Protecting Intellectual Property


Economic News

22 Jul 2010
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The government has announced a $1.4bn fund dedicated to boost the development and protection of intellectual property (IP) in Malaysia. The fund, which will be allocated over five years, is part of a new national IP policy that will initially focus on the enforcement and protection of the sector. The ultimate objective is to commercialise IP and turn it into a profitable revenue stream for the country, as well as making the country a regional hub for IP research. Prime Minister Abdullah Ahmad Badawi said he believed the policy would encourage more commercialisation of IP and draw in more investment and technology transfers.

Malaysia has often been criticised for weak IP enforcement, particularly in the area of software. At 60%, it has one of the highest rates of illegal software use in the Asia Pacific region. In terms of pirated exports, the International Intellectual Property Alliance's 2006 report called for Malaysia to clamp down on the export of pirated goods, citing that many made-in-Malaysia pirated discs make their way to Thailand, the Philippines, New Zealand, Belgium, Germany and other countries.

The government, over the past few years, has been cracking down heavily on the sale and production of pirated goods, establishing a special police task force that has carried out a number of high profile raids, seizures and arrests. The trade ministry has confiscated illegal software and equipment worth $315,000 so far in 2007, said Iskandar Halim Sulaiman, the ministry's deputy director general. The government reported that last year Malaysian authorities seized from businesses more than 28,000 copies of pirated software worth $6.6m.

The government's first initiative is to establish an Intellectual Property Court. The court will be launched in June and is hoped to strengthen the legal framework for IP as well as speedily hear and resolve cases of infringement.

Abdullah said, "This is an incentive to creators and innovators to register their intellectual property. It will also serve as a warning to individuals and companies not to breach intellectual property."

The second major focus of the IP policy will be to encourage investment, innovation and technological development within the country. With it becoming increasingly difficult to compete with countries such as China on price, Malaysia is looking to move up the value chain. Abdullah said, "I look forward to the day when Malaysians are known around the world as inventors and not mere users of technology."

About half of the money will be spent in 2009 and 2010 to establish an IP academy set for launch in 2009. Madya Rohazar Wati Zuallcobley, deputy director general of the Intellectual Property Corporation of Malaysia, told OBG, "We not only want to improve the speed of settlement resolution and the application process, but through the establishment of an IP Academy, instruct people how to use the system, and commercialize their innovations."

A key component of encouraging innovation will be improving the length of time and the cost for patents to be approved. Abdullah stated that the approval process in Malaysia is taking an average of five years compared to the global standards of three-and-a-half. He is urging authorities to speed up the process, as delays can render a product outdated and discourage creators and innovators from registering their intellectual property domestically.

Zuallcobley told OBG, "The intention of the new national intellectual property policy is for Malaysia and its population to gain an IP awareness and adopt an IP mentality. This will shift the focus, workload and resources away from enforcement, so that it can be focused elsewhere - mainly on IP development and innovation. Only once people feel they have adequate protection, innovation will come."

Developing a strong IP infrastructure should go a long way to encouraging outside investors to do joint research in the field of biotechnology, something Malaysia is heavily promoting at the moment. Biotech firms often make no money for years; sustaining themselves on the potential earnings from an invention they have obtained the rights for. Patents, therefore, are the main assets when it comes to scientific research and biotech companies looking to enter Malaysia need to be assured that there exists a framework to protect the products they develop.

An additional area where a commitment to IP could have positive implications is the pending free trade agreement with the United States. IP protection is a major area of concern for the US, as it has been estimated that US businesses suffer about $250bn losses annually due to piracy and theft.

Minister of International Trade and Industry Rafidah Aziz said Malaysia is committed to its multilateral obligations under the World Trade Organisation, World Intellectual Property Organisation and related IP international conventions, where Malaysia is a party to the Paris and Berne Conventions.

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