Monetisation of IP in Malaysia
The Federal Government Budget for 2013 allocated RM200 million (approximately $60 million) in funding to oversee the creation of an IP financing scheme.
In light of these objectives, there has been significant activity in the IP valuation sphere and the IP Corporation of Malaysia (MyIPO) has set up a framework for the training, assessment and qualification of IP valuers. The IP Valuation Training Module for IP valuers, which was created to serve this purpose, is conducted in tranches and introduces participants to IP rights, valuation methods, negotiation, IP management, drafting of practical valuation reports, and hands-on training.
In September 2013 the training module was completed by the pioneer batch who had undergone the course, and due to its success, MyIPO has launched further series of its IP valuation courses.
In addition to the training of IP valuers, certain amendments have also been made to IP laws in Malaysia to support the objective of enabling the collateralisation of IP. The amendments to the Malaysian Industrial Designs Act 1996, which came into effect on July 1, 2013, clarify certain rights of owners, and place emphasis on the eligibility of registered designs to be used as collateral.
"The Amending Act assists in providing the framework to encourage the monetisation of IP, for example, requiring assignments to be made in writing."
The Amending Act assists in providing the framework to encourage the monetisation of IP, for example, requiring assignments to be made in writing including those made in relation to assignments by way of security, clarifying that a registered design may be the subject of a security interest in the same way as other personal or moveable property and requiring that such assignments be recorded with the registrar, including where a person becomes entitled to a registered industrial design by way of an assignment or transmission or by operation of law or security interest transactions.
The Amending Act is the first piece of legislation which provides for this and is consistent with Malaysia’s recent plans to encourage the monetisation of IP. Similar amendments are anticipated for the Trademarks Act, the Copyright Act and the Patents Act.
In step with the legislation’s objectives, MyIPO in cooperation with the Ministry of Finance and the Ministry of Domestic Trade, Cooperatives and Consumerism also hosted the Global IP Valuation Conference in November 2013 in Kuala Lumpur. The purpose of the global event was to bring together key industry players, influencers, stakeholders and policymakers to share their best practices and experience in creating and extracting value from IP assets, as well as to discuss the growing interest in transforming IP assets as an alternative form of security.
Attendees discussed and considered the various aspects of IP exploitation, ranging from new methods of IP monetisation to exploring the intricacies of IP valuation. During the conference, the Malaysian IP Valuation Model was launched by the Minister of Domestic Trade, Cooperatives and Consumerism, Yang Berhormat Dato’ Hasan bin Malek.
These are just a few of the Malaysian government’s initiatives to encourage and promote monetisation of IP rights in Malaysia. It is expected that more initiatives will be launched in the near future for this purpose, including creation or collaboration of an IP marketplace to facilitate commercial dealings in, and sale of, IP rights as assets.
Chew Kherk Ying is a partner at Wong & Partners. She can be contacted at: kherkying.chew@wongpartners.com
Chen Hong Sze is an associate at Wong & Partners. She can be contacted at: hongsze.chen@wongpartners.com
