[SINGAPORE] The Intellectual Property Office of Singapore (Ipos) will continue to focus on making the Republic an attractive destination for multinational corporations to conduct research and development (R&D), said its new chairman Nicky Tan.
Drawing more of these companies to spend their research dollars in Singapore will create “good jobs” for locals and offer “extra work” for small businesses, Tan told The Business Times in his first media interview after taking up the new role.
“I think it will also provide a pathway to encourage our local enterprises to start thinking and investing in intangible assets (IA) and intellectual property (IP),” he noted.
In turn, these cross-border agreements make it easier for Singapore companies to protect their IP when venturing abroad, and allows them to monetise their IA and IP.
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One example is a 2022 agreement between Ipos and Thailand’s Department of Intellectual Property, which allows for faster IP registration in both countries.
Tan said: “(This) makes it much easier for our companies to go there to do business, and not be worried about their brands and trademarks and all that being exploited.”
Changing mindsets
Tan is no stranger to Ipos, having joined the board in April 2019 before serving as deputy chairman from 2020. He was appointed chairman in April this year, taking over from lawyer Stanley Lai.
A chartered accountant by training, he previously worked as a partner at Arthur Andersen and PwC, and currently helms nTan Corporate Advisory, a boutique corporate finance and restructuring firm.
He will be working with Ipos chief executive Tan Kong Hwee, who moved from the Economic Development Board and assumed the position on Mar 1.
The chairman’s background in accounting equips him to explain to business owners – particularly of small firms – the importance of registering trademarks and patents, a cause he is passionate about.
Some small business owners shy away from protecting their IP due to registration costs and perceived hassle, he noted. But clear examples of value creation can change their minds.
“If you are able to show them the statistics – Nvidia, someone is paying (it) US$34 for every dollar of assets they have; and Sea, someone is paying (it) US$7.50 for every dollar (of assets) they have.
“Then it begins to resonate in their mind, (and) they ask: ‘What is this magic potion that you have? What is this secret sauce you have?’”
Tan was referring to the gap between companies’ book value – total assets minus liabilities – and their market capitalisation.
Studies have shown that among S&P 500 companies, the share of IA – the proportion of market capitalisation excluding book value – has risen from about 60 per cent three decades ago, to around 90 per cent today, he added.
In the local context, Century Bakkwa as an example of a boutique business, he said, that is able to sell its products at a “meaningful premium” over traditional producers due to its brand, which is a form of IP.
He is now trying to encourage Century Bakkwa on what it should do with that, such as exploring franchising opportunities.
Dealing with AI
On the issue of artificial intelligence (AI) – particularly generative AI – Tan said that an international framework will be needed to fairly compensate creators whose works have been used in generating AI outputs.
One possible model could mirror the way music royalties are tracked and distributed, he suggested.
“This is fresh off the top of my head – not clarified with the experts – but I foresee a situation where AI can be used to trace and allocate how much an AI-generated image took from individual creators,” he said.
Ultimately, the global community “has to come out with frameworks that (can strike a) balance between encouraging creativity and innovation, and protecting the rice bowl of the creator”, he added.
