IP the way to go for SME entrepreneurs

This article is in conjunction with World Intellectual Property Day which is observed on April 26 annually. In Malaysia, the national theme for the day this year is ‘IP & SMEs: Taking Your Ideas to Market’.

KUALA LUMPUR – Every business is sparked by an idea, and the reality is that the millions of small and medium enterprises (SMEs) operating around the world always start their day with new business ideas and bringing them to the marketplace.

And so, World Intellectual Property Day is observed for us to learn more about how these ideas can be converted into intellectual property (IP), in addition to understanding the important role that IP plays in driving innovation and the creativity of a business.

Advertisement

Based on this year’s theme of the national celebration, it is very important for SME entrepreneurs in Malaysia to register their products as IP because registered IP can be the most important asset that can drive the development of the business ecosystem, economic recovery and human development.

Intellectual Property Corporation of Malaysia (MyIPO) chairman Datuk Mohamad Alamin, when contacted, explained that SMEs make up about 90 per cent of businesses worldwide, use about 50 per cent of the global workforce and are capable of generating up to 40 per cent of a country’s national income.

However, ironically, many SME entrepreneurs, especially in Malaysia, do not realise that they can use IP and all its rights to build a stronger, more competitive and resilient business, especially in the face of the current difficult COVID-19 pandemic challenge.

Six components

Mohamad explained that IP is a creation of the mind – encompassing everything from works of art to inventions, to commercial signs such as names, symbols and designs that are used for trading.

According to him, IP consists of six components, namely:

PATENT – a patent is an exclusive right granted for an invention, which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem.

TRADEMARK – a trademark is any sign that includes names, signatures, words, numerals, or any combination thereof, and is capable of being represented graphically to distinguish goods or services of one undertaking from those of other undertakings.

INDUSTRIAL DESIGN – an industrial design means features of shape, configuration, pattern or ornament applied to an article which appeal to the eyes.

GEOGRAPHICAL INDICATION – a geographical indication is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. The qualities, reputation or characteristics of the product should be essentially due to the place of origin.

COPYRIGHT – a copyright is an exclusive right given to copyright owners for a certain period of time over their copyrighted works.

LAYOUT-DESIGN OF INTEGRATED CIRCUITS – a layout-design of an integrated circuit is the three-dimensional disposition of the elements of an integrated circuit and some or all of the interconnections of the integrated circuit or such three-dimensional disposition prepared for an integrated circuit intended for manufacture.

Mohamad further explained that each component of the IP is governed by its own Act, such as the Trademark Act 2019, the Patent Act 1983 and the Copyright Act 1987, which are supervised by MyIPO.

He also stressed that a product produced must be registered with MyIPO first to protect it from being copied by others. Registering on MyIPO to get the exclusive right to an invention also proves that an inventor is really serious about generating income from his invention.

He said innovators should avoid marketing their products or disclosing them to third parties before they are protected to prevent the product from being imitated by others.

Need to increase awareness

Nevertheless, Mohamad lamented that an issue still to be considered is the low level of awareness in the community, which is one of the main factors why people in the country are not registering their IP, coupled with the lack of knowledge about the advantages and benefits of IP registration to businesses.

“There remains a perception among SME entrepreneurs that IP protection is just an option. We also found out that generally, they pay less attention to the protection of innovations just because it is ‘not mandatory’ but they do not realise that their IP is exposed to the risk of being plagiarised and even registered as someone else’s IP.

“Statistics show that the percentage of IP applications dropped from 24,245 (in 2019) to only 20,101 (in 2020). Similarly, applications from foreigners dropped from 31,941 (in 2019) to 30,797 (in 2020). Local IP applications are still low compared to the trend in the Southeast Asian region, and this is also affected by the spread of COVID-19 besides the implementation of the Movement Control Order (in March last year), with MyIPO having restricted IP filing to online only.

“Besides that, industry players in Malaysia have not yet seen the importance of IP protection to the development of their business. Therefore, MyIPO will continue with awareness campaigns on IP rights to boost IP applications,” he said.

Mohamad said there is also a misconception among entrepreneurs that IP registration is expensive, when in reality the actual cost of IP registration is very affordable.

“For example, trademark registration only requires entrepreneurs to spend RM950 once for a period of 10 years. This means their trademarks will be protected by law for 10 years and can be renewed after that period.

“Registration is easy and can be done by customers manually at MyIPO customer service counters or online at iponline2u.myipo.gov.my,” he said.

Explaining the process after an IP is registered, Mohamad said MyIPO will make an examination to ensure that it is new and not yet owned by any party, apart from also making sure it complies with the IP acts.

“If passed, MyIPO will gazette the IP in the Government Gazette and the IP Official Journal which, in turn, will issue a certificate to the owner of the IP. The rightful owner of an IP can take legal action, either criminal or civil, if it is found that someone is abusing their IP,” he said.

Staying the course

Meanwhile, SME Corporation Malaysia chief executive officer Rizal Nainy said it is important for entrepreneurs to focus on short-term as well as long-term business plans to ensure that the rights and originality of their products or services can survive in the market and are not easily imitated by other entrepreneurs.

“Therefore, SME Corp Malaysia is still continuing to provide awareness on IP through various channels to ensure entrepreneurs know their rights, as well as encourage entrepreneurs to register their IP to protect their businesses in the long run,” he said.

Rizal explained that among SME Corp Malaysia’s efforts to further increase SME awareness on IP were through ‘Soal Usahawan’ talk sessions, announcements on social media, briefings and business advisory services provided by SME Corp Malaysia Business Counsellors.

“The financial assistance provided also covers the scope of IP certification and registration through programmes like the Business Accelerator Programme (BAP), Bumiputera Enterprise Enhancement Programme (BEEP), Inclusive Innovation Programme, Bumiputera Export Promotion Programme right up to business start-up programmes such as Tunas Usahawan Belia Bumiputera (TUBE) where entrepreneurs can apply for grants to implement activities related to intellectual property registration.

“Besides that, the online information portal at smeinfo.com.my operated by SME Corp Malaysia also contains information on IP. This is part of our role as the SME central coordinating agency in channelling information on SME development programmes, including initiatives involving IP registration,” he said.