What happens when geopolitics starts affecting how patented technology is used? Excel V. Dyquiangco examines Malaysia’s patent safeguards and the effects of geopolitical pressures on licensing, enforcement and the commercial value of patent portfolios.

For decades, patents have served a familiar purpose: protecting inventions, rewarding innovation and giving businesses a period of exclusivity in which to commercialize their technology. But in an increasingly fragmented global economy, the value of a patent extends far beyond the boundaries of intellectual property law. So, what happens to a patent when geopolitics enters the equation?

Malaysia offers a particularly interesting case study. Its Patents Act 1983 already contains several provisions designed to safeguard national security while protecting the country’s technological and innovative interests. Section 23A, for instance, requires patent applications for inventions made by Malaysian residents – including non-citizens residing in Malaysia – to be filed domestically first before an application can be submitted abroad, unless written authorization is obtained from the Registrar of Patents. The requirement effectively serves as an initial security checkpoint, allowing potentially sensitive inventions developed locally to be reviewed and protected domestically before they are disclosed in other jurisdictions.

Section 30A also provides an additional safeguard by empowering the registrar to issue directions prohibiting or restricting the publication of a domestic patent application where disclosure of its contents “might be prejudicial to the interest or security of the nation.” While such an application may continue through the examination process and reach the point at which it is otherwise ready for grant, a patent will not ultimately be granted while the restriction remains in place.

The act goes further under Section 85, which gives the registrar discretion to refuse the grant of a patent altogether for products or processes falling within categories prescribed by the minister where granting the patent would be prejudicial to the interests or security of the nation.

The government also has broader powers under Section 84 to exploit a patented invention, or authorize a third party to do so, without the patent owner’s consent in circumstances involving a national emergency or the public interest. These grounds include national security, nutrition, health and the development of other vital sectors of the national economy. Such use remains subject to adequate remuneration for the patent owner.

Notably, Section 84(5) specifically addresses semiconductor technology. Where the invention relates to this field, government use may be authorised only for public non-commercial purposes or to remedy anti-competitive conduct by the patent owner. The provision underscores the strategic importance of semiconductor technology and illustrates how patent rights can intersect directly with broader considerations of national security and economic resilience.

“I have not seen the government actually invoke these provisions against any semiconductor or AI-related patent to date,” said Yang Shuh Gooi, a partner at Skrine in Kuala Lumpur. “That said, they provide a robust toolkit for the Malaysian government to restrict or exploit patents for national security reasons if the need ever arises.”

Alyshea Low, a partner at the same firm, added that Malaysia does not generally use patents as a national security tool. “Instead, it relies on industrial policy, strategic trade controls and investment initiatives to strengthen critical sectors such as semiconductors and AI,” she said. “While section 84 of the Patents Act 1983 allows government use of patented inventions in certain public-interest situations, including national security, this is the exception rather than the norm. In practice, initiatives such as Malaysia’s National Semiconductor Strategy and export-control measures for advanced AI chips demonstrate that the government is focused on building domestic capabilities and securing technology supply chains rather than using patent rights as a regulatory instrument.”

Cross-border patent enforcement

With the geopolitical landscape unlikely to become simpler, trade disputes can alter investment decisions, export controls can change access to technology and supply-chain disruptions can force companies to relocate production. In addition, strategic industries can suddenly become national security priorities.

In such an environment, patents can provide companies with something more valuable than exclusivity: strategic options.

But in Malaysia, there have not been any immediate or apparent impact on cross-border patent enforcement and licensing – just yet. “Given the territoriality of patents, patent infringement cases continue to be decided based on local patent legislation and principles established through case law. That said, Malaysia is increasingly one of the battlegrounds in larger global patent licensing disputes,” said Gooi.

“While there have not been any successful SEP (standard essential patent) enforcement cases in Malaysia, and while Malaysia may not be the main forum for setting FRAND (fair, reasonable and non-discriminatory) rates, Malaysia may increasingly be a secondary enforcement venue within a broader global patent dispute.”

This was echoed by Low, who said that despite this, they can significantly affect how technology is commercialized. “Patent licensing today often involves multiple jurisdictions across research and development, manufacturing and distribution. As a result, sanctions, export controls and restrictions on technology transfers can disrupt licensing arrangements even when the underlying patent remains enforceable. For businesses, the practical challenge is increasingly not whether they own the patent, but whether they can continue to use, transfer or monetize the technology across borders,” she said.

But what happens when global companies are located in politically volatile regions? “The main risk I foresee is continuity and maintenance of the patents,” said Gooi. “If a country is going through political volatility, a lot can theoretically disrupt the patent renewal cycle, such as sanctions that complicate payments to the country, local agents being non-operational or banking channels generally being unavailable. If any of these unforeseeable events cause major disruptions during a crucial patent renewal period, there is a real danger of the company’s patent assets lapsing with limited options for reinstatement.”

“In jurisdictions where government-use and compulsory licensing powers are available, there is the added risk of such powers being exercised against foreign rightsholders. This is most acute when it comes to pharmaceutical patents for novel drugs treating a widespread disease. A politically unstable government may be more inclined to exercise such rights, and there may be little that can be done to stop it. The patent then loses its monopolistic value.”

For Low, the biggest risks are not always legal, but commercial. “Political instability may result in sanctions, export controls or technology transfer restrictions that affect patent exploitation,” she said. “More significantly, disruptions to manufacturing and supply chains can undermine the commercial value of even a strong patent portfolio. Companies that depend heavily on a single jurisdiction for production or critical components face increased vulnerability when geopolitical conditions change. In today’s environment, concentration risk can be more damaging than infringement risk.”

Protecting portfolios

So, what happens now? “IP professionals should build contingencies into their filing and maintenance practice, to ensure that a client’s portfolio can be kept alive before a crisis occurs. In practice, that likely means having backup local agents or payment channels in jurisdictions that are identified as high-risk,” said Gooi. 

“IP professionals should conduct a geopolitical risk audit of their clients’ portfolios,” Low added. “This means looking beyond patent ownership and enforcement to assess where technology is developed, manufactured, licensed and commercialized, as well as identifying exposure to sanctions, export controls and other regulatory measures. The key question is no longer whether a patent portfolio is protected today, but whether the business can continue operating effectively if the geopolitical landscape changes tomorrow.”