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16/03/2010

INTRODUCTION TO
INTELLECTUAL PROPERTY
JAMALUDIN ABU BAKAR
SENIOR MANAGER
MARDITECH CORPORATION SDN BHD

© JAMALUDIN ABU BAKAR (2010)

OBJECTIVES
 To present the overall picture of IP in
comparative manner and in relation to the
governing statutes
 To share the experience in technology
commercialization

© JAMALUDIN ABU BAKAR (2010)

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OUTLINE
 PART 1: IP
 What is IP
 IP international regimes
 IP local regimes

 PART 2: COMMERCIALIZATION
 Mode of commercialization
 Case Study

© JAMALUDIN ABU BAKAR (2010)

PART 1: INTELLECTUAL
PROPERTY
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 What is Intellectual Property?

 IPR – Intellectual Property Rights


 IP Protection
 IP exploitation
 IP commercialization

© JAMALUDIN ABU BAKAR (2010)

 Are there IPs in these examples?


 What type of IPs?

2. 3.
1.

4. 5.

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DEFINITION OF IP
 Black’s Law Dictionary: “A commercially valuable product
of the human intellect, in a concrete or abstract form”.
 Colston, C in Principles of IP Law: “IP is the results of
human creativity” – new ideas applied to as many ways - as
human man can conceive – embodied in familiar things
(books, designs etc).
 WIPO: “The term intellectual property refers broadly to the
creations of the human mind. Intellectual property rights
protect the interests of creators by giving them property
rights over their creations.
 TRIPS Agreement: IP refers “to rights in creations of the
human mind which arise under the laws of patents,
copyrights, trademarks, trade secrets, unfair competition
and related laws.”
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According to WIPO:
 Intellectual property relates to items of
information or knowledge, which can be
incorporated in tangible objects at the same time
in an unlimited number of copies at different
locations anywhere in the world.
 The property is not in those copies but in the
information or knowledge reflected in them.
 Intellectual property rights are also
characterized by certain limitations, such as
limited duration in the case of copyright and
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patents.
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 IP Rights means EXCLUSIVITY & MONOPOLY


 relates to exclusive & monopolistic rights given to the
owner or rights’ holder by the government (the law)
and exclude others from doing the same

 IP documents are public domain except for


Confidential Information/ Trade secret

 However, IP Rights are territorial, except for


Copyright & Confidential Information/ Trade
Secret
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© JAMALUDIN ABU BAKAR (2010)

TYPES OF INTELLECTUAL PROPERTY

1.
PATENT
8. S
2.
TRADE
TRADE
SECRET
MARKS
S

7. NEW
3.
PLANT
VARIETI
ES
IP COPYRIG
HTS

6.
GEOGRAPHI 4.
CAL INDUSTR
INDICATION IAL
S 5. DESIGNS
INTEGRA 10
TED
CIRCUIT
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REGULATORY FRAMEWORK
International level:

Ips International
conventions
1 Patent Paris Convention &
2 Industrial TRIPs Agreement
Design (Trade Related
3 Integrated Aspects of
Circuit Intellectual
4 Trade Marks Properties)
5 Copyright Berne’s Convention 11

© JAMALUDIN ABU BAKAR (2010)

REGULATORY FRAMEWORK
National level:
IP Statutes
1 Patent Patent Act 1983
2 Industrial Designs Industrial Design Act 1996
3 Integrated Circuit Integrated Circuit Act 2000
4 Trade Marks Trade Marks Act 1986;
Passing-off; Trade Description
Act 1972
5 Copyright Copyright Act 1987
6 Geographical Geographical Indications Act
Indications 2000
7 New plant varieties New Plant Varieties Act 2004
8 Trade secret Common law 12

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SUBJECT MATTER OF PROTECTION


IP Subject matter
1 Patent An idea of an inventor which permits in practice
the solution to specific problems in the field of
technology; may relate to process or product or
both
2 Industrial Designs Features of shape, configuration, pattern &
ornament that appeal to the eye
3 Integrated Circuit 3-dimensional disposition of an integrated circuit
4 Trade Marks Device, brand, heading, label, ticket, name,
signature, word, letter, numeral, or any
combination
5 Copyright Literary , musical & artistic works; films; sound
recordings; broadcast– irrespective of quality
6 Geographical An indication which identifies goods in a
Indications territory whereby the quality or characteristics
attributable to place of origin
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7 New plant varieties
8 Trade secret Confidential information, trade secrets
© JAMALUDIN ABU BAKAR (2010)

CONDITIONS OF REGISTRATION/ PROTECTION

IP Conditions
1 Patent i. New/ novel to the world; ii. involves inventive
steps; iii. industrial application; if does not involve
inventive steps: utility innovations/ petty patent

2 Industrial New in Malaysia


Designs
3 Integrated Original, even if it is identical to others; fixed on
Circuit material form or incorporated into integrated circuit
4 Trade Marks ‘New’ in Malaysia, not identical or similar to well-
known marks
5 Copyright Original to the world; reduced to material form; no
registration
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DURATION OF PROTECTION
IP YEARS
1 Patent 20 , from date of filing
2 Industrial Designs 5+5+5
3 Integrated Circuit 10 years
4 Trade Marks 10 years, renewable (almost forever)
5 Copyright (a) Content of literary, musical & artistic
works: author’s life + 50;
(b) Published works: 50
(c) Sound recordings, broadcast, films; works
of government: 50
6 Geographical 10 years from date of filing, renewable
Indications
7 New plant 25 years from date of filing for registration; 15
varieties years fro traditional and farmers’ varieties
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8 Trade secret Forever if it remains as trade secret
© JAMALUDIN ABU BAKAR (2010)

PATENTS
 Nationally governed by Patents Act 1983
 At international level by TRIPs (Trade Related

 Relates to INVENTION

 Definition of INVENTION (s12)


 (1) means an idea of an inventor which permits in
practice the solution to a specific problem in the field
of technology
 (2) may be relate to a product or process [or both]

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 Patentable inventions (s 11):


 An invention is patentable if
 It is new,
 Involves an inventive step and
 Is industrially applicable

 New means novel to the world, not anticipated by


prior arts (s14)

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© JAMALUDIN ABU BAKAR (2010)

 Non-patentable invention (s13)


 Discoveries, scientific theories and mathematical
methods;
 Plant or animal varieties…………………… other than
man-made living micro-organisms, micro-biological
processes and the products of such micro-organism
processes;
 Schemes, rules or method for doing business,
performing purely mental acts or playing games;

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 Grace period/ priority period

FILING DATE

GRACE PERIOD PRIORITY PERIOD

12 MONTHS 12 MONTHS
WHERE PUBLIC FILING TO OTHER
DISCLOSURE IS ALLOWED COUNTRIES WITH
SAME FILING DATE
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© JAMALUDIN ABU BAKAR (2010)

 PATENT
APPLICATION &
GRANTING
PRODEDURE

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PART 2:
21 TECHNOLOGY COMMERCIALIZATION

ROUTES OF COMMERCIALIZATION
COMPLETE
4. Joint-venture
11. Publication
5.BMakings & selling with license to
use B 10. Multiple
D
non-exclusive
6. Licensing rights to make, use
TECHNOLOGY SHARING

and sell licenses


THE EXTENT OF

7. Franchising technology-based
services

1. Making & selling end 8. Value-added


products reseller
A C relationship
2. Service provider
3. Leasing equipment & 9. Exclusive
components distributorship
NONE
HIGH THE EXTENT OF CONTROL OVER LOW
TECHNOLOGY UTILIZATION

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Intellectual Capital Management: Composite View

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© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


Omega-3 Formula Designer Eggs

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© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


What is Omega-3?

A kind of Essential Fatty Acids. It is polyunsaturated

- Widely researched by scientist all over the world


since
20-30 years ago (Eskimo and Japanese)

- In 1982 Nobel Prize was awarded to three


scientists, Sune, K. Bergstrom, Bengt. I.
Samuelsson and John R Vane on the physio
mechanism of unsaturated fatty acids informing
prostagladins.
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© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


What is Omega-3?

- Found mostly in cold water fish (such as salmon, tuna, cod)


mackerel ,etc.) and some plants (walnut, flaxseed, soya bean,
green leafy vegetables etc.)

- Helps to reduce risks of heart attack, stroke, hypertension,


rheumatoid arthritis, triglyceride and some cancers

- Vital to the development of cells in our eyes and brain


especially children at the stage of development.

- Mother milk contains Omega-3 but not cow’s milk

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© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


Omega-3 Project Development

The technology commercialization partner to produce and market


their latest product - Omega 3 eggs after 5 years of research

MARDI needs A ready production facility, marketing strength and


channel of distribution.
MARDI has i) Years for research in agro-science
ii) Pool of scientists
iii) Reputable organization in agriculture sector

The technology commercialization exercise was represented by


MARDI through Marditech Corporation Sdn Bhd

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© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


LTK Omega Plus Eggs

200-400 mg Omega 3 (5 x more)

2.5-3.0 mg Vitamin E (4 x more)

20-25 mcg Selenium (2 x more)

Natural caretenoids
(No synthetic colouring in the yolk)

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© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


Characteristics of the Egg Industry

- Before 1998 there wasn’t any branded and value added eggs

- Highly fragmented, big farms such as LTK, Huat Lai, Leong Hup,
Confarm, Lay Hong, TPC does not command more than 5-6% then.
(current scenario has changed as some farms have expanded
greatly through leverage and acquisition, and one big farm ceased
operation)

- Rather saturated, but developed in terms of technology for big


farms

-Smaller farms (daily production of below 50,000 eggs) faced


modernization and successor problem.

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© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


The Commercializer
LTKM Berhad was listed on KLSE
Second Board 28th Mac 2000

Wholly owned subsidiaries,


1) LTK (Melaka) Sdn BHd
- Fully integrated layer farm at
Durian Tunggal, Malacca
- 448 acres of land
- Established in1984
- Current daily production slightly
less than 1 million eggs a day.

2) LTK Bio-Fer Sdn Bhd


Turning chicken manure into fully
fermented organic ferliser
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YE 31 Mac 05, group revenue of


RM76 million, PAT RM4.57m. © JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


Background of the Egg Industry

 Daily output - 18.8 million eggs


(est year 2004)
of which about 2.2 million is
exported to Singapore daily
 Annual market value estimate
RM1.4 billion
 Matured and very low growth
(2%-3%)
 Up to 1998,it was a total
commodity product
( no brand and price
differentiation) 31

© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


Characteristics of the Egg Industry

- Eggs are just basically a commodity. One price One product

- 1998 - Two medium size farms launched ‘low’ cholesterol eggs


caught the attention of the authorities (Ministry of Health)

- One was told to stop and the other survived with the change to ‘
Lower Cholesterol eggs’.

- LTK began to explore the possibility of added value eggs to


diversify the product range.

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© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


Business Opportunity

LTK’s Predicament

 Lack of technical know-how in nutritional


research

 Needs credibility for product claims

 Time is running out

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© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


Omega-3 Project Development

Asset available

 A farm ready for production

 Experienced management in layer hen farming

 Established marketing channels

Farm Wholesalers Retailers Consumers

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© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


Omega-3 Project Development

As a Results,

After 6 months of discussion, mutual visits and negotiation

A licensing agreement was signed on 1st August 28.

LTK Omega Plus

was launched on14 July 1999

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PROJECT SCHEDULE

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SALE OF LTK OMEGA PLUS EGGS

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ROYALTY

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CASE STUDY: OMEGA-3 EGGS


How was it Done?

LTK has to ensure that.

• Separate feed for separate flock of hens


• Omega-3 eggs are separated from the regular ones
• Omega-3 eggs are ‘stamped’ and marked separately
• Omega-3 eggs are packed separately
• Consumers know what they are paying for
• The products benefits have to be communicated to the consumers
through PR exercise promotion and advertisement.

© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


How was it Done?
•MARDI /Marditech has to ensure that

• the nutritional value in the eggs are consistent with years of


research (with special feed formulation - flaxseed added in
additional to corn, soybean and palm oil)

•LTK Omega Plus is a trustworthy / products

© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


Achieving a Win-Win Situation

• For LTK

• The first branded eggs for the company - Market leadership


• the first widely published eggs - market leadership
• it more predictable margin per egg - profitability
• attract new wholesaler/customers - market share
• maintain wholesalers’ loyalty - market share
• creating new market share - revenue

© JAMALUDIN ABU BAKAR (2010)

CASE STUDY: OMEGA-3 EGGS


Achieving a Win-Win Situation

• For MARDI/Marditech

• The research could be put into commercial use.


• Generate revenue for the organisation for future
research etc.
• The research results could actually benefit the
consumers
• Further recognition from the public through the
promotion and
advertisement that LTK carried out.

© JAMALUDIN ABU BAKAR (2010)

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CASE STUDY: OMEGA-3 EGGS


LTK-Marditech - > 11 years Technology Partnership

• It has created a new segment in the egg market and at the


same time provides additional value to the consumers
• The launch of LTK Omega Plus eggs has brought
excitement
to the egg industry
• Other than additional revenue to LTK and MARDITECH
it has attracted other farms to have the ‘me-too’ products.
• It has helped to spur the supporting industries in the
economy
such as advertising and packaging.

© JAMALUDIN ABU BAKAR (2010)

SUMMARY

• Intellectual Property drives innovation and national


economy
• IP Rights protection is in place through various acts and
statutes
• IP registration is important for success of
commercialization, although it does not ensure success
• Various routes of commercialization can be considered by
IP owner
• To ensure success, IP owner need to undertake three
important assets:
•Intellectual Capital
• Structural Capital
• Business assets

© JAMALUDIN ABU BAKAR (2010)

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