1 February 2013Jurisdiction reportsChew Kherk Ying and Sonia Ong

New focus on IP valuation in 2013

The Malaysian government recently announced, in connection with its 2013 budget, that an intellectual property financing fund scheme will be set up with an allocation of RM200 million (US$65 million). The scheme will offer project-based loans via Malaysia's venture capital fund company, Malaysia Debt Ventures Berhad (MDV).

The government will provide a 2 percent interest rate subsidy and a guarantee of 50 percent of the value of the IP through the Credit Guarantee Corporation Malaysia Berhad, with the remaining 50 percent borne by banks.

The government has also allocated RM19 million (US$6 million) for training programmes for local IP valuers.

“SMALL AND MEDIUM ENTERPRISES AND TECHNOLOGY COMPANIES ARE PARTICULARLY EXCITED ABOUT THE INTELLECTUAL PROPERTY FINANCING FUND SCHEME.”

These training programmes will be run by the Intellectual Property Corporation of Malaysia (IPCM) in collaboration with MDV and Multimedia Development Corporation (MDeC), Malaysia's national information and communication technology (ICT) custodian, which is wholly owned by the government. Local banks are already undergoing training for IP valuation and will start accepting such assets as collateral come January next year.

MDeC recently announced that it will be launching an IP valuation model that will serve as a guide for banks and other financial institutions on the methods used in IP valuation, which will hopefully encourage the acceptance of IP as collateral for loans. MDeC is currently working with the IPCM to obtain all necessary approvals for the valuation model.

The government also intends to establish an IP rights market platform although details of its implementation have not yet been finalized.

Small and medium enterprises and technology companies are particularly excited about the IP Financing Fund scheme as they are now able to use their IP as collateral to obtain funding for business expansion, to commercialise their inventions or undertake further research and development, all of which are in line with the government's focus to spur innovation and increase productivity.

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