated Aktif Perunding Sdn Bhd’s name. Accordingly, the title block provided information on the ownership and authorship of the Drawings in question.

However, the High Court Judge found that copyright in the Drawings subsisted in the Main Contractor by reason of operation of law under section 26(2)(a) of the Act and the contents of the title block cannot therefore deprive the Main Contractor of such right.
 
Can Aktif Perunding Sdn Bhd have moral rights in the Drawings?

The High Court Judge held that the Act only confers moral rights on the author of a work who is a natural person, in which it would not apply in the present suit where Aktif Perunding Sdn Bhd is a company. This is based on the following reasons: 

 

  • Section 25(2), (4), (5) and (6) of the Act have expressly provided for the scenario when an author of a work has died and the author’s personal representative may then act for the author’s estate. This evinces the Parliament’s intention to confine moral rights to an individual author only.
  • Section 25(2)(b)(ii) of the Act expressly proved for "distortion, mutilation or modification" of a work which "might reasonably" be regarded as adversely affecting the author’s honour. The term "honour" can only refer to an author who is a natural person.
  • The entire provision of section 25 of the Act does not refer at all to the winding up or dissolution of a corporate author. 

 

Whether ZNVA & Associates Sdn Bhd had defrauded Aktif Perunding Sdn Bhd

Aktif Perunding Sdn Bhd had failed to discharge the legal burden under section 101(1) and 102 of the Evidence Act 1950 to prove the allegations of fraud on a balance of probabilities. Even if there is fraud, Aktif Perunding Sdn Bhd had failed to discharge the legal onus to prove any loss or damage due to the fraud.

Conclusion

The novel issue of whether a non-natural person such as a company could have moral rights in a work has been clarified by the High Court Judge in this case. It is held that only a natural person can be conferred moral rights in a work. 

 

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For further information, please contact:

 

Elyse Diong Tze Mei, Shearn Delamore & Co​

elysediong@shearndelamore.com