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Wednesday, 20 April 2016

MOSTI Funding for IP: ScienceFund, TechnoFund, InnoFund


As some of you innovators and inventors in the technology sector may know, MOSTI stands for the Ministry of Science, Technology and Innovation. It is one of the more important ministries for you, because MOSTI is the ministry that gives funding for technology and innovations.

If you're not in the mood to read about MOSTI background, skip the next section and scroll down to the picture of the RM10 note. Alternatively, you can jump straight to the funding portion or read about the ScienceFund, TechnoFund, or InnoFund.

Background of MOSTI

From the ministry's "About Page", here's the timeline of its brief history to date:
  • 1973: Established as the Ministry of Technology, Research and Local Government.
  • 1976: Changed name to Ministry of Science, Technology and Environment (MOSTE).
  • 27 March 2004: Restructured to Ministry of Science, Technology and Innovation (MOSTI) to lead the National ICT Development function, Multimedia and Innovation.
  • 2007: Science and technology function divided into Biotechnology, ICT, Industry, Sea to Space and S&T Services clusters.

MOSTI's OBB Programmes

MOSTI has five Outcome Based Budgeting (OBB) programmes:
  1. STI Development Programme
  2. STI Services Programme
  3. STI Acculturation Programme
  4. Ministry Management
  5. Policy Evaluation and Performance Management
I couldn't find much information about MOSTI's OBB programmes, but I guess that it means MOSTI's funding programmes are based on budgeting considerations. So, if STI development is an important consideration, then registration of IPR related to technology and innovation will be a ministry priority. You, the inventor and innovator, benefit from it.

MOSTI's MKRA

MKRA stands for Ministry Key Result Areas. The more important MKRA seem to be MKRA 1 and MKRA 2. 
  • MKRA 1: Generation of Innovation-Led Economy via Science, Technology and Innovation. Its KPI's (Key Performance Indexes) are (a) New Investments, (b) Total Jobs, (c) Contribution to GDP (RM in billions), and (d) Technology Investment (RM in billions)
  • MKRA 2: Intensification of Research and Development in STI. Its KPI's are Number of IPR filed or registered.

Unfair Advantages and IPR

When you think about it, MKRA 1 and MKRA 2 are linked. Venture capitalists and angel investors like to invest in businesses that have, as they like to say, "an unfair advantage". Patents and other legal hurdles represent unfair advantage, which competitors have to work around. And it is not so easy to work around a patent (although, there are ways of dealing with it, like cross-licensing or patent pooling). 

Angel investors and VC's like "unfair advantages" because marketing technological innovations takes time. Markets need to be educated, and patents last only 20 years. In the pharmaceutical industry, a patented drug cannot immediately be commercialized. A patent represents only the first step to protect the IP of the drug, after which the pharmaceutical company must run extensive clinical trials to ensure that no ill-effects will come from using the drug. (Read a case study on how an osteoporosis drug was developed and approved, from the US FDA.)

Anyway, on to the most important part of the article.

MOSTI has three funds that innovators and technologists may apply for:
ScienceFund, TechnoFund, and InnoFund.

MOSTI Funding

All right, now let's see what MOSTI has available by way of funds. There are three major funds that you can apply for, namely the ScienceFund, the TechnoFund, and the InnoFund. These are described below.

All three funds have a maximum funding for registration of patents up to RM10,000.00. However, the quantum of funding under all three funds are much higher. To get more information, you can read the Guidelines for the three funds: ScienceFund, TechnoFund, and InnoFund. 

But first, read the rest of this article for a summary.

That MOSTI funding is good stuff.


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ScienceFund

The ScienceFund is described as follows:
ScienceFund is a grant provided by Government to carry out R&D projects that can contribute to the discovery of new ideas and the advancement of knowledge in applied sciences, focusing on high impact and innovative research.
Its objectives are:
  1. to support research that can lead to the innovation of products or processes for further development and commercialisation; and/or
  2. to generate new scientific knowledge and strengthen national research capacity and capability.
 Funding is available for Applied Sciences.

Quantum of funding for each project is up to RM500,000.00. (Para 4.1, Guidelines for ScienceFund)

ScienceFund Eligibility Criteria

The fund is open to all research scientists and engineers who are employed on a permanent or contractual basis from the following organisations:
  1. Government Research Institutions (GRIs);
  2. Government Science, Technology and Innovation (STI) Agencies; and
  3. Public and Private Institutions of Higher Learning (IHL) with accredited research programmes.
Expatriates working under contract with any of the above institutions are eligible to apply. However, the project must have a permanent Malaysian co-researcher from the same institution, well-versed with the project, to ensure its completion in the event the expatriate’s contract is terminated.

Scope of ScienceFund Funding

ScienceFund covers preliminary research leading to laboratory proof of concept or towards the development of new products or processes. The quantum of fund approved will be determined based on the merit of each application.

Eligible categories for funding include:
  • Wages and Allowances for Temporary and Contract Personnel
  • Travel and Transportation
  • Rentals
  • Research Materials and Supplies
  • Minor Modifications and Repairs
  • Special Services
  • R&D Equipment and Accessories

And that's it for the ScienceFund. Read the ScienceFund Guidelines if you are interested to find out the research priority areas. Also read the Flagship Programmes at Appendix 1, Table 2. (The top three flagship programmes are renewable energy, advanced manufacturing, and electronics.)

TechnoFund

The TechnoFund is described as follows:
TechnoFund is a grant scheme which aims to stimulate the growth and successful innovation of Malaysian enterprises by increasing the level of R & D and its commercialisation. The scheme provides funding for technology development, up to pre-commercialisation stage, with the commercial potential to create new businesses and generate economic wealth for the nation.

Its objectives are:
  • To undertake the development of new or cutting edge technologies or further develop/value add existing technologies/products in specific areas for the creation of new businesses and generation of economic wealth for Malaysia
  • To undertake market driven R & D towards commercialisation of R & D outputs
  • To encourage institutions, local companies and inventors to capitalise their intellectual work through intellectual property (IP) registration
  • To stimulate the growth and increase capability and capacity of Malaysian technology-based enterprises, Malaysian Government Research Institutes (GRI) and Institutions of Higher Learning (IHL) through both local and international collaborations.
Quantum of Funding is up to RM3.0 million. (Para 5, TechnoFund Guidelines.)

TechnoFund Eligibility Criteria

Eligible applicants can be researchers and other individuals from:
  1. Small and Medium Enterprises (SME's); 
  2. Institutions of Higher Learning; 
  3. Research Institutes; and 
  4. Science, Technology and Innovation (STI) Agencies.
Priority will be given to applications with projects
  • that have been supported by the ScienceFund and have the potential to be commercialised; or 
  • from companies that have obtained the InnoCert recognition.

Companies (SME's) equity must
  • be at least 51% owned by Malaysians;
  • have a track record of 2 years, with financial reports;
  • have a minimum paid up capital of RM10,000.00.

Criteria for Proposed Projects:
  • must contain elements of technological innovation leading to commercialization of innovative products, processes and services; and
  • should be in pre-commercialization stage, with working proof-of-concept.

Scope of TechnoFund Funding

The Pre-Commercialization (TechnoFund) covers:
  1. Technology acquisition (foreign and/ or local) 
    1. Must be further enhanced; 
    2. Must provide the acquisition agreement, or if such an agreement is not in place, must provide details of the technology to be acquired; and 
    3. Total technology acquisition not more than 50% of total approved project cost. 
  2. the up-scaling of laboratory-scale prototype or the development of commercial ready prototype; or 
  3. pre-clinical testing/clinical testing/field trials.

TechnoFund funding can be used for:

  1. pilot plant / prototype – equipment and supporting infrastructure which is directly related to the pilot plant;
  2. New IP Preparation and Registration in Malaysia only (excluding maintenance)- existing and new IP;
  3. market testing / assessment and/or evaluation;
  4. regulatory and standards compliance;
  5. expenditure for services (consultancy/ testing) not exceeding 20% of project cost applied; 
  6. contract expenditure applicable to IHLs and GRIs only (research assistant); 
  7. raw materials/consumables; and 
  8. technology/ IP acquisition (if applicable) not exceeding 50% of project cost applied.

And that's it for the TechnoFund. Read the TechnoFund Guidelines if you are keen to learn more, especially since there's a promise of RM3 million....

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InnoFund

The InnoFund is described as:
InnoFund is a grant scheme which funds the development or improvement of new or existing products, processes or services with elements of innovation. The project must have economic value and improves the societal well-being of the community. InnoFund can be categorized into Enterprise InnoFund (EIF) and Community InnoFund (CIF).

The objectives of the InnoFund are two-fold, since the InnoFund is divided into Enterprise InnoFund and Community InnoFund.

The objective of Enterprise InnoFund is to increase the participation of micro-businesses, individuals in innovative activities and encourage technological innovation of new or existing products, process or services for commercialisation.

Whereas, the objective of Community InnoFund is to assist community groups in translating knowledge and ideas into products, processes or services that improve the socio-economic standing and quality of life of the community.


Quantum of Funding depends on category:
  • Individuals and sole proprietors can get up to RM50,000.00 under Enterprise InnoFund;
  • Micro or small companies can get up to RM500,000.00 under the Enterprise InnoFund; and
  • Community Innovation Funds can get up to RM500,000.00 under the Community InnoFund.

InnoFund Eligibility Criteria

The Enterprise InnoFund is open to individuals, sole proprietors, micro companies, and small companies.

Whereas, the Community InnoFund is open to registered associations / NGO's, registered cooperatives, and community groups.

Similar to the TechnoFund, priority will be given to applications with projects
  • that have been supported by the ScienceFund and have the potential to be commercialised; or 
  • from companies that have obtained the InnoCert recognition.

Enterprise InnoFund Applicants

For the Enterprise InnoFund, companies must:
  • have a minimum equity of 51% held by Malaysians;
  • have a paid up capital of RM10,000.00 or more (although, startups can be exempted from this requirement, with proof of ability to sustain)
Interestingly, the requirements for companies' sales turnover and/or number of employees depends on the sector.

SectorMicroenterpriseSmall enterpriseMedium enterprise
Manufacturing, Manufacturing-Related Services and Agro-based industriesSales turnover of less than RM250,000 OR full time employees less than 5Sales turnover between RM250,000 and less than RM10 million OR full time employees between 5 and 50Sales turnover between RM10 million and RM25 million OR full time employees between 51 and 150
Services, Primary Agriculture and Information & Communication Technology (ICT)Sales turnover of less than RM200,000 OR full time employees less than 5Sales turnover between RM200,000 and less than RM1 million OR full time employees between 5 and 19Sales turnover between RM1 million and RM5 million OR full time employees between 20 and 50

The Enterprise InnoFund project must be for the development of new or existing products, processes or services with the potential for commercialisation.

Community InnoFund Applicants

For the Community InnoFund, the applicant must be a registered or Government-recognised Malaysian community group.

The proposal must contain innovative elements leading to the development of products, services or processes that improve societal well-being.

Scope of InnoFund Funding

For both Enterprise InnoFund and Community InnoFund, the funding components include:
  • Specialised equipment
  • Pre-clinical or clinical trial or field trials
  • IP preparation and registration in Malaysia only (maintenance not included)
  • Market testing
  • Regulatory and standard compliance
  • Expenditure for Services not exceeding 40% of project cost (consultancy/ testing)
  • Raw materials
And that's it for the InnoFund. Read the InnoFund Guidelines if you are keen to know more.

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Good Luck

Thanks for reading, and good luck to you if you are applying. If you need a consultation about IP strategy or innovation marketing, please consider contacting me. I'm currently doing a doctorate on the intersection between business and technology.
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