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TECHNOLOGY ENTREPRENEURSHIP

(ENT600)

UNIT 7
INTELLECTUAL PROPERTY

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Introduction

Any product of human intellect and


creative endeavor such as innovation,
design, trading style, artistic work or
literary work has value in the marketplace
The term intellectual is used to portray
the involvement of human imagination,
creativity, and inventiveness
Entrepreneurship Dept, FBM
(2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Introduction (cont.)

The intellectual creations and its inherent


value can be protected from being
exploited by other parties through
intellectual property protection
The concept of intellectual property means
that any unauthorized use of the creation
or works by unauthorized parties is
prohibited and protected by law
Entrepreneurship Dept, FBM
(2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Definition of Intellectual Property

Intellectual property (IP) is defined as a


legal entitlement attached to the
expressed form of an idea, or to some
other intangible subject matter, that
enables its holder to exercise
exclusive control over the use of the IP

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Types of Intellectual Property (IP)

There are five types of IP rights which


provide protection for inventions or
creations against infringement by others
1. Patent
2. Copyright
3. Trademark
4. Industrial design
5. Trade secret

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Types of Invention Protection

In Malaysia , technological inventions are


protected under the Patents Act 1983.
The Act covers two key forms of
protection:
1. Patent
2. Utility innovation

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ENT600/UNIT 7 : INTELLECTUAL PROPERTY

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 some
things or offers a new technical solution to a
problem
According to Patents Act 1983, a patent is an
intellectual property right granted to an
inventor giving him or her the exclusive right
to make, use, or sell an invention for a
limited time of period (20 years)
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Utility Innovation
Utility innovation is an exclusive right granted
for a minor invention which does not require to
satisfy the test of inventiveness as required of a
patent
Utility innovation provides intellectual property
right for those incremental and lower level
inventions that would not be sufficiently
inventive to qualify for a standard patent. This is
due to the inventive threshold being lowered
compared to a standard patent, that is, the utility
innovation requires an innovative action rather
than an inventive action
Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Why Protect an invention?


A patent or utility innovation protection gives the
owner of the patent/utility innovation the
exclusive
right
to
stop
others
from
manufacturing, using and/or selling the owners
invention in Malaysia without the owners
consent or permission
A patent owner has the right to use the patented
invention, or may license to other parties to use
the invention, or sell the right of the invention to
someone else who will then become the new
owner of the patent
Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 7 : INTELLECTUAL PROPERTY

Who Can Apply for a Patent?


Any person may make an application for a
patent or for a utility innovation either alone
or jointly with another person. The word
"person is not limited to natural persons
and thus also includes, for example, a
company

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Patentable Inventions
For an invention to be patented, it must satisfy the following criteria:
Functional/Technical
the invention must relate to how something works, what it does,
what it is made of, or how it is made
New
the invention has not been publicly disclosed in any form,
anywhere in the world
Involve an inventive action
the invention that could not be figured out by a person with
average knowledge of the technical field
Industrially applicable
the invention must be capable of being made or used in an
industry (it can be mass produced)

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Non-Patentable Inventions
Discoveries, scientific theories and mathematical methods
A literary, dramatic, musical or artistic work

Plant or animal varieties or essentially biological processes for the


production of plants or animals, other than man-made living microorganisms, micro-biological processes and the products of such
micro-organism processes
Schemes, rules or methods for doing business, performing purely
mental acts or playing games

The presentation of information, or some computer programs


Methods for the treatment of human or animal body by surgery or
therapy, and diagnostic methods practiced on the human or animal
body.
Anything immoral or contrary to public policy
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Pursuing a patent
Patent expert recommends the following basic guideline:
1.Pursue patents that are broad,
significant, and offer a strong position

or

commercially

The patent must be significantly novel or proprietary.

Record and have them witnessed so


documentation secures a proprietary position.

that

2.Prepare patent plan in detail

Plan should outline the cost to develop and market


the innovation.

Analyze competition and technological similarities to


the idea.

Detail out the perceived value of the innovation.

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Pursuing a patent (cont.)


3.

4.

5.

Have your actions relate to your original patent plan

Stick to the original patent plan during the early stages of


establishing the patent

At a later stage, the plan may change e.g. licensing the


patent vs keeping the patent
Establish an infringement budget

Infringer may fear legal damages

Thus prepare realistic budget for prosecuting violation of


the patent.
Evaluate the patent strategically

Patent process typically take 3 years

Compare this with the lifecycle of the proposed innovation


or technology.

Will the patent be worth defending in three years or will


enforcement cost more than the damages collected.

Entrepreneurship Dept, FBM (2009)

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Term of Protection for Patents


A patent is protected 20 years from the date of filing
A Utility innovation is protected 10 years from the date of
filing. The term may be extended twice,each on a 5 year
basis (i.e. 10 + 5 + 5), subject to use, therefore providing a
total protection period of 20 years

Once a patent expires, the owner no longer holds the


exclusive rights to the invention

Entrepreneurship Dept, FBM (2009)

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Where to apply?

An applicant must file a patent or utility innovation application with the


Intellectual Property Corporation of Malaysia (in Kuala Lumpur or at the
branch offices located in Sabah and Sarawak) which will assess whether it
meets the requirements of the Patents Act 1983.
The total cost for patent application is RM 1050 and for utility innovation is
RM 900 (as stated in http://www.mipc.gov.my/index.php/faq/patent.html as at
June 2009 )
Applications, correspondence and enquiries should be directed to:
The Registrar
The Patent Registration Office
Intellectual Property Corporation of Malaysia
32nd Floor, Menara Dayabumi
Jalan Sultan Hishamuddin
50623 Kuala Lumpur
Tel : 603-2263 2100
Fax : 603-2274 1332

Entrepreneurship Dept, FBM (2009)

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International IP protection
Exporting firms still face problems of
imitations and counterfeit products
The solution to this is internationalizing the
patent law to protect firms operating in the
global market.
To facilitate patent filing in multiple countries
with a single office rather than filing in each
separate country, the Patent Cooperation
treaty (PCT) with over 100 participating
countries was established

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International IP protection

The World Intellectual Property Organization


(WIPO) in Geneva is administering this facility.
This arrangement helps to reduce the cost of
multiple patent applications by firms operating
in the global markets.
This will indirectly contribute to the economy
of the nation because it helps to curtail
imitation and counterfeit products.

Entrepreneurship Dept, FBM (2009)

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Copyright

Copyright is a form of intellectual


property protection or exclusive right
given to individuals who produce
original works of art and literature,
music,
films,
sound
recording,
broadcasts, derivative works and
computer programs

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Copyright in Malaysia
Copyright protection in Malaysia is governed by the
Copyright Act 1987
A work is protected automatically upon fulfillment of the
following conditions:1. Sufficient effort has been spent to make the work
original in character

2. The work has been written down, recorded or


reduced to a material form
3. The author is a qualified person or the work is made
in Malaysia or the work is first published in Malaysia
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What can copyright protect?


1.

2.

3.
4.

5.
6.
7.
8.

Literary works (e.g. novels, instruction manuals,


computer programs, song lyrics, newspaper articles and
some types of database)
Dramatic works (e.g. theatre presentation and stage
plays )
Musical works (e.g. composition)
Artistic works (e.g. paintings, engravings,
photographs, sculptures, collages, architecture, technical
drawings, diagrams, maps and logos)
Layouts or typographical arrangements (e.g. used to
publish a work for a book)
Recordings (e.g. jingles, sounds and films)
Broadcasts (e.g. documentary, live coverage of events)
Derivative works (e.g. producing Harry Potter movie
series from the novel of the same name)

Entrepreneurship Dept, FBM (2009)

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Ownership of copyright
Literary works(including software and databases), theatrical,
musical or artistic (including photographic)
The author or creator of the work is also the first owner of any
copyright in it. In some situations two or more people may be joint
authors and joint owners of copyright
Film
The principal director and the film producer are joint authors and first
owners of the copyright (and the economic rights)
Sound recording
The author and first owner of copyright is the record producer, in the
case of a broadcast, the broadcaster; and in the case of a published
edition, the publisher
If a work is made by an employee (in the course of his or her
employment, unless there is any contrary agreement), the copyright in
the work shall be deemed to the person who commissioned the work
or the employer
Entrepreneurship Dept, FBM (2009)

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Term of Protection for Copyrights


Generally, copyright subsist during the life of the
author plus 50 years after his death
However, if a work has not been published during the
lifetime of the author, copyright in the work continues
to subsist until the expiration of 50 years, following
the year in which the work was first published
In the case of a work with joint authorship, the life of
the author who dies last is used for the purpose of
calculating the copyright duration of the work

Entrepreneurship Dept, FBM (2009)

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Legal Rights of Copyright Owners


Generally, owners of copyright works have the exclusive rights to
control:
the reproduction of the works in any form (including
photocopying, recording etc)
the performing, showing or playing to the public
the communication to the public
the distribution of copies to the public by sale or other transfer of
ownership
the commercial rental to the public.
These exclusive rights apply irrespective of whether the works
are copied partly or wholly
Entrepreneurship Dept, FBM (2009)

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What Constitutes Copyright Infringement?


A copyright is infringed when an UNAUTHORIZED person
performs any of the following acts: reproduces in any material form, performs, exhibits, shows or
plays or distributes to the public
communicates by cable or broadcast of the whole infringing
work or a substantial part of its original or derivative form
makes for sale or hire any infringing copy
sells, lets for hire or by way of trade, exposes or offers for sale
or hire any infringing copy
possesses, otherwise than for his private and domestic
use, any infringing copy
imports into Malaysia, otherwise than for his private and
domestic use, an infringing copy
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Trademark
Trademark is a distinctive name, mark, symbol or motto
identified with a companys product(s)
A trademark is a sign which distinguishes the goods and
services of one trader from those of another
A sign includes words, pictures, logos, names, letters,
numbers or a combination of these
A trademark is used as a marketing tool to enable
customers recognize the product of a particular trader

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Functions of Trademark

Origin Function A trademark helps to identify


the source and those responsible for the
products and services sold in the market.
Choice Function A trademark enables
consumers to choose goods and services with
ease while shopping.
Quality Function Consumers choose a
particular trademarks for its known quality

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Functions of Trademark (cont.)

Marketing Function Trademark plays


important roles in marketing. It is normal for
consumers to make purchases based on
continuous influence of advertising.
Economic Function Established trademark is
a valuable asset. Trademarks may be licensed
or franchised

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Importance of Trademark
Registration
Trademarks provide :
Exclusive Rights - Registered trademark owners are conferred
exclusive right to use their marks in trade. They also have the right
to take legal action for infringement under the Trademarks Act 1976
against others who use their marks without consent. They can also
lodge complaints to the Enforcement Division of Ministry of
Domestic Trade, Cooperative and Consumerism (MDTCC) for
appropriate actions under the Trade Description Act 1972.
Legal Evidence - Registration certificate issued by the Registrar of
Trademarks under the Ministry of Domestic Trade Cooperative and
Consumerism (MDTCC) of is a prima facie evidence of trademark
ownership. A certificate of registration serves as an important
document to establish the ownership of goods exported to other
countries.
Entrepreneurship Dept, FBM (2009)

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Law Governing Trademarks


In Malaysia, a trademark is governed by:

1.Trademarks Act 1976


2.Trademarks Regulation 1997 (Amendment
2001)

Entrepreneurship Dept, FBM (2009)

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Registration of Trademark in Malaysia


Registration of trademark is not compulsory
in Malaysia.
Unregistered trademark may still obtain
protection under Common Law by virtue of
used and reputation.
Thus taking action against infringer can still
be applied.

Entrepreneurship Dept, FBM (2009)

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Registration of Trademark in Malaysia (cont.)

However protection through usage is difficult


and tedious.
The unregistered trademark owner must
convince the court that the infringing act
misleads the public.
The infringing goods and services may be
mistaken from their own goods and services.

Entrepreneurship Dept, FBM (2009)

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Registrability of Trademark
Not all trademarks can be registered
For registration, trademarks for goods and services must be
distinctive and may take the following terms:
An invented word or words
Applicants signature
Words with no direct relation to goods or services,
geographical name or surname
Any distinctive sign such logos, pictures, symbols, etc.
Not deceptive, confusing, contrary to law, scandalous or
offensive
Not identical or similar to earlier registered trademarks
Not identical or similar to well-known trademark

Entrepreneurship Dept, FBM (2009)

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Registrability of Trademarks (cont.)


A trademark cannot be registered if it contains words or
representation prohibited under Trademarks Act 1976 and
Trademarks Regulation 1997 such as:
Patent, Patented, By Royal Letters Patent, Registered,
Registered Design and Copyright
His Majesty Yang Di Pertuan Agong, Her Majesty Raja
Permaisuri Agong, The Royal Highness Sultans and Their
Excellencies Yang Di Pertuan Negeri
Royal Imperial Crown, Arms, Crest, Armorial Bearings or Insignia
The Royal Army and Royal Malaysian Police
Red Crescent, Geneva Cross in red and Swiss Federal Cross in
white or silver on red ground
Words or representation or ASEAN and National Flower

Entrepreneurship Dept, FBM (2009)

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Registrability of Trademarks (cont.)

Trademarks registered in Malaysia are not


protected abroad
If protection of trademarks is required overseas,
it is necessary to apply for registration abroad
separately

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Registration Process
Every application will be examined to ensure
registrability.
If there are any objections to registration of a particular
trademark, the applicant may apply for hearing.
Trademarks accepted will be advertised in the
government gazette.
If no opposition the trademarks will be registered
Registration Certificate will be issued.
Application Fee:
Application fee : RM 250.00
Advertisement in Government Gazette and Issuance
of Certificate RM 450.00
Entrepreneurship Dept, FBM (2009)

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Term of Protection for Trademarks

Valid for 10 years from the date of


application and may be renewed every 10
years.

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Industrial Design
An industrial design is the ornamental or
aesthetic aspect of an article
The design may consist of three-dimensional
features such as the shape and configuration of
an article, or two-dimensional features, such as
pattern and ornamentation
The design features must be applied to an article
by any industrial process or means of which the
features in the finished article appeal to eye

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Ownership Rights

A registered industrial design provides an


exclusive right to make, import or sell or hire out
any article to which the design has been applied
The owner of a registered design has the right to
take legal action against an infringer within 5
years from the act of infringement

Entrepreneurship Dept, FBM (2009)

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What is a registrable industrial design?

An industrial design must be new at the date of


application
A design is considered as new only if it has not
been made available or disclosed to the public in
any way whatsoever in Malaysia before the filing
date

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What sort of designs is excluded from registration?


An industrial design is not registrable if:

It does not have a clear aesthetic appearance.


It is a method or principle of construction.
Designs features dictated solely by function.
Integral parts which consist of features that dependent
upon the appearance of another article.
Differs only in immaterial details or in features commonly
used in the relevant trade (trade variants).
The designs those are contrary to public order or
morality.

Entrepreneurship Dept, FBM (2009)

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Filing of Industrial Designs

As claims are based on a "first-to-file" rule


basis, filing of an industrial design should be
made at the earliest possible time or before
an article is disclosed to the public
Prior disclosure will destroy the novelty of
the design. Therefore, extreme care should
be exercised to ensure secrecy of the design

Entrepreneurship Dept, FBM (2009)

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Term of Protection for Industrial Design

A registered industrial design is given an initial


protection period of 5 years from the date of
filing and is extendable for a further two
consecutive terms of 5 years each
The maximum protection period is 15 years

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How extensive is industrial design protection?

An industrial design registered in Malaysia is


only protected in Malaysia
In order to have your designs protected in other
countries, applications for registration will have
to be filed within six (6) month from the earliest
date when it was first filed in any of the Paris
Convention member countries

Entrepreneurship Dept, FBM (2009)

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Who can apply for design registration?


Only the owner of a design may apply to register the
design, though an agent can be authorized to make
application

Where an applicant's ordinary residence or principal


place of business is outside Malaysia, the applicant shall
appoint an agent registered in the Register of Industrial
Designs Agent

All application for the registration of industrial design


must be lodge at the Industrial Designs Registry,
Intellectual
Property
Corporation
of
Malaysia

Entrepreneurship Dept, FBM (2009)

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Trade Secrets
Information that is critical to the business success but
does not qualify for patent, trademark, copyright, or
industrial design protection

Confidential information that the business needs to keep


it secret to help maintain its competitive advantage
Any formula, pattern, physical device, idea, process or
other information that provides the owner of the
information with a competitive advantage in the
marketplace

Entrepreneurship Dept, FBM (2009)

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Characteristics of information
that can be classified as trade secrets
Not known outside the company
Known only inside the company on a
basis
Safeguarded by stringent efforts to keep
confidential
Valuable and provides the company
competitive advantage
Developed at great cost, time and effort
Cannot be easily duplicated, reverse
discovered
Can last longer that the term of a patent
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need-to-know
the information
a compelling

engineered or

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How to Protect Trade Secrets


Physical Methods
Restricting access (access to confidential documents
restricted to certain key personnel)
Labeling documents (confidential documents are stamped
Private & Confidential, Restricted.)
Password protection (for confidential computer files)
Logbooks for visitors and access to confidential materials
Adequate overall security measures (alarm, security
personnel)
Written Confidentiality Agreement
a
firm
asks
employees
to
sign
a
confidentiality/nondisclosure agreement. If they then tell
anyone about it, this is a breach of confidence and you can
take legal action against them
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References
http://www.mipc.gov.my/ retrieved on June 26, 2009.
http://www.wipo.int/portal/index.html.en retrieved on
June 26, 2009.
http://www.ipo.gov.uk/ retrieved on June 26, 2009.
http://www.ipaustralia.gov.au/index.html retrieved on
June 26, 2009.
B.R. Barringer, R.D. Ireland, Entrepreneurship:
Successfully Launching New Ventures (Upper Saddle
River, New Jersey: Pearson Education, 2008)

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