The Impact of AI on Intellectual Property Rights in Malaysia

Artificial Intelligence (AI) has emerged as a transformative force across industries, fundamentally altering business operations and reshaping global economies. Malaysia, as a dynamic nation, has also begun to embrace AI technologies to enhance productivity and foster innovation. In this context, AI refers to the development of computer systems with the capacity to perform tasks traditionally reserved for human, including problem-solving, learning, and decision-making.

Within the realm of intellectual property, a diverse range of legal safeguards, including copyright and patent, exists to protect the various intellectual creations stemming from human ingenuity.

Thus, as AI continues its deep integration into various sectors, it gives rise to compelling questions surrounding regarding intellectual property rights.

Copyright

In traditional copyright, the creator of a work typically assumes ownership. However, AI blurs the lines of authorship. The question arises: should authorship rest with the human programmer who designed the AI system, the individual providing input or prompts to the AI, or can AI entities claim copyright due to their ability to autonomously generate content? This query not only challenges the conventional understanding of authorship but also carries profound implications for the development of intellectual property law.

This debate over whether AI-generated work is protected by the Copyright Act 1987 resolves around the language used in the Act, which appears to primarily address the rights of individuals and legal entities. For instance, Section 10 of the Copyright Act provides that copyright subsists in every work eligible for copyright of which the author (or in the case of a work of joint authorship, any of the authors) is, at the time when the work is made, a qualified person.

A ‘qualified person’ is defined under the Copyright Act as:

• in relation to an individual, a person who is a citizen of, or a permanent resident in, Malaysia; and
• in relation to a body corporate, a body corporate established in Malaysia and constituted or vested with legal personality under the laws of Malaysia.

While this issue remains untested in the Malaysian courts, the existing legal framework suggests that AI-created works may not qualify for copyright protection in Malaysia. This is because AI-created works are arguably computer-generated, and the creator, AI, does not quite fit the definition of a ‘qualified person’ under the law.

Another aspect to contemplate is, in the event the user edits the AI-generated output and transforms it into their own independent creation, fulfilling the conditions in Section 7 of the Copyright Act (namely, (a) expending sufficient effort to render the work original in character and (b) reducing the work to material form), whether such an independent creation would be eligible for copyright protection. This scenario raises intriguing questions about the interplay between AI and human creativity, and the potential evolution of copyright law to accommodate these new dynamics.

 

Patent

Shifting the focus to patent rights, this issue becomes particularly significant as patent rights play a pivotal role in safeguarding innovations and technological advancements. However, as AI continues to evolve, a complex and pressing question emerges: should AI-generated innovations be eligible for patent protection, and if so, who should be attributed as the rightful inventor?

This question was considered in the English case of Thaler v Comptroller General of Patents Trade Marks and Designs [2021] EWCA Civ 1374 by the English Court of Appeal in September 2021, in which the High Court’s decision that an inventor could not be a machine and must instead be a ‘natural person’ was upheld.

The case involved Dr. Stephen Thaler’s AI system called DABUS, which generated inventions independently. Thaler claimed ownership of the patent applications filed in DABUS’s name but was denied by the UK Intellectual Property Office (“UKIPO”).

Dr. Thaler challenged the UKIPO’s decision in the High Court. Nevertheless, both the High Court and the Court of Appeal upheld the UKIPO’s decision, stating that DABUS could not be considered the inventor or have the ability to transfer patent rights to Thaler because it was not a ‘natural person’. This aligns generally with the approach of other major patent jurisdictions, including Australia, Canada, Germany, and the US, regarding similar applications by Dr. Thaler.

Subsequently, Dr. Thaler appealed to the UK Supreme Court, which marked the first time his case was heard by an apex-level court. Dr. Thaler’s appeal was based on, inter alia, the following points:

1. He is entitled to be granted patents for inventions created by DABUS and that the owner of an AI machine is entitled to inventions generated by that machine and to grants of patents for the inventions that are patentable; and
2. Section 13(2) of the UK Patents Act 1977 (“PA 1977”) does not require an applicant to name a natural person as an inventor.

The Supreme Court’s final decision in this case is expected to be handed down some time later this year and the decision is expected to have significant implications for the protection of AI-created inventions in the UK. The Thaler case though not a binding precedent in Malaysia, is likely to be persuasive.

Within the legal framework of the Malaysian Patent Act 1983 (“PA 1983”), the term “inventor” is not defined, while Section 12 defines “invention” as “an idea of an inventor which permits in practice the solution to a specific problem in the field of technology.”

It is essential to consider Section 18 of PA 1983, which stipulates that the right to apply for a patentable invention is vested in the inventor. When the applicant is not the inventor, a statement justifying the rights to make an application for said invention (Regulation 10 Patents Regulations 1986) is required. Thus, even if an AI may be recognised as an inventor, the patent officer or the Court will have to be satisfied that the applicant, who is not the inventor, legitimately holds the rights to the invention. This requires addressing the question of how ownership can be transferred from the AI to the applicant. Ultimately, whether an AI can overcome these legal hurdles remain to be tested in Malaysian courts.

 

Conclusion

While AI introduces innovation to various industries, the manner in which how humans employ it holds paramount significance from a legal perspective. Human creativity and innovation must receive due recognition. If AI has the capability to generate valuable content and innovations, there exists a potential to diminish the incentives for human creators and innovators. Consequently, it is imperative to establish and maintain a legal framework that effectively balances the contributions of AI and human agents to foster a thriving intellectual property landscape.