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INTELLECTUAL PROPERTY (IP) MANAGEMENT AND

COMMERCIALIZATION OF AGRICULTURAL RESEARCH:

A CASE OF MARDI

Tapsir SerinDirector of Strategic Planning and Innovation Management Centre of

Malaysian Agricultural Research and Development Institute (MARDI)

OVERVIEW OF MALAYSIAN AGRICULTURAL RESEARCH INSTITUTE

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Government of Malaysia

Research InstituteMARDI

Malaysian Palm Oil Board

Malaysian Cocoa Board

Malaysian Rubber Board

Forestry Research Institute

Veterinary Research Institute

Fisheries Research Institute

Public Universities

Borneo’s Research Agencies

MARDI THRUST AREASConducting research in the areas of food and

agriculture1

Development, promotion, commercilization and transfer of technology

Technopreneur Development

Competency development towards progress in agriculture sector

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MALAYSIAN AGRICULTURAL RESEARCH AND DEVELOPMENT INSTITUTE (MARDI)

OVERVIEW MARDI

Director General Office

Research & Development Centers

Technology Transfer & Commercialization Centers

Operation Centers

Strategic Planning & Innovation Management

Centre29 Regional Research Stations

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OVERVIEW OF MALAYSIANPUBLIC AGRICULTURAL R&D SPENDING &

RESEARCH STAFFS LEVELS 2010

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Table 1. Overview of Public Agricultural R&D Spending And Research Staff Levels, 2010

 Type of agency

Total Spending   Total StaffingMalaysian

RinggitPPP Dollars Shares Number Shares

(million 2005 prices) (%) (FTEs) (%)MARDI 183.0 105.5 26.3 578.0 35.9Commodity boards (3) 304.3 175.5 43.7 305.0 19.0Sabah and Sarawak (7) 28.9 16.7 4.2 109.4 6.8Other government (9) 110.1 63.5 15.8 379.8 23.6Subtotal government (20)

626.3 361.2 90.0 1,372.2 85.3

Higher education (13) 69.4 40.0 10.0 237.3 14.7Total (33) 695.6 401.2 100 1,609.4 100Sources: Calculated by authors from ASTI–MARDI 2011–12; Stads, Tawang, and Beintema 2005; and

Universiti Malaysia Sarawak 2012.Notes: Figures in parentheses indicate the number of agencies in each category.

Data exclude degree-qualified technicians lacking official researcher status.

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MALAYSIAN IP POLICY

Purpose • IP as a new engine of growth for the nation.• Fosters the creation, protection, enforcement, management and maximum

exploitation of IP.

Objectives • Strengthening IP administration of IP Corporation of Malaysia (MyIPO).• Promotion of IP generated and commercial exploitation activities.

Activities• Managing R&D innovations.• Provide incentives, grants, enforcement and dispute settlement.• Facilitate commercial exploitation by suitable valuation methods, contractual and

licensing rules.• Development of proficient IP management capabilities covering the whole IP

chain activities from creation to protection.• Good infrastructures for IP transaction.• Protection of National IP interest and promotion foreign investment and

technology transfer.

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MARDI’S IP MANAGEMENT

Director General Office

Strategic Planning and Innovation Management Centre

Research and Innovation Management Programme

Strategic Planning and Policy

Corporate Affairs Secretariat Programme

MARDI first filed her IP in the Malaysian Intellectual Property Office (MyIPO) for an invention entitled “Method of Producing Dietary Fibre Powder from Oil Palm Trunk and Function Food Thereof”

(22 April 1994 and obtained Patent no. MY 129137-A).

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MARDI’S IP POLICYOBJECTIVES

To protect MARDI’s integrity and interests

To promote, facilitate and encourage creativity and innovative capability among employees

To create a secure environment where original inventions/innovations can be protected and rightfully owned

To provide the employees with fair and reasonable recognition, awards and incentives to encourage them to develop new inventions/innovations

To encourage and develop the Institute’s growth, progress and success through active application of research, development and commercialization activities

To facilitate and enhance the transfer of Institute inventions/innovations derived from research and the dissemination of knowledge to the food and agriculture sector

MARDI’S IP OWNERSHIPCHECK LIST

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1 Created from a specific project funded by MARDI or funds obtained by MARDI. √2 Created from substantial use of its resources and/or services. √3 Created by employees during the course of study which is sponsored by

MARDI. √4 Resulted from the use of pre-existing Intellectual Property owned by MARDI. √5 That forms part of Intellectual Property created by a team of employees and

non-employees. √6 From any courses that are printed, videotaped or recorded using any other

media and may not be distributed without permission. √

MARDI’S TECHNOLOGY MANAGEMENTPROCESS FLOW

(ISO 9001:2008)

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1. Declare generated technology to Technology Management Committee (TMC).

3. TMC will recognise the generation of the technology

2. Technology assessment report by experts to TMC on the novelty, patentability, market potential, market feasibility, technology viability and commercialization mode.

5. TMC give judgment on the commercial strategies and approach.

4. TMC will give endorsement on IPR protection whichever necessary

MARDI’S TECHNOLOGY MANAGEMENTOUTPUT

11MARDI has been awarded

“Best National Intellectual Property Management Award 2015”

StatisticR&D&C

Outcome2005-2013

i • Technology licensing -66• Licensed Company-47• Consultation – 7• Active licensed projects–

32• Technology in Negotiation

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ii• MARDI IP Policy- 50:50• Quantity IP – 198• Licensing Fee,

Management Fee Royalty- RM 4.3 Mill.

• Estimeted Technologies Value– RM 41.6 Mill

MARDI’S TECHNOLOGY COMMERCIALIZATIONCHECK LIST

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1 Does the technology offer a cheaper and/or a better way of accomplishing something? √

2 Are there competing technologies available and if so how much better is the invention? √

3 Does the invention provide a technological answer to an existing problem? √4 Does it have the potential for creating a new market? √5 How much investment, in terms of both time and money, will be required to

bring the invention to the marketplace? √6 Will the inventors continue to work on the invention? √7 What will be the potential pay-off for a company that makes an investment in

the development of the invention? √

MARDI’S TECHNOLOGY COMMERCIALIZATION MANAGEMENT

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• Commercialization of MARDI’s technology is managed by the Evaluation and Upscalling Programme under the Centre of Promotion and Business Development.

• The technology commercialization is guided under MARDI Commercialization Policy to ensure that the rules and procedures are being followed.

• The flow of commercialization will start from an ideation stage until the determination of commercialization mode.

• The ideas invented from MARDI’s pool of experts in relevant fields will have to pass several development stages in order to successfully transform into innovation.

• This innovation has taken into consideration the needs of pre commercialization, commercialization or public good.

• Commercialization of MARDI’s technologies are through licensing, consultation, outright sales and arrangement of contract manufacturing (OEM).

• The majority of commercialization mode (more than 80%) is through licensing which is the key drivers in MARDI’s commercialization success.

MARDI’S COMMERCIALIZATIONPROCESS FLOW

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• Step 1. Technology package evaluation including evaluation of viability, feasibility and current market accesability.

• Step 2. Technology promotion to enhance ”technology in offer" and to find the potential partners by business matching, forum, exhibition and business talk

• Step 3: Potential investors or partners will submit the letter of intent (LOI) with several screening criteria such as the company status, financial capability, the availability of the interested technology and the company expertise.

• Step 4: Preparation of term of business and Non-Disclosure Aggreement (NDA). • Step 5: Preparation of Technology Licensing Agreement based on the agreeable

licensing terms and conditions including specific technology Intellectual Property Right (IP).

• Step 6: Upon agreeable by both parties, the Technology Licensing Agreement which includes the agreeable royalty fees and management fees is due for signing to complete the licensing process.

• Step 7: Scheduled monitoring of commercialization status and progress is conducted to identify any arising issues and challenges faced by the commercial partner.

MARDI’S TECHNOLOGY COMMERCIALIZATIONIMPACT

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From 2005 to mid-2015, a total of 85 technologies were commercialized involving 47 companies and 66 licensees. The value of technology involved is worth RM 42.6 million. A total of RM 6 million has been collected in the form of royalties. Examples of technologies commercialized as in Table 2.

  Technologies generated Beneficiary/ Commercial partners1 Rice varieties: MR 219, MR 253, MR 263, MR

269, MARDI 284Rice farmers, Rice Regional Authorities

2 Rice clear field system: MR 220CL1 and MR 220CL2

BASF International, Farmers

3 Rice Foundation Seed 12 rice seed producers4 Specialty Rice Varieties: MARDI Wangi 74 and

765 anchor companies

5 Exotica papaya Exotic Star and Far East Company6 Josapine pineapple South Fruit Sdn Bhd7 Minimal processing of Jackfruit and Durian Libro Agro Sdn Bhd and others8 Starfruit under netted structure Sri Balakong Sdn Bhd9 Growpine Fertilizer for Pineapple PK Fertilizers Sdn Bhd10 Omega 3 Eggs LTK Bhd11 Nitrohumic Acid CCM Fertilizers Sdn Bhd12 New Modified Virgin Coconut Oil (MVCO) EVCO Sdn Bhd13 Tiger Milk Mushroom Ligno Biotech Sdn Bhd14 Salmonella Detection Kit (MicroTez) OPHC Holdings Sdn Bhd

MARDI’S TECHNOLOGY COMMERCIALIZATIONISSUES AND CHALLENGES

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• Lack awareness and understanding of the importance of intellectual property rights (IPRs). Researchers are missing out, failing to commercialize their own ideas and sometimes failing to prevent others unfairly exploiting their research 

• In the joint venture research scenario, contract negotiation arrangement and intellectual property ownership are the biggest drawback.

• In technology licensing , negotiations between parties are very important in ensuring successful transactions.

• Research organizations frequently lack the skills in negotiating with potential users and business counterparts which contribute to the failure of exploiting the full potential of IP commercialization

• Insufficiency of experience and knowledge in managing IP for the organization. • The absence of a dedicated department or body, technology office (TTO) or technology

commercialization office (TCO), • Lack of funding for IP filing and maintenance especially for international applications.

Patent applications are costly, and more so for international applications • Lack of competent workforce on authority and enforcement portfolio, especially IP judge

and expert witness..

MARDI’S TECHNOLOGY COMMERCIALIZATIONWAY FORWARD & CONCLUSION

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• Concerns about agriculture investment, return to investment, IP generation and commercialization of research is rising.

• Commercializing IP is about getting products or services into the market place. Commercialization strategy depends on many variables such as individual circumstances, business capabilities, competitive environment and access to finance.

• Licensing is the most common commercialization method, but it is just one of many options for taking IPs to the market place..

•  MARDI is planning to establish Technology Commercialization Office (TCO) • Combining the current IP Management Unit in Research and Innovation Management

Programme with the Evaluation and Up-scaling Programme as a one-stop center to manage IP and commercialization activities.

• By embarking on this step would mean more efficient and effective protection and management of IPs, partners for licensing, partners for supporting research contracts and funding as well as support new technology-based spin-offs.

• It would further enhance and strengthen the key success elements such as technology internationalization and prototype support as well as active support for IP protection.

COMMERCIALIZATION

No IP MY-140578-A

Filing to 10 countries

Company: EVCO Sdn. Bhd.

Location : Pasir Gudang, Johor

Period: 5 years

Business Value: RM 20.46 mill

Production of EVCO and Its

Application on Animal(EVCO)

COMMERCIALIZATION

No IP MY-140578-A

Filing to 10 countries

Company: Biotropics Malaysia

Berhad Location : Glenmarie Industrial

Park, Shah Alam

Period: 5 years

Business Value: RM 10 mill

New Modified Virgin Coconut Oil

(MVCO)

COMMERCIALIZATION

PI 2012001756 &

PCT/MY2013/000083

Company: Golden Tri Sunrise

Sdn. Bhd.

Location: Ipoh, Perak

Period: 10 years

Business Value: RM 1.07 mill

Dietry Fibre Powder From Pink

Guava

COMMERCIALIZATION

No IP PI 2010004739, PI

2010004976, MY 10-01319-0102,

MY 10-01320-0202

Company: OPHL Holdings (M)

Sdn. Bhd.

Location : Bandar Baru Bangi

Period: 5 years

Business Value: RM 0.8 Millions

Commercial Production of

Salmonella Detection Kit

(Microtez)

COMMERCIALIZATION

Syarikat: Innovasi Anggerik Sdn. Bhd.

Lokasi : Shah Alam, Selangor

Tempoh: 5 years

Nilai Perniagaan: RM 100,000

PI 2012002053: Durian Decorticator

PI 2010004969: Rambutan Decorer

PI 2010005309: Chilli Seed Separator

PI 2011004377: Juice Extractor and

Separator

Fabrication of Various Selected

Food Processing Machines

COMMERCIALIZATION

MY 130389 – A: Satay Skewering

Machine

MY 142949 – A: Rempeyek Making

Machine

PI 20060437 : Keropok Lekor Machine

Company: Power Booster Sdn. Bhd.

Location : Krubong, Melaka

Period : 5 years

Business Value: RM 100,000

Selected Food Machineries

COMMERCIALIZATION

Company: Nafas Jentera Sdn.

Bhd. Location : Petaling Jaya,

Selangor

Period : 5 years

Business Value: RM 200,000

PI 2012700166: Knapsack

Granular Dispenser

Backpack Granular Fertilizer

Dispenser

COMMERCIALIZATION

Company: Choong Heng

Engineering Sdn. Bhd.

Location : Kluang, Johor

Period : 5 years

Business Value: RM 420,000

MY - 151392 – A: A Silage

Machine

Otosil – Silage Making Machine

COMMERCIALIZATION

Company: Innovasi Anggerik

Sdn. Bhd.

Location: Shah Alam, Selangor

Period: 5 years

Business value: RM 250,000

PI 20060356: Coconut De-husker

The Commercialization of

Mechanical Coconut Dehusking and

Defibering Machine

COMMERCIALIZATION

Company: Waldania

Automation Sdn. Bhd.

Location: Ipoh, Perak

Period: 5 years

Business Value: RM 200,000

PI2012700245: Tray Seeding

Machine

Tray Seeder Machine

COMMERCIALIZATION

Company: Gading Kemajuan

Agro Sdn. Bhd.

Location : Bandar Baru Bangi,

Selangor

Period : 5 years

Business Value: RM 1.5

Millions

Trademark No. 2010001850

Commercial Production of

FERTIKIT and GREENKIT

COMMERCIALIZATION

Company: ABH Mega Sdn. Bhd.

Location: Kulim, Kedah

Period : 5 years

Business Value: RM 20 Millions

Formulation: MARDI’s Trade

Secret

The Commercial Production of Enriched

and Charge Clinoptilolite-based Natural

Organic Fertilizer

COMMERCIALIZATION

Company: CCM Fertilizer Sdn.

Bhd. Location: Shah Alam, Selangor

Period: 15 years

Business Value: RM 12 Millions

Formulation: MARDI’s Trade

Secret

Production of NHA derivative Based

Product

and Calcium Booster

COMMERCIALIZATION

Company: BASF Sdn. Bhd.

Location : Shah Alam, Selangor

Period: 5 years

Business Value: RM 50 mill

NPVP PVP 2011/06/0007 & PVP

2011/06/0008

Production Of Rice Varieties MR 220-

CL1 and MR 220-CL2 plus On duty

Clearfield Rice Production System

Thank You