Funding Your IP – some light at the end of the tunnel - Part 2

Marie Julie Wan Ullok highlights incentives available for IP entrepreneurs in the film, multimedia and digital content industry



In Part I of this Article, we outlined various government grants in the areas of R&D, commercialisation of R&D, marketing and promotion, and acquisition and advancement of IP generally. The final part of this Article aims to highlight some of the other incentives offered by the government with a particular focus on the film, multimedia and digital content industry.




Under the Ninth Malaysia Plan, the government has allocated a RM150 million fund to support the growth of local digital content. The Content Industry Development Fund (eContent Fund) aims to facilitate the development and growth of Malaysian-made digital content and content-creation companies. “Digital content” is defined as works or intellectual property created using digital technologies and disseminated using digital means. The focus areas of the fund are entertainment; education and training; culture and heritage; and information-based content, and must be capable of being implemented in the form of either: animation (TV series, feature film, mobile); games (PC, online, console, mobile-handheld); simulation or virtual reality; or portal/web-based.


The eContent fund is administered by the Multimedia Development Corp (MDec) and the Ministry of Science, Technology and Innovation (MOSTI) and comprises two alternative forms. Conditional Grant 1 (CG1) is available to teams (comprising two individuals) or companies (micro-enterprise and small and medium-scale enterprise), with funds ranging from a maximum of RM90,000 for the former, and up to RM1,000,000 for the latter. CG1 is an outright grant and must fall within the focus areas and technology implementation outlined above. Funds are disbursed on a milestone basis.


Conditional Grant 2 (CG2) is based on a soft loan model and applies only to companies. Projects proposed under CG2 are subject to the requirement of pre-sales contracts and letters of commitment to purchase by prospective clients. The maximum disbursable amount is RM6,000,000. Recipients are obliged to repay the full amount based on a timeline agreed with MOSTI.




For companies with Multimedia Super Corridor (MSC) status accreditation and are at least 30% Malaysian-owned, it is possible to apply for R&D grants, also administered by MDec. These grants come under the purview of the MSC R&D Grant Scheme (MGS), whose objectives include assisting local companies in the development of innovative multimedia technologies and applications, as well as fostering R&D collaboration with international technology companies.


Under the MGS, the R&D eligible for funding is as defined under the Promotion of Investment Act 1986, viz. “any systematic or intensive study carried out in the field of science or technology with the object of using the results of the study for the production or improvement of materials, devices, products, produce or processes”. However, the following activities are not eligible for funding - quality control or routine testing of materials, devices, products or produce; research in the social sciences or the humanities; routine data collections; efficiency surveys or management studies; and market research or sales promotion. All R&D activities must be conducted in Malaysia. MGS will fund up to 70% of the total project cost, although the amount granted is determined on a case-by-case basis.



Another incentive under the purview of the MSC (Creative Multimedia Content Initiative) is the IP Creators Challenge Series competition. This focuses on content creation in the areas of animation, computer games, mobile content and digital comics. The competition has, to date, proved successful in the production of, among others, an animated trailer entitled ABC Monster Detectives by Animasia Studio Sdn Bhd. This trailer was among the top 30 most-screened programmes at the MIPCOM Junior trade show in Cannes, France, in October 2006.



Meanwhile, the Fiction Film Financing Scheme (FS) is administered by the SME Bank and aims to assist the development of locally-produced films. Under the FS, an applicant can secure a maximum financing of RM3,000,000 or up to 90% of the project cost. To be eligible for the FS, the applicant must be a locally-based company, registered with the Companies Commission of Malaysia and must possess a valid production film licensed under the Perbadanan Kemajuan Filem Nasional Act 1981. The applicant must also be able to show a solid track record or demonstrate experience in film production.



The two parts of this Article intend to provide a non-exhaustive outline of some of the available sources of funding and/or incentives provided by the government to encourage the development and expansion of locally created IP. Given the potentially significant costs involved in exploiting one’s IP, be it at the initial stages of R&D or at the subsequent stages of commercialisation of R&D, or even at the later stages of brand promotion or marketing, companies and/or individuals intending to undertake such activities would be well advised to take advantage of the available incentives.


MARIE JULIE WAN ULLOK ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )



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