Friday, August 10, 2018

Parting Words of Dato Shamsiah, Former DG MyIPO

Picture by MyIPO

MyIPO bid farewell to Dato Shamsiah Kamaruddin, Director General of MyIPO who served up to 25 years in the organization until her retirement. A farewell was organized on 26 July 2018.

MyIPO was incorporated in 2003 as a government agency so that it can efficiently manage financial and human resources to run programs that encourage the growth of intellectual property in the country. This year is the 15th anniversary of MyIPO. In an interview conducted by Utusan Melayu published on 5 Mar 2018, she shared her experience in running the organization.

"For 15 years, we experience growth of intellectual property applications up to 125%. As a form of  appreciation for local innovation, MyIPO organized National IP Award ceremony annually since 2006. Through this award, our country produced more local innovators including those that are acknowledged internationally," shared Dato Shamsiah as her biggest achievement.

She also mentioned that through governments efforts, Malaysia was removed from USTR Priority Watchlist in 2012. Other than that, MyIPO has established cooperation with ASEAN countries as ASEAN Working Froup in Intellectual Property Co-operation (AWGIPC) to modernize intellectual property development in ASEAN.

Dato Shamsiah said that MyIPO acts as a guardian of intellectual property in Malaysia. The laws of intellectual property in Malaysia is in line with international intellectual property laws such as Paris Convention, Patent Cooperation Treaty, WIPO Copyright Treaty and WIPO Performaces and Phonograms Treaty. She also said that MyIPO conducts law review to improve and hasten intellectual property protection.

She wishes that MyIPO continually improve the National IP policy launched in 2007 through international cooperation by harmonizing procedures and regulations in intellectual property registration.

The full interview in Utusan Melayu
(http://www.utusan.com.my/rencana/utama/myipo-perkasa-harta-intelek-negara-1.620849)

Monday, July 2, 2018

The Patent Cooperation Treaty at 40

Today inventors around the world have access to a system, known as the Patent Cooperation Treaty (PCT), which offers a cost-effective way to seek patent protection for their high-value technologies in multiple countries. That system, which has just celebrated its 40th year of operation, has become an essential component of the international patent system.

The PCT offers users a number of advantages. In particular, applicants can postpone decisions about the countries in which they want to seek patent protection, and the significant associated costs, by up to 18 months longer than under the traditional patent system. They can also benefit from valuable feedback about the potential patentability of their inventions; at present, 22 patent offices that serve as International Searching Authorities partner with WIPO to provide users with such feedback. This additional time and feedback creates opportunities for applicants to continue the technical development of their invention, test the market for it and, if necessary, find business partners and secure financing.
The PCT also offers national and regional patent offices a number of advantages, in particular, by providing them with the same value-added information on the potential patentability of an invention as provided to applicants, and by freeing those offices from having to evaluate the formal aspects of the application. In this way, the PCT process facilitates decision-making and can increase confidence in the quality of the patents if ultimately granted.
“WIPO’s Patent Cooperation Treaty is a cornerstone of our IP business,” notes Alexander Kurz, Executive Vice President for Human Resources, Legal Affairs and Intellectual Property Management, Fraunhofer, Europe’s largest applied research organization. “It provides a great deal of legal security and gives us additional time to find the optimal commercial partner and the most appropriate market for our inventions. It is an excellent way to establish IP rights internationally. That’s why we use it,” he says.
At its core, the PCT addresses two very real needs and this is the key to its remarkable success. On the one hand, it offers applicants a practical tool to assist them in seeking patent protection in international markets. And on the other hand, for the patent offices of PCT member countries, it serves as an effective work-sharing platform and creates opportunities to generate efficiency gains in processing international patent applications.
The partnership of national and regional patent offices of PCT member countries has also been central to the PCT’s success. Their engagement, insights and experiences, along with feedback from users, has enabled the system to evolve and respond to practical real-world needs. That, coupled with a dedicated international team of support staff, both at WIPO’s headquarters and within the patent offices of member countries, has made it possible for the PCT to become recognized as a reliable and high-quality service provider. - WIPO Magazine

Call for review of (IP) tax incentives

SMART Glove Corp Sdn Bhd, one of the pioneer manufacturers of nitrile medical gloves, says the government should review current tax incentives to protect their intellectual property (IP) rights.
“We urge the government to consider tax incentives for manufacturers to register patents because the process to protect IP rights can be time consuming and costly,” said Smart Glove executive chairman Foo Khon Pu.
“I believe this is one of the key reasons why a lot of research and innovation is not commercialised. There is no specific tax incentive in Malaysia for registering IP protection on a worldwide basis,” he said.
“There is also no government funding for commercialisation of research in pilot testings and clinical trials,” he told NSTP business in an interview recently.
Foo said at the moment the pioneer status for manufacturers is only for promoted products.
“It doesn’t incentivise manufacturers to invest in a new product if it is not classified as a promoted product. Currently, nitrile gloves are not considered as promoted products,” he said.
“It is a long and winding process to bring an idea to the drawing board and eventually commercialise it. It’s costly because experimentation involves heavy upfront investments,” he said.
“When glove manufacturers develop products such as gloves, specifically for chemotherapy sessions and anti-microbial gloves, they are not accorded tax incentives unless accepted as promoted products,” said Foo.
Smart Glove’s production capacity is at five billion pieces of nitrile medical gloves per year, and is set to hit 7.5 billion by next year.
“We ’re investing heavily, as much as RM150 million in autostripping and robotics packing that involves precision engineering to produce an additional 2.5 billion pieces per annum,” he said.
Foo said as the medical glove industry moves upthe value chain, manufacturers will have to “sell better and not just sell more”.
“We were able to survive against the big players because we differentiated ourselves as we produce specialty gloves.
“The premium-priced gloves are customised to clients’ needs. We have to constantly innovate to stay ahead of the competition,” he said.
In July 2007, United States firm Tillotson filed complaints, alleging that more than 200 companies were importing and selling nitrile gloves in the US that infringed on the company’s patent.
Smart Glove and US-based Henry Schein challenged Tillotson nitrile glove litigation in the US International Trade Commission (ITC) and subsequent appealed to the Court of Appeals for the Federal Circuit.
Since the dispute concerned nitrile glove exports, other glovemakers in Malaysia also participated to challenge Tillots on’s patent infringement allegation.
The administrative law judge in ITC concluded that when Tillotson amended the claims through a reissue application, filed more than two years after the grant of the original patent, it improperly enlarged the scope of the claims, rendering the patent invalid.
“Tillotson sought to overturn the decision. As the case went up to the Supreme Court, our anxiety levels went up, too. We pressed on because we had no other choice. We had come so far, we cannot turn back,” said Foo.
“It was just me, my lawyers from the US and Malaysia, slugging it out at the courts in Washington D.C. We studied the patent process thoroughly and spotted some discrepancies in Tillots on’s patent. Finally, the Supreme Court upheld ITC’s decision and justice was served,” he said.
Foo said if Smart Glove had lost its case against Tillotson, ITC would have been entitled to slap royalty fees on all nitrile medical gloves entering the US, including local sales.
“We estimated that if Tillotson had won its case, it would have had the right to collect a few hundred million US dollars from all nitrile medical glove manufacturers here.
“Manufacturers would not have been able to grow nitrile glove exports to the current RM10 billion a year,” said Foo.
This year, the Malaysian Rub ber Glove Manufacturers Association reportedly said its members, including Smart Glove, were hopeful of achieving more than 10 per cent export growth to RM18 billion, of which 60 per cent is that of the nitrile variant.

THE Malaysian Investment Development Authority states that eligibility for Pioneer Status and Investment Tax Allowance is based on high value-adding, technological usage and industrial linkages.
Pioneer Status A company granted Pioneer Status enjoys a five-year partial exemption from income tax payment. It pays tax on 30 per cent of its statutory income, with the exemption period commencing from its production day (defined as the day its production level reaches 30 per cent of its capacity).
Unabsorbed capital allowances and accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company.
Investment Tax Allowance As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance ( ITA) .
A company granted ITA is entitled to an allowance of 60 per cent on its qualifying capital expenditure (factory, plant, machinery or other equipment used for the approved project) incurred within five years from the date the first qualifying capital expenditure is incurred.
The company can offset this allowance against 70 per cent of its statutory income for each year of assessment.
Any unutilised allowance can be carried forward to subsequent years until fully utilised. The remaining 30 per cent of its statutory income will be taxed at the prevailing company tax rate. - New Straits Times

Monday, June 25, 2018

Inventor urges govt to set up special body to protect patents

The government was today urged to create a special body to protect patents against piracy.
According to an inventor, Md Nayan Salleh, 63, the measure was needed because the existing act was unable to protect inventions and innovations which can boost national economy.
“I believe it’s time for the government to protect inventors so that their inventions will not be plagiarised by those seeking profits,” he said when met here, today.
“The 1993 Patent Act is still inadequate to protect inventors when their inventions are copied by irresponsible people, making many inventors reluctant to create new inventions,” he said here today.
Md Nayan who is also the managing director of Kitaran Potensi Sdn Bhd, with 22 years’ experience in the invention field claimed he was also a victim when the Food Waste Products, Fat and Grease Filtration and Separation System (Simpak) which he patented on Jan 1, 2009 was plagiarised until he lost about RM1 million.
“The government, especially the Ministry of Finance, has to make it compulsory for any company applying for the tender to list patents registered with the Patent Act to prevent copyright infringement,” said Md Nayan who has been involved with inventions since 1996.
Md Nayan said he has now put on hold about eight new innovations including pri-Aedes (Aedes destroyer) which does not use any chemicals instead only waves to trap mosquitoes.
“The use of poison will not destroy mosquitoes and can damage the environment,” said Nayan who did not want to produce his inventions for fear they may be plagiarised.
Md Nayan achieved success when he won three international-awards, including a gold medal and two silver medals in the International Scientific Inventions Competition in Geneva, Switzerland in 1996, 1997 and 1998 and received the National Genius Award (2003), the National Innovation Award (2015) and the National level ‘Anugerah Tokoh Maulidur Rasul’ in 2009. — Bernama
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The inventors dilemma is a classic case of suggesting a solution which is somehow leaked to a competitor which then won the job.

Wednesday, June 6, 2018

Malaysia as EPO Validation State?

EPO is approaching a number of countries to be validation states of EPO. Applicants for European patent can submit a request for obtaining and extending patents in validation states. The validation system is principally similar as designation system for contracting states of EPO.

Currently, there are four validation states namely Morocco, Moldova, Tunisia and Cambodia. MyIPO confirmed that EPO has proposed Malaysia as EPO validation state.

European patents are principally prosecuted by qualified European patent attorneys. Accepted European patent are extended to validation states by paying validation fees. The validation system can ease patent backlog faced by MyIPO.

I am of the view that the validation state system can be considered if it is tweaked to be a form of reciprocal cooperation arrangement.

I would appreciate if EPO allows Malaysians to qualify as European Patent Attorney and practice before the EPO. If European patent applicants and attorneys have direct access to Malaysia patent through validation system, EPO should provide the same access to Malaysian applicants and representatives. We can leverage on mutual cooperation to enhance local patent expertise and European market access.

Wednesday, May 30, 2018

With recipes, the key to making millions is not about the food

In 2017, the team from Sir Kensington’s made an estimated US$140 million (RM558 million) for their ketchup recipe when they sold it to Unilever.
The same year, Nathan Myhrvold, a technology expert-turned-experimental chef, released the five-volume Modernist Bread (Cooking Lab, US$560), co-authored by Francisco Migoya. It’s Myhrvold’s latest juggernaut; he co-authored the best-selling Modernist Cuisine: The Art and Science of Cooking (Cooking Lab, US$625) in 2011. Before that, he was the chief technology officer at Microsoft.
That was a good year for big-ticket food projects. But it came when recipes are being continually devalued as they flood the internet, free of charge. Social media has made it ever easier for people to copy the dishes of others. It makes me wonder: How can someone monetise a recipe?
Myhrvold, who is starting work on his next opus, Modernist Pizza, has strong feelings about recipe ownership and the money it represents. If music and poetry can be copyrighted and monetised, he thinks singular recipes should be, too.
“There is certainly a comparison between recipes and computer code,” he tells me over the phone. “A recipe for a distinctive product is like code, which is protected by copyright.”
There’s one problem: In the US, most recipes aren’t legally protected by copyright. That’s because they essentially contain only ingredient names and proportions.
“Copyright law does not protect merely utilitarian articles, ideas, facts, or formulas. Since food is a useful article, copyright law will apply only if the food incorporates highly creative features that are separable (either physically or conceptually) from the food’s utilitarian features,” says Natasha Reed, copyright expert at New York’s Foley Hoag LLP law firm, at Fine Dining Lovers.
Abroad, it’s generally not much different: “Such an instruction is neither original nor individual and does not qualify as a work of art,” explains Martin Berger of the Swedish Patent and Registration Office.
So is there a case for the monetising of recipes? Myhrvold draws analogies from his former technology job — and decries the blatant plagiarising of dishes.
Recipes as computer code
Myhrvold tells the story of putting fonts into the Windows programme when he was at Microsoft decades ago.
“There are thousands of different font designs. They are a collection of numbers that plot the design. According to a court ruling, they’re not protected, though the font names are,” says Myhrvold. “The coordinates of the points, which you’d put into a computer programme like proportions in a recipe, are not protected. It’s messed up, but it’s the law.” 
Similarly, consider the Cronut. The technique and recipe for frying up a donut with croissant-like layers aren’t protected, but pastry chef Dominique Ansel did trademark the name and has aggressively pursued knockoffs. Pepperidge Farm took Trader Joe’s to court over alleged infringement of its Milano cookies. And Magnolia Bakery, famous for its cupcakes, was able to trademark the jaunty swirl of its frosting.
Trademarks, though, are about protecting a brand, not actively bringing in money (unless you consider litigation and damages an active revenue source). Myhrvold points to patents as a potential way to monetise a recipe — although, for most chefs, that’s impractical. Patenting a recipe costs thousands of dollars, and it must qualify as unique and useful. For example, tofu has a lot of patents because the process of coagulating it is unusual. There are also many yogurt patents. “If you’re Chobani, you want to protect your formulations,” he says. 
“If I say, ‘I’m going to patent my carrot cake recipe, and it’s special because I add mace and red pepper’, it’s unlikely to get that patent,” says Myhrvold. “It’s in the realm of what cooks do. But a novel chemical compound that no one’s used before, or in this way — you could get a patent.”
In other words, chefs are powerless when it comes to protecting their creations, says Myhrvold.
He points to a case a dozen years back, when an Australian cook worked around the world in top kitchens. He then opened a restaurant in Melbourne, where he served exact replicas of such dishes as Wylie Dufresne’s “shrimp noodles”. The food world erupted, but there was no legal recourse: The dishes weren’t copyrighted.
As Exhibit A for what happens when you can’t copyright recipes, Myhrvold cites Jean-Georges Vongerichten’s legendary molten chocolate cake, first made in 1986 by accident and now served around the world. (While making individual chocolate cakes for a party of 500, Vongerichten neglected to check the oven settings. He thought the mistake had ruined his restaurant; instead he got a standing ovation.)
“Jean-Georges’s recipe dominated because it redefined chocolate cakes, and all you have to do is under-bake it. If he had [been able to copyright] that recipe, and got a nickel for every 100 of those served, he would own all the buildings where his restaurants are,” says Myhrvold.
Multimillion-dollar recipes
The key to raking in millions on a recipe, I come to realise, is that it’s invariably not about the recipe.
“From the beginning, we password-protected our original recipes in text files,” says Sir Kensington’s Scott Norton, who started making ketchup with Mark Ramadan as a college project. “We absolutely saw them as our own, original work.”
Still, he admits, “Had we not started the company and proved the value in them, no one would have come along, looked at the recipes alone, and seen them as anything of tremendous value without traction in the market. Sir Kensington’s team and reputation has brought us to where we are far more than our ever-evolving recipes have.”
Take Singapore’s US$3-a-plate chicken-and-rice dish that has been valued at US$2 million. Liao Fan Hong Kong Soya Sauce Chicken Rice & Noodle has a Michelin star, but the true value of its renowned recipe is more than what’s in hawker Chan Hon Meng’s head.
“A street hawker recipe is dependent on the reputation it comes with, not just the sauce and techniques,” says KF Seetoh, an Asian-food tour expert who has taken Anthony Bourdain through Singapore’s markets. “Although many look simple, there are many little touches an iconic hawker puts in their dishes that more than meets the eye. It’s techniques, not just recipes, like mass production methodology in a tiny kitchen.”
Seetoh estimates that hawkers recipes can command from US$250,000 to many millions, provided they can carry the popular lustre to whomever might buy it. The most expensive hawker recipe known today in Singapore is Kay Lee Roast Meats, whose honey pork and roast duck recipes sold for more than US$5 million. “A few hundred portions a day at a humble US$4 to US$6 price, in a low-rent space with minimum manpower, is very sexy for investors,” Seetoh says. — Bloomberg

Saturday, April 7, 2018

Solar Panels: Technological Innovation Prompts Profound Shifts

Technological innovation – as the main form of intangible capital – is prompting profound shifts in the global manufacturing value chain for photovoltaic (PV) solar panels, which are increasingly found worldwide.

Solar panels have moved from highly specialized products to low-cost commodities, putting pressure on producers. Between 2008 and 2015 prices fell by an estimated 80 percent. In particular, companies have reduced production costs by investing in more powerful production equipment, realizing efficiencies through complementary process innovations and achieving large scale production.

Chinese manufacturers have progressively increased their market share, putting many traditional PV manufacturers in the U.S., Europe and elsewhere, as well as some firms within China, under competitive pressure, resulting in bankruptcies and acquisitions.

The WIPR 2017 shows that overall patent filings in the photovoltaic sector have declined since 2011.  In the U.S., Europe and Japan – the traditional sources of innovation in the sector – the decline has been sharp, due to the exit of many firms. However, the surviving firms in these areas have stepped up their investments in research and development (R&D) to develop new PV technologies.

In China, patenting has continued to grow in the sector, including from new firms that have entered the sector. Yet, the proportion of Chinese solar panel patent applications filed in other countries remains below 2 percent.

Many companies are seeking growth in local service markets – such as the installation of solar panels in private homes. In such consumer markets, company and product branding are key intangible assets that help attract consumers and project finance.

Coffee: New Consumer Preferences Driving Value

Technology plays a key role in the transformation of a coffee bean into a cup of brew. The WIPR 2017 maps patent data in the sector, finding that innovation across the supply chain increases in activities closer to consumers. This includes the processing of beans and the final distribution of coffee products, such as the coffee capsules found in many homes and offices.

Brand reputation and image allow firms to differentiate their offering from those of their rivals and play an important role in all coffee market segments, including soluble and roasted coffee sold in grocery stores, as well as espresso-based coffee products sold in retail coffeehouses.

Shifting consumer preferences have progressively transformed the global coffee value chain, moving from consumption in the home, then in coffeehouses and now to a new generation of discerning consumers who are interested in their coffee product’s back story, willing to pay premium prices.
Prices commanded in this so-called “third wave” market segment can exceed those in “first wave” consumption by more than four times, with coffee farmers’ incomes tripling. While still small in size, this fast-growing market segment offers new opportunities for greater participation in the global value chain by developing economies. In particular, information on the origin and variety of the coffee beans, how they were farmed and processed, and farmers’ compensation become integral to selling coffee.

Responding to the shifting consumer preferences, coffee growers and even countries are investing in efforts to move beyond generic coffee, adopting their own branding strategies.

Smartphones: Substantial Returns Driven by Intangible Capital


Apple and Samsung dominate the market for high-end phones that cost more than USD 400, with market shares of 57 percent and 25 percent, respectively. In this segment, crucial intangible assets include technology, the design of hardware and software, and branding. The WIPR 2017 finds that for every iPhone 7 that Apple sells for approximately USD 810, about 42 percent of the sales price is captured by Apple – a proxy for the high returns from intangible capital in the industry. Huawei and Samsung also capture significant value in their top-end smartphone models, despite their lower consumer prices and sales volume.

The WIPR 2017 also finds that component makers - like Corning Inc., the producer of iPhone Gorilla Glass – and technology providers including Nokia Corp. and Qualcomm Inc., use intangible assets to capture substantial value.

Smartphone firms and technology providers rely heavily on patents, trademarks and industrial designs, generating a high return on their intangible capital. Indeed, in the domain of patents, up to 35 percent of all first filings worldwide may relate to smartphones. The report finds that the 4th-generation (4G) cellular standard used today is associated with close to four times more patents than the 2nd-generation standard.

Another particularly fast growing area of filing activity concerns graphical user interfaces (GUIs), such as icons for mobile apps. For example, Apple filed 222 designs on GUIs at the European Union Intellectual Property Office between 2009 and 2014, while Samsung filed 379.

30% Value of Manufactured Goods comes from Intellectual Capital

According to World Intellectual Property Report 2017, 30% value of manufactured products sold around the world comes from intellectual capital, such as branding, design and technology.

An amount of USD 5.9 trillion in 2014, shows that intangible capital contributes twice as much as buildings, machinery and other forms of tangible capital to the total value of manufactured goods.

"Intangible capital will increasingly determine the fate and fortune of firms in today’s global value chains. It is behind the look, feel, functionality and general appeal of the products we buy and it determines success in the marketplace," said WIPO Director General Francis Gurry. "Intellectual property, in turn, is the means by which companies secure the competitive advantage flowing from their intangible capital."

Three product groups - food products, motor vehicles and textiles, account for close to 50% of total income generated by intangible capital in the manufacturing global value chains.

Thursday, February 22, 2018

CPTPP as of 21 Feb 2018

The legally verified text of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was released on 21 Feb 2018 by New Zealand government (https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/cptpp/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-text/)

According to Chapter 18 Intellectual Property of the agreement:
- introduction of sound marks
- patent term adjustment (to compensate the patent owner) for unreasonable curtailment (of pharmaceutical product as a result of marketing approval process)
- biologics (protection of data)
- watch system for pharmaceutical patent owner
- copyright term adjustment to life of author plus 70 years after death or 70 years (certain works)
- border measures to suspend suspected counterfeit goods
- Malaysia must accede  Madrid Protocol, Budapest Treaty, Singapore Treaty, and UPOV