SPEECH BY MR LEE YI SHYAN,MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE VISIT TO OLD CHANG KEE AND LAUNCH OF THE INTELLECTUAL PROPERTY MANAGEMENT (IPM) FOR SMES PROGRAMME, 23 JANUARY 2007, 1.30 PM AT TEN &

Mr Han Keen Juan, Chairman, Old Chang Kee

Ladies and Gentlemen

Good Afternoon

First, let me thank Old Chang Kee for hosting this event.I am happy to join all of you here for the launch of the Intellectual Property Management for SMEs Programme.

Some of you might be asking - why launch an Intellectual Property, or IP, programme in a food company?After all, most people would relate IP to high-tech products.But let me tell you, there is IP even in something as simple as a curry puff.

IP as a Competitive Business Strategy

So, what is IP?Put simply, IP are creations of the human mind, protected by law to facilitate commerce.IP can take forms such as copyrights, trademark registrations, registered designs, patents, trade secrets and confidential information. Many local businesses do not realise it, but there is a lot more potential in IP than we are aware of.Our businesses should ask themselves: What makes my products or services unique?What’s so special about the processes?And what about our brand name and packaging designs that make us distinctive?No matter what business you are in, what product you make, or what service you provide, your company has valuable intangible assets and potential IP.

As with any property or asset, companies must manage their IP properly.They need to put in place a system to create, own, protect and exploit their IP.Given a proper internal IP management system and conducive legal environment, companies can leverage on IP to generate revenue by licensing or franchising, attract partnerships, protect market share, and further enhance their product or service offerings.

Leveraging on IP for Growth – Examples of Singapore SMEs

With ideas and innovation driving value creation in a competitive global economy, businesses increasingly need IP strategy to gain and sustain comparative market advantage.Many top companies have embraced this; from Dell to Proctor & Gamble to Coca Cola, these corporations have used IP to capture market share and shareholder value.It is not just multinationals that are in this movement.SMEs have also leveraged on their IP to grow and compete in international markets.

Let us look at some local examples.OAAG is a global golf services and membership company that does not own any golfing greens, yet its more than ten million members can play at over 6,500 golf clubs around the world.How does OAAG do it?With its simple, but unique, business model.The company acts as a middle-man between its members and the clubs using its own Customer Relationship Management system and confidential customer database.Recognising that the ability to manage confidential information is key to its success, OAAG is now leveraging on its intangible assets to expand its business through franchising.

Another example is Stikfas, a home-grown toy manufacturer that has made a name for itself internationally.The company is just five years old but it has sold over one million action figure toys in Japan, UK, US, South Africa and other markets.What is unique about Stikfas’ toys is its ball-and-socket design, which has been awarded a US patent.Leveraging on its IP, Stikfas licensed its brand to US toy giant Hasbro from 2002 to 2004, the first local toy company to secure such a major international deal.Stikfas has since decided to regain control of its core line and manage the design, marketing, manufacturing and distribution channels itself.While designs, patents and copyrights are important, Stikfas also places emphasis on the IP creation process and stakeholders as part of its whole IP framework.

Another Singapore company is Trek 2000, which invented the ThumbDriveTM and obtained legal protection for its invention.Registering and protecting its trademark and patents around the world has been expensive.But for Trek, it was a calculated business decision deemed necessary even at the early stage of concept development.The company considered the commercial value of the invention and the potential revenue stream before placing large amounts of resources into IP management.These efforts are paying off.Trek’s licensing segment is a key business growth driver, reaping more than $2.5m in 2006.When properly managed, IP will be an investment and an asset.

Clearly, IP is an essential enabler for companies who want to achieve and sustain a competitive advantage.It is therefore vital for our SMEs to manage their IP properly.However, we observe that there is still slow implementation on the ground.Findings from a 2006 survey commissioned by the Intellectual Property Office of Singapore, or IPOS, showed that only three out of ten local companies have strategic or financial goals related to IP creation and performance.Only two out of ten have documented strategies relating to the role of IP in the company.Smaller companies also tend not to invest in IP.We hope to encourage more SMEs to recognise the importance of IP management as a business capability.

IP in a Puff

Let us look at our host today, Old Chang Kee.What ingredients make up the Old Chang Kee curry puff?Potatoes, egg, meat and spices, wrapped inside a pastry skin.There is yet one more important ingredient - IP.Old Chang Kee is a strong Singapore brand, backed by robust internal processes and product innovation.To continue growing, the company continually invests in developing and introducing new products and concepts to attract new customers. Locally, they have introduced two new flavours for their curry puffs, Sardine’O and Pepper’O, and have also launched a new Take 5! fast food concept[1] Their innovative spirit extends to its overseas business.I am told that in China, Old Chang Kee’s new麻辣(Sichuan pepper) puff is very popular.

Old Chang Kee recognises that as the company grows, it is important to leverage on its IP to expand its business.It has therefore embarked on a holistic intellectual property management programme, to optimise the value of its intangible assets, which include its brand, trademark and recipes.

IP Management Programme for SMEs

To encourage more SMEs like Old Chang Kee to develop IP management systems, SPRING Singapore and IPOS are launching a new $9 million Intellectual Property Management (IPM) for SMEs Programme.This programme aims to help some 200 SMEs develop capabilities to manage their IP over the next two years.

This programme is specially tailored to SMEs’ needs, and supports SMEs’ IP management journey in two phases.The first phase uses IPOS’ SCOPE IPTM[2] diagnostic tool, to identify existing and potential IP in the company as well as possible areas of capability development.The second is the implementation of IP management capabilities, which may include areas such as development of branding and franchising.To encourage more SMEs to embark on this journey, we will defray a portion of the costs involved.

I encourage our SMEs to come forward and tap on this new programme.Protecting products by filing patents and trademarks is just part of the picture; we also need to look at the wider system to create, own, protect and exploit IP to extract maximum value.There is potential IP in any product or service across industries, and we will work with our SMEs to better leverage on IP to capture growth opportunities.

Thank you.