Muhammad bin Ibrahim: Issues surrounding intellectual property Welcoming remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Intellectual Property Financing Conference 2014, Kuala Lumpur, 23 September 2014. *  *  *  It gives me great pleasure to welcome you today to the 2014 Intellectual Property (IP) Financing Conference – themed “IP Potentials in Financial Landscape Evolution”. I would like to thank the Malaysian Intellectual Property Corporation and the Asian Institute of Chartered Bankers for co-organising this event with Bank Negara Malaysia. We are also grateful to Secretary General Dato’ Sri Alias bin Haji Ahmad for joining us today to deliver the keynote address and officiate the conference. In the age of the information economy, the importance of intellectual property as a key enabler of productivity and economic growth has become significantly more pronounced as intangibles make up an increasing proportion of business investments. This conference was carefully designed to raise issues surrounding IP. Many issues and questions require resolutions and insights. How do we achieve strong and effective IP protection that will encourage companies to bring new innovations to the market? How do we unlock the value of IP within businesses and encourage the financial system to make better use of this value in financing decisions? How do we start to develop a more transparent market for IP assets? These are some of the issues and questions that the Conference should explore to optimise the full potential of IP in Malaysia.
Therefore, it is an opportune time that the boards and senior management of the financial service fraternity in Malaysia to begin to actively explore pragmatic approaches to assimilate IP into existing financing considerations. An important starting point is building a stronger knowledge base of IP issues within financial institutions. This includes identifying staff within your institutions to learn about these issues and providing them with local and international opportunities for training or exposure in IP. The industry, working together with relevant authorities, agencies and trade associations, should also come together to agree on specific initiatives to overcome barriers to the more effective use of IP assets in financing considerations. This includes developing practical guidance for both businesses and financial institutions in identifying, managing and valuing IP assets, and a way to include such assets within an institution’s existing credit assessment procedures. Such initiatives should also address the need for a clear and unambiguous legal documentation for a legal charge over IP. This promotes a cost effective and consistent approach in perfecting legal rights across the industry. In addition, processes to facilitate the continuous assessment and reporting of IP assets of borrower firms will also promote transparency on the performance of the assets and provide early signals of potential distress. Through such efforts, IP can be further developed as an individual asset class that supports lending decisions.