SMEs are powerhouses of ideas and innovations. Yet few have taken the extra step to protect their creations. IP (intellectual property) rights give a person ownership to any creation of their mind – literary or artworks, design, invention, symbols or names – and allow them to reproduce, sell, perform, display or license it. In Malaysia, IP rights are governed by various acts, including the Trademark Act 2019, the Patent Act 1983 and the Copyright Act 1987, supervised by the Intellectual Property Corporation of Malaysia (MyIPO).
Without adequate IP protection, a company’s creation is vulnerable to being copied or used by competitors. At the same time, the company loses out on the profitable opportunities that the IP system can open up.
This is a situation that Adastra is poised to help address. Established in 2014, Adastra is a firm specialising in IP rights, with an emphasis in Malaysia, India, Singapore, and Indonesia. Its managing director Mohan K tells Asia Connects what IPs mean for business longevity and how trademarks and patents can minimise losses and open up new revenue streams.
Asia Connects: What are the common blind spots that SMEs have when it comes to IP protection, and what are the consequences?
Mohan: IP is often sidelined in the early days of a business as it seems less critical or essential than other operational matters. There is also a common misconception that IP protection is an expensive endeavour. If IP protection efforts are undertaken at the start of a business, there would not be a high upfront cost.
IP protection may even save costs and reduce complications in the case of an infringement. An example is our client’s experience – the case involves a product with a patented formulation and trademarked brand name. He discovered on an e-commerce platform that an online merchant had been selling an imported product that has similar product features as his. Through the proof of IP registration, he successfully demanded that the e-commerce platform take down the seller’s products.
AC: Is it sufficient for a business entity to register a company name with the Companies Commission of Malaysia (SSM) to ensure no one else can use or misuse it?
Mohan: Unfortunately, it is a myth that just having a company name incorporated with SSM entitles a company owner to the exclusive use of the name. This is not correct. SSM only ensures that no similar company names were already registered to avoid a case of mistaken identities.
On top of that, the government is increasingly placing more importance on IP. For example, a business needs a valid trademark registration when applying for a signboard. E-commerce platforms like Lazada and Shopee require merchants to furnish proof of trademarks and patent certificates before selling the products on these platforms.
AC: Do IPs also open up opportunities to contribute to a business’s long-term growth?
Mohan: Once you have protected your IP – such as a trademark, design, technology or system and method – you can license the brand or technology or know-how to other parties, whether it is in Malaysia or other territories. It means earning additional income as these third parties would pay you royalty payments or license fees to use your IP. Similar to businesses built on a franchise model, this allows you to monetise the IP with less work and investment. Licensing your IP rights to third parties is also one way to expand the reach of your business without overstretching capital and resources.
Trademarks and patents also help deter potential competitors or at least create a high entry barrier for them to dilute your market share, which would help with your business longevity.
AC: How does Adastra help businesses to start protecting their creations?
Mohan: We guide companies to identify what constitutes IP assets in their business and how to protect them – not just in Malaysia but in other countries when they want to expand overseas. These companies factor IP into their decision-making when determining business models, distribution and sales channels, and production processes. We assist them in controlling the costs of IP filings, where to apply, maximising the coverage within their budget, and so on.
