Infringing patent? Carry on


  • News
  • Wednesday, 17 Jun 2015

The talk, held at the Doubletree by Hilton, was done in an informal setting - M. Azhar Arif/The Star 10 June 2015 91230155

EVEN IF it is infringing on somebody’s patent, a startup should go ahead and try to see if they can build a viable business, said a panellist at the Global Intellectual Property Valuation Conference 2015 earlier this month.

“You should just go and do it and see if there is traction,” said Earl Valencia, president and co-founder of Philippines-based incubator and accelerator IdeaSpace Foundation, at a session entitled Intellectual Propertyfor Startups and New Ventures.

“In business, nobody wants to really shut you down,” he assured.

“If (your business) infringes on (somebody’s IP), deal with it. If you grow big, all they want is royalty from you,” he added.

Valencia stressed that the fear of IP infringement should not be an excuse to not proceed with a startup as entrepreneurship is all about taking risk — and in this case, you weigh the risk of being sued and the possibility of becoming a billion-dollar company.

Asked if investors would take a similar viewpoint before investing in a startup with potential patent issues, Valencia, whose incubator and accelerator has invested in about 38 companies since 2012, said a good investor would make sure to do their own due diligence and weigh the risks.

“(But) we always make sure that the accountants and lawyers do not dictate our investment strategy. They are dictated by the market and customers,” he stressed.

On another note, Adastra IP (M) Sdn Bhd director Mohan Kodivel said startups should not fear IP but rather, understand their own IP and, at the same time, understand how they could lose out if they do not file a patent.

“When an interested investor sees your technology but you have not filed your patent, there is a chance they may not invest in you,” Mohan said.

According to Valencia, about 40% of the startups IdeaSpace invested in had patents and 70% had trademarks, but each investment was based on how viable they were in the markets and not solely on IP.

He added that startups should not base their whole business strategy on patents alone.

He noted, however, that patents would be useful when startups negotiate with big companies as it gives startups credibility and offers some degree of protection.

“Otherwise, big companies may tell you it is a good idea, and then start developing it themselves,” Valencia warned.

Hub.IT founder Bobby Liu, who moderated the talk, concluded the session with a Chinese proverb, saying, “If your problem is one involving money, then it is not a a problem.”

This ties in with what Valencia stressed about nobody really wanting to shut down startups.

In the world of business, it is about how every player in the ecosystem benefits together.

The conference, held in Kuala Lumpur on June 9 and 10, was organised by Intellectual Property Corp of Malaysia (MyIPO) in cooperation with the Ministry of Domestic Trade, Cooperatives and Consumerism and Finance Ministry. Themed “Ideas2Value: Accelerate Asean”, it brought together entrepeneurs, regulators and intellectual property experts.

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