Protecting Your Brand: The Vital Role Of Intellectual Property For Listed Corporations In Malaysia
Intellectual property (IP) is a term used to describe the intangible assets that are owned and protected by a company. This includes patents, trademarks, copyrights, and trade secrets. In Malaysia, IP is protected by various laws and regulations, including the Patents Act 1983, the Copyright Act 1987, the Industrial Designs Act 1996, and the Trademarks Act 2019. For a listed corporation as well as companies seeking to list on Bursa Malaysia Securities Berhad, IP can be a critical component of its success and value proposition. In this article, we will explore the reasons why IP is important for a listed corporation.
A company's brand identity is its personality, values, and reputation, which are communicated through its name, logo, and marketing materials. Trademarks provide legal protection for these brand elements, preventing others from using them and diluting the company's brand identity. A trademark is a sign or symbol that distinguishes a company's goods or services from those of other companies. Registering a trademark gives a listed corporation exclusive right to use the mark in connection with its goods or services. This means that others cannot use a similar or identical mark that could cause confusion among consumers, and consequently, provide protection to the brand's reputation. Copyrights can prevent others from copying a company's creative works, such as advertisements or packaging, which can also protect the brand's image.
Brand recognition is critical for a listed corporation as it helps to build a loyal customer base and increases the likelihood of repeat business, which in turn leads to increased revenue and profitability. A strong trademark helps to create and maintain brand recognition, which is essential for listed companies seeking to differentiate themselves from their competitors. For example, the trademarked Nike swoosh or the golden arches of McDonald's are instantly recognizable symbols of the respective brands.
IP can provide a competitive advantage for a listed corporation by creating barriers to entry for competitors. For instance, patents can protect a company's inventions and innovations, trademarks can protect a company's brand and reputation, and copyrights can protect a company's creative works. By obtaining and protecting IP, a listed corporation can prevent others from using or copying its ideas, products, or services, which can give it an edge in the market. Without this protection, competitors could easily copy the company's technology and enter the market, reducing the corporation's competitive advantage.
IP can provide legal protection for a listed corporation. If a company's IP is infringed upon, it can take legal action to prevent others from using or copying its ideas, products, or services. This can result in monetary damages or injunctions, which can help protect the company's interests and reputation.
IP can also be a significant source of revenue for a listed corporation. For example, licensing patented technology or selling the rights to use a trademark can generate income for the company. Additionally, a company's IP can increase the value of its products and services, which can result in higher prices and greater profits.
IP can increase the overall value of a listed corporation. Investors may consider a company's IP portfolio when making investment decisions. A strong portfolio can indicate that a company has invested in research and development and has a sustainable competitive advantage. This can be attractive to potential investors and increase the company's stock price.
It's important to note that the steps to register an IP in Malaysia may vary depending on the type of IP being registered and the requirements of the IP Corporation of Malaysia (MyIPO). Essentially, the trademark registration process involves conducting a search, preparing the application, submitting it to MyIPO, waiting for examination, responding to objections if any, and receiving registration. Therefore, companies seeking to be listed on Malaysia’s stock exchange are encouraged to submit the application to register their trademark as soon as possible, as the process may take up to several months. Registering the trademark sooner rather than later can also help to avoid potential delays or disputes during the listing process, which can ultimately save time and costs in the long run.
Authored by Ivy Tee Sook Peng, an associate with the firm’s Corporate and M&A practice.
31 March 2023