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Net Value: IP rights come to the fore
By Karamjit Singh
TheEdge Daily, Tuesday, February 21, 2006
If you had asked a homegrown technology company as recently as three years ago if it had any intellectual property amongst its assets, you could have got a blank look. But today, every technology company and even your average bricks and mortar company is keenly aware of the power of IP.
With companies like IBM and Qualcomm raking in the billions by licensing their IP to third parties, Malaysian software companies, especially those going for listing, have realised that pursuing IP adds value to their companies and can have a direct impact on their bottom line.
IP lawyers point out that CEOs now recognise that they can use their IP rights as a barrier to entry and intimidate new entrants. As one lawyer notes, "It is frequently a case of David against Goliath when IP holders defend their assets."
Companies are aware that beyond patents, which have traditionally been considered the only valuable form of IP, even trademarks and copyright can have great value, especially in terms of protecting their market against competitors.
And that is what Mesdaq Market listed JobStreet Corp ( www.jobstreet.com ), the leading Asian online recruitment company, is doing. Last December, it filed a suit against Jobs and More ( www.jobsandmore.com ), a new entrant in the online recruitment market. Call it our own David and Goliath fight. The suit contains an allegation of infringement of copyright subsisting in the interactive online recruitment website source codes.
Andrew Diamond, the managing director of Jobs and More, says the company will defend itself vigorously.
"jobsandmore.com, the website developed and maintained by Jobs and More, has been proprietarily built from the ground up without infringing any third party rights. We have utmost respect for the intellectual property rights of other people," says Diamond.
"Jobs and More will vigorously defend itself against these allegations and we intend to vindicate our right to compete fairly in the market and to deliver the best possible solutions to Malaysian employers and jobseekers," he adds.
Mark Chang, CEO of JobStreet, says his company filed the lawsuit to protect it from potential loss of revenue. "We face many other competitors on a fair basis but when the competition is unfair, we will not allow it. It took a lot of time and money to develop and modify our software to the level it is at today."
Because of the ongoing lawsuit, Chang and Diamond would not comment more on the issue, although Diamond says he does not have any ex-JobStreet people in his company. For sure, such copyright suits, though infrequent, have been filed before. In fact, Chang says his company had filed a similar suit against another company’s website in Malaysia before and that case was settled out of court. Interestingly, JobStreet also sent a legal notice to the company that runs a website called www.pickandpost.com.my . This was over résumés posted on JobStreet (which can only be viewed by employers registered with JobStreet) appearing on pickandpost.com.my.
That company sent a letter to JobStreet’s lawyers denying any wrongdoing. According to an executive of pickandpost.com, there was no further news from JobStreet after that. "We are a small fry compared to them and our website is so different from theirs." However, Chang says the company took action after receiving complaints from jobseekers that their Jobstreet résumés had appeared on www.pickandpost.com.my . He acknowledges that JobStreet is "quite aggressive in going after anyone who tries to cut a corner on us".
Chee Chong Hwa, CEO of Mesdaq Market-listed KarenSoft, can understand JobStreet’s aggressiveness. KarenSoft recently protested the application by a company for a trademark called Karsoft because this is too close to its own name and both companies are in the software industry. "Our branding is important to us and we guard our trademark jealously," says Chee. He is also protective of his software and respects that of other people.
Chee says new technical staff are specifically told that they were hired for their brainpower and to leave behind, figuratively speaking, anything from their previous company. "Similarly, the employment contract with us stipulates that when they leave us and use our source codes at their next place of employment, we will go after that company aggressively. We consider such actions by ex-staff a criminal act."
He feels that JobStreet could have a difficult task proving its case. "It may entail comparing source code line by line. What will happen if you lose the case?" he asks.
Still, companies should defend their IP. "IP rights or protection needs to be combined with an active enforcement strategy.
Many local companies think that by registering or taking steps to protect their rights, the IP is secure. That is not true. Global companies like Microsoft and IBM have huge enforcement budgets to stop infringements and, if necessary, to go to court. This sends a clear message that they are serious about protecting their assets and is an effective deterrent," says Renuka Sena, CEO of Mindvault Snd Bhd, which specialises in IP consulting and asset management.
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