By Renuka Sena, John Chong, Benjamin Thompson & David Oh
Mindvault Sdn Bhd

This is the first in a two-part series published on 15 December 2003 in the [email protected] pullout of The Edge, Malaysia’s leading Business & Investment Weekly.

It is encouraging to see the increasing number of articles and issues being raised about intellectual property (IP) in the media. A few weeks ago, there was even a call for a “one-stop shop” to enable entrepreneurs to fully protect their works. To an IP practitioner, the idea of a one-stop shop in Malaysia begs the question: Are Malaysians ready for one? And if so, what is the mandate that will be given to this body or agency for it to fulfil the needs of our local IP inventors and creators?

Current approaches to IP in Malaysia focus primarily on legal aspects, for example the introduction of cyberlaws, amendments to existing IP legislation, increased anti-piracy activities and the formation of the Malaysian Intellectual Property Corporation (MIPC).

In order for Malaysia to fully embrace the knowledge economy and to create a vibrant and sustainable environment for the creation of knowledge assets and workers, an integrated IP system needs to be built. By this, we mean a centre where the many different aspects of and provisions for IP are present, of which law and protection make up only one component of the whole infrastructure.

Let us consider what it would take for Malaysia as a nation to create such an infrastructure that will eventually lead to the formation of an integrated and comprehensive one-stop shop.

IP Information Resource

With the advent of the Internet, there are numerous websites that can be accessed to obtain information on the various types of IP. Type “intellectual property” on Google and literally hundreds of links can be accessed. But let’s face it, the reality is that many of these sites are foreign-based and to the uninitiated, this information overload results in confusion as opposed to enlightenment.

It would certainly be beneficial to all Malaysians and foreigners seeking information on Malaysian IP if there was an official website or portal on Malaysian IP laws, local initiatives and service providers and so on.

IP Enforcement

Recently, in response to a survey conducted by the Malaysia Venture Capital Management Bhd (Mavcap)-inititated Cradle Investment Programme (CIP), one of the major concerns that was raised by potential applicants to the fund was the safety of their ideas. The apprehension was that potential applicants were afraid to submit their ideas for fear that they would be hijacked. Why is this an issue? Are we a society of hijackers and thieves? Perhaps the answer can best be articulated in this sentence which was sent around on Merdeka Day in a blog entry entitled “We are We” where the author said, “We condemn the drug addict who stole our RM2 slippers but it’s okay when we steal other people’s intellectual properties”.

This sums up the general attitude towards IP – we want others to respect our IP but we don’t respect the IP of others. Something has to give and in order to create an environment of mutual respect and protection of IP, we as a society need to foster mutual recognition and respect for IP.

A report published by the New Economic Impact Study on April 3 states that “strong IP protection spurs creativity which opens up new opportunities for businesses. When local entrepreneurs have a legitimate way to sell their innovations, they can grow their businesses and hire more people. This in turn drives up spending in the local economy and increases tax revenues to help fund public services”. As such, it can be seen that an effective enforcement regime does not only ensure protection of our intellectual assets but is a crucial step towards economic benefit to all.

So how do we create such an environment? It is suggested that a one-stop enforcement centre be set up, which would have, among others, the following features:

  • Information pertaining to the enforcement of IP rights in both the civil and criminal jurisdictions;

  • Database of service providers for civil enforcement;

  • Online and offline receipt of complaints and information pertaining to IP infringement;

  • Simplified procedures for criminal enforcement including a unified system that is implemented nationwide; and

  • A specialised dispute-resolution tribunal that is not only well-versed in the law but also the technical aspects of IP.

This centre would be the first port of call for all complaints on IP infringement and would manage the entire enforcement process. The centre would also spearhead a nationwide awareness campaign to foster a greater understanding of IP rights protection, conduct specialised skills training for local enforcement, police and customs officials and finally monitor administrative, civil and criminal sanctions in the courts.

IP Marketplace

More than 80% of the worth of most New Economy companies comprise of intangible intellectual assets, Hence IP is known as the new asset of the New Economy. However, what is the use of an asset if it cannot be exploited? After all, IP assets are created for commercial purposes: to produce multiple revenue streams for the company.

In order for an asset to be fully exploited, it must be a liquid asset. In other words, it must be easily disposed off or at least its full revenue potential must be easily realised. For example, if a company would like to use its IP as collateral for a loan, the financial institution can only accept such a collateral if it can easily liquidate the IP in the event the company defaults on the loan. Otherwise, the financial institution would be left with a paper asset with no realisable value and thereby cannot recoup its losses.

IP marketplaces have sprouted all over the globe to provide a forum where IP can be listed, bought, sold, auctioned and licensed. Some of these marketplaces focus on specific IP rights like patents or on specific fields like biotechnology and semiconductors. Other marketplaces list IP from specific sources like universities and public research organisations. There are also region-specific IP marketplaces like in Japan and South Korea.

Malaysia needs its own IP marketplace if it wants to extract maximum value from its innovations. This marketplace should be a one-stop forum which includes the following features, and more:

  • A listing of all local IP that is available for sale or licence;

  • A place where companies can list IP that they need;

  • Introductions to a panel of accredited expert service providers to assist in the commercialising of IP; and

  • Linkages with other IP marketplaces to ensure exposure of Malaysian IP to the rest of the world.

The use of this marketplace should be priced competitively to ensure that it is accessible to not only the large companies with means but also to the cash-strapped individual inventor and even innovative students in schools and universities. It should be a place where Malaysians can also share ideas to further their research and development in creating more indigenous IP and pool their resources to create world-class IP.

IP Registration

Like most countries, Malaysia has a central agency – the MIPC – responsible for the registration of IP rights. Where registration is concerned, its role is to receive the applications filed by the public, examine whether such applications comply with and are acceptable according to the law, formalise the registration documents (where granted) and maintain the records and renewals. However, registration involves more than just the foregoing and much more preliminary work needs to be done before the application is submitted, such as:

  • Giving advice on what form of IP should be applied for. Many people do not understand the difference between patents, trade marks and industrial designs and need help in knowing what they have and what type of application they should submit;

  • Searching for prior rights. IP is such that if someone else has earlier applied for or registered something similar, this will negatively impact your own application. Many people do not realise this nor do they realise that they are able to search for such prior rights before they spend their time and money in making their application; and

  • Preparing the documents for submission. Like all official applications, there is a level of complexity in completing the forms and knowing what to fill up or insert. Incorrect or insufficient documentation can result in the application being rejected or even if granted could result in lesser protection being granted than expected.

Traditionally, the MIPC does not deal with pre-application matters such as the above and the public is required to seek the help of IP professionals, who are few and mainly concentrated in the Klang Valley. The idea behind a one-stop registration agency is a place that can handle all matters relating to IP registration from the pre-application to post-application matters.

As can be seen, the construction of a single one-stop shop which integrates all of the above requires the concerted efforts and contribution of various government and private sector bodies. Despite the mammoth task, the demand for such an integrated infrastructure is one that we very much need if we are to transition to the k-economy gracefully. In the next instalment, we will consider the challenges faced in the commercialisation of IP, consolidated training in IP and the need for government funding for IP-focused initiatives.