Intellectual properties must be guarded if the country wants to push towards an innovation economy.
Getting a patent is like buying insurance – it’s not something people think they need until it’s too late.
Australian patent attorney Leon Allen enjoys drawing parallels between the two.
Running with the metaphor, he says it’s like an insurance policy – there are good and bad ones. In the case of patents, the quality of the initial application defines how likely it will hold up to challenges in the future.
“Patents provide an insurance policy for your R&D. It stops people from free riding on what you’ve made, the same way people might cash-in on your reputation if there’s no trademark,” he says.
Allen is also the CEO of Qantm Intellectual Property Ltd which has just acquired Advanz Fidelis IP Sdn Bhd to consolidate its position in the region.
Advanz CEO Chuah Jern Ern believes that as Malaysia strives to be an innovative nation, Intellectual Property (IP) rights will play a bigger role in ensuring local inventors don’t have their ideas “stolen” and commercialised by other countries.
“Malaysia used to be very commodity driven with palm, gas and rubber. Commodities are driven by the lowest pricing, while innovation gives products that extra value,” he says, explaining why innovation is key to improving the nation’s lot.
Chuah says a healthy market should aim for a ratio of about 50:50 for local to international registrations.
“When I started doing IP 25 years ago, you’d be lucky to get one local registration in 10 applications, now it’s one in four,” he says.
Asked if the region has a reputation of playing fast and loose with IP rights, Allen said that’s no longer the case.
“The enforcement used to be more lax, but now most governments in the region have drafted laws to protect IP over the last 20 to 30 years. The reciprocity between the countries also help ensure rights are respected,” Allen says, pointing out that Malaysia even has a specialised court for IP disputes.
He reveals that in Malaysia, the patent chasers are mostly technology companies from electronics to biotech, while trademark- intensive industries are mostly food & beverage franchises.
Patents aren’t just for big corporations – it’s even more important for universities and SMEs (small and medium enterprises) that have the idea and design but not the funds to take it to market, says Ross Clark, managing principal of Davies Collison Cave Asia, a company under Qantm.
Startups, for instance, are beginning to realise the need for IP protection.
“Startups are fun to work with, the idea is their baby. Sure they have a limited budget, but they’re genuinely appreciative for the advice they can get,” says Clark.
He explains that having strong IP protection makes a startup a surer bet, as VCs (venture capitalist) know the idea can’t be copied easily, promising better return on investment.
That said, startups are often driven by software or disruptive business practices, which are hard to protect.
Clark, a computer engineer before he became an attorney, says patenting software and business methods is incredibly difficult, especially automating processes.
IP registration is an adversarial process, as regulators take a position of stopping petty patenting attempts from being made.
In the United States, fewer than 50% of applications get through. It’s even more brutal in the business processes field, where less than 3% of applications are granted.
“You can register anything you want, but will it be approved is the question. Even if it is, others can challenge you in court,” he says.
Filing patents, especially for the fast moving tech field, is often a balancing act.
Patents have to be filed before a product is commercialised but companies are only given 18 months before the patent is published. If the product is delayed, for instance, the public and rivals can take a peek at the technology before it’s ready.
Asked if patents also halt innovation as large companies sometimes buy them just to take them off the market, Allen says that’s a common misconception.
He says not only would it be a waste of money to buy smaller patent holders and not innovate on the idea, but there are also rules in place to prevent companies from sitting on a patent for too long.
For example, Sony Pictures has to keep producing Spider-Man movies to avoid losing the rights to the franchise.