Shoes by Singapore-owned brand Masai Barefoot Technologies (MBT) are a big hit, thanks to an unusual curved design said to help body posture.
They are so popular that every day, on average, five pairs of cut-price counterfeit MBT shoes arrive on Germany's shores from unlicensed factories in China and Indonesia. Such intellectual property (IP) infringements have led Mr Andy Chaw, chief executive of Masai Group International, which owns the brand, to step up the firm's IP protection efforts.
Now, Masai will be able to fund these efforts through a loan collateralising the IP it owns.
In 2012, Mr Chaw bought bankrupt Swiss firm Masai Group International.
This week, DBS Bank approved the first-ever so-called IP-backed loan here to Masai, under the IP Financing Scheme.
The scheme by the Intellectual Property Office of Singapore (Ipos) aims to help companies incorporated here tap patents they have been granted as collateral for loans for growth and expansion, which do not have to be IP-related. Ipos underwrites a portion of the default risk with the bank - and the bank will not own the company's patents if it defaults.
Around 25 per cent of Masai's seven-figure loan, approved after taking account of the valuation of its patents, will go into IP protection efforts. "It is a constant battle trying to defend our IP rights," said Mr Chaw.
The firm appointed brand protection company Pointer to sniff out and shut down websites selling counterfeit MBT products in January last year.
Every month, about 250 such websites are closed down. Mr Chaw is also looking into engaging investigators to "go after the factories that produce counterfeits directly".
Another 50 per cent of Masai's loan has been earmarked for research and development (R&D), and 15 per cent will be used on advertising to continue to build the brand, which is trademarked. The company will use the remaining 10 per cent for administrative fees involved in IP registration.
"We'll use the funds to protect and strengthen our IP by continuing to invest in R&D and filing new patents, which will drive growth," said Mr Chaw.
"We expect a 25 per cent growth in sales for MBT shoes annually, for the next three years, thanks to a new patent and new styles."
Two months back, the company launched a line of MBT shoes in the United States featuring new patented technology and more than 75 per cent of the goods have already been sold. "A Singapore company was able to come up with a new range of shoes and get great response from the US market because of its constant investment in R&D and IP," Mr Chaw added.
Ms Joyce Tee, DBS' group head of small and medium enterprise banking, said: "The patents acquired would essentially translate into future earnings.
"We want to help Masai Group monetise their intangible assets."
Ipos chief executive Daren Tang noted that "IP is not just about protection of legal rights; it is about using it to grow the business".
Ipos is increasing the range of IP asset classes available for collateralisation beyond granted patents, to include trademark and copyright, effective July 1. Creative industries including film and music are expected to benefit.
The scheme will also be extended for two years, to March 31, 2018.
