Minister of State at the Department of Industry, Investment and Trade, Dr Norman Dunn (left) at a recent meeting of the Jamaica Observer Press Club. Opposite, Martin Brassell, co-founder and CEO of the British company Inngot, which advises the Jamaican government; and Kelsea Chambers, Head of Programs and Public Education at the Jamaican Intellectual Property Office. (Photo: Garfield Robinson)

Minister of State at the Department of Industry, Investment and Trade, Dr Norman Dunn said the Government had embarked on a game-changing move with its decision to allow the use of intellectual property (IP) as collateral.

“This company is a bold, bold venture that will potentially transform the business landscape and monetize our vibrant culture,” Dunn said at a recent meeting of the Jamaica Observers Press Club as he explained the plan to introduce IP-backed financing for Micro, Small and Medium Enterprises (MSMEs) in Jamaica.

Intellectual property-backed financing is designed to unlock the value of intangible assets such as patents, trademarks, software, trade secrets and copyrights, for companies seeking financing.

According to Dunn, IP-based financing presents a viable solution for providing capital to MSMEs who would normally not have easy access to finance.

“The value of intangible assets…will continue to rise, and Jamaica intends to be ahead of the curve. The government has recognized the need for our MSMEs to proactively protect, manage and market their intellectual property in order to derive the maximum benefit for themselves and the economy,” Dunn said.

“The fact is that many MSMEs are sitting on a treasure trove of untapped value. The ability to use intellectual property rights or intangible assets such as copyrights, patents, trademarks and other forms of guarantee will completely transform the financial landscape. With greater access to capital, our entrepreneurs will have new avenues of trade and export at their fingertips,” added Dunn.

He said Observer editors and journalists that the government has long recognized the central role that MSMEs play in the growth of the Jamaican economy and has sought to open the door to additional funding for them through the Property Security Act (SIPPA), which was adopted in 2013, and the creation of the National Registry of Collateral to provide increased access to credit for MSMEs.

“SIPPA facilitates the use of a fuller range of collateral, apart from land under secured lending. This expansion included intellectual property.

“What companies create and invest in, when protected by intellectual property, is of tremendous value. These assets can represent more than 80% of the average business value. These include trade secrets, trademarks, trade, know-how, internal systems, customers and supplier lists. The value of MSME IP may be closer to 90%. This value is what is needed to attract finance,” added Dunn.

The Minister of State emphasized that the culture and ingenuity of the Jamaican people have impacted the world in all areas and that the island is rich in intellectual property.

“We are among the most creative people in the world; we must sufficiently enable our local innovators to exploit the full potential of their intellectual property. It is imperative that the Jamaican government cultivates the landscape required to reap sufficiently the economic benefits of our Recognizing the value of intellectual property will spur innovation and competition, which in turn will spur entrepreneurial investment, ultimately generating more revenue and creating jobs,” Dunn said.

The IP-based financing initiative is executed by the Jamaica Intellectual Property Office (JIPO) with funding from a number of international bodies and the Government of Canada.

The British company Inngot, an expert in the discovery, diagnosis and valuation of intellectual property assets, advises the Jamaican government. Its co-founder and CEO, Martin Brassell, told the Observers Press Club that Jamaica is moving in the right direction.

According to Brassell, the knowledge economy is driven by the things that make a company different, such as its ideas and the unique knowledge it has.

“We need to find ways to take advantage of these knowledge-based assets that we create and use them to be able to raise funds,” Brassell said.

“I’m pretty confident that one day all loans are going to look at these intangibles and this intellectual property; they’re going to have to,” Brassell added.

He argued that it all comes down to being able to say that intellectual property has real value because it’s really what drives business growth.