SE Asian Nation Brand values

In December Brand Finance published its Nation Brands 2020 ranking, which measures countries' national branding. The report and rankings explain how a country positions and promotes itself, calculating the value of its Nation Brand. 100 countries are covered.  Broadly the data matches economic heft, but many countries punch above their economic weight where they have soft power.  Brand Finance use 7 factors - business / trade; governance; international relations; culture / heritage; media / communications; education / science; and people / values.  A Nation brand translates into: more investment, stronger human talent, exports of goods and services from the country and tourism. Of course 2020 noted a huge negative value drop for most Nation brands due to the pandemic; almost everywhere. 

In SE Asia most countries’ Nation brands were relatively static as would be expected. Several fell more – Malaysia and Philippines - due to local factors reducing their attractiveness. The star was Vietnam which bucked the worldwide trend. Its Nation Brand rose in value by a huge 29% taking the country up a 9 places. This is explained by the shift in manufacturing from China driving growth, opportunity and attractiveness. 

The ranking of the values of SE Asia's Nation brands are as follows: 

17 Indonesia – down 2 places 

27 SG – same as 2019

28 TH  same as 2019

29 MY  down 6 places

31 PH  down 6 places

33 VN  up 9 places

69 MN down 1 place

99 KH up 1 place

A separate analysis by Brand Finance measures the pure brand strength, combined with the Global Soft Power Index; in effect this reduces the impact of economic size. This year that top 10 includes Singapore which of course punches well above its economic weight in soft power. 

This shows the impact of brands, and is a lesson for businesses trying to build brands and for governments trying to encourage and incentivize IP owning companies. Brand investment creates soft power which leads to  greater economic opportunities. This works for SMEs, MNCs and even countries. 

RCEP Trade deal signed - a new standard for IP in Asia Pac?

Sunday's announcement by 15 Asia-Pacific countries of the signing of the Regional Comprehensive Economic Partnership (RCEP) was heralded as the creation of the world’s largest trade bloc. The parties are the 10 ASEAN countries along with China, Japan, South Korea, Australia and New Zealand.

The treaty contains a comprehensive 44 page IP chapter. Large parts of it repeat global norms that are set out in TRIPS. After all, bringing Laos and Myanmar up to Australia's and Japan's IP levels requires setting out all the basic norms. There are transitional provisions and different timelines for least developed countries. RCEP will take effect after 6 countries ratify it. Over the coming years changes will start to appear in domestic IP laws, regulations and practice.

Different trade sectors will have different views on the value of the IP provisions in Chapter 11. Setting out a common standard for GI protection may go some way to resolving the tug of war in Asia between the US and Europe.  Every country will now have to include experimental patent use allowances (Bolar provisions). There are special rules on textile designs, as well as a set of provisions on Genetic Resources, Traditional Knowledge, and Folklore. A common standard for Unfair competition may help countries who have weaker laws in this area.

The enforcement provisions are extensive. Many are similar to TRIPs, and the introductory provisions requiring effective protection without additional specifics, don’t advance the subjective view of enforcement obligations taken by different countries. Countries with few criminal cases for commercial piracy and counterfeiting though could find themselves in breach. Attorneys will be pleased that legal fees are to be awarded in civil IP cases.

Overall the RCEP IP provisions are not especially advanced. There are definitely some minor changes that many countries will need to make, some very welcome. It isn't as sophisticated as the CPTPP, or EU FTAs. However it is the first attempt to set common standards across Asia. 

Coronavirus impact on SE Asian IP offices

(31 March 2020) Below are the latest updates on IP offices operations and functions in SE Asia:




Philippines
Metro Manila is under a quarantine and night time curfew from 15 March 2020 to 14 April 2020. The Intellectual Property Office of the Philippines (IPOPHL) has adopted a work from home arrangement and has cancelled all hearings and meetings from 16 March 2020 until 14 April 2020. A skeleton workforce will maintain delivery of services. New IP applications can be filed online. All other action, from responses to official actions or declarations, and other documents or extension requests and appeals falling due during the lockdown period can be filed on 15 April 2020; that will be considered the due date. All payments due during the lockdown period must be paid on 15 April 2020.

Indonesia
Jakarta has a mix of home working with some offices functioning. The government has ceased public functions. The IPO has announced they are closing all service counters but online filings can still be made. There will be dispensations for delay in completing formalities. Their Livechat is operating but not the call centre. Appeal deadlines will be extended to 21 April 2020

Thailand
The Department of Intellectual Property of Thailand (DIP) has been operating as normal.  Schools and entertainment venues are closed and the Songkran new year festival will not be held. The government as announced a one month emergency starting 26 March, with further details to follow.  

Malaysia
The Malaysian Government has a national Restriction of Movement Order in effect from 18-31 March 2020, which has now been extended to 14th April. Government and businesses remain closed except for essential services. The Malaysian IP office (MYIPO) is closed too. Online filing still operates as normal for IP applications.

Singapore
Singapore has limited international travel to the city state. IPOS’ online portal, IP2SG, is operating for IP searches, filings and any other transactions.  Email is encouraged to contact IPOS, and visits are limited with prior clearance required. 

Vietnam
From 1 April 2020, all communications between IP Vietnam and applicants are to be conducted via post or the online filing system until further notice. All deadlines from 30 March 2020 to 30 April 2020 will be automatically extended to 30 May 2020. for other situations IP Vietnam says that applicants may request the application of Force Majeure if needed. 

Cambodia
The Department of IP Rights (DIPR) of Cambodia still operates, but all officials are encouraged to work from home.  Any communication should be via phone calls. No face-to-face meeting is allowed with any examiners until further notice. New TM filings and responses to refusal are expected to be submitted online. 

New WIPO director general from SE Asia

The Coordination Committee of the World Intellectual Property Organization (WIPO) has nominated Mr. Daren Tang from Singapore for the post of Director General to succeed Francis Gurry. The WIPO General Assembly will meet in an extraordinary session on May 7-8, 2020, to confirm the nomination. Mr Tang is currently the CEO of IPOS, Singapore's IP office. This is great news for SE Asia, to have one of its own as the worlds top IP official. 

China and SEA IP market sizes

China's growth in IP filings is well known - it runs in millions each year now. Within this there is a well known problem of junk patents (designs and utility models which are not novel) and bad faith trademark squatters, as well as now, high volume hoarders - which made trademark filing volumes swell in recent years. But even despite that the numbers in China are staggering.

As the table from WIPO data shows though, China continues to accelerate away from ASEAN. Over the last 5 years its IP filings doubled, while ASEAN's increased 60% over the same period. The low base in ASEAN perhaps ought to have allowed it to increase faster. As set out above, some of China's filings (possibly up to half are poor quality), but even then, the volumes are still far ahead of the SE Asia region.

Brand Values in SEA

Brand Finance has issued its annual Brand Valuation survey. Every year this improves and gets more detailed. 

However SEA brands are still underrepresented. 8 SEA brands appear in the top 500 500 (1%), from a region representing nearly 9% of the world's population and 4% of global GDP. 

The most valuable SEA brands are the following. 3 Singaporean banks, DBS (202), OCBC (364) and UOB (363), Thailand’s PTT (359), an energy & chemicals conglomerate, Indonesian telco Telkom (442), Vietnamese telco Viettel Telcom (478), and from Malaysia Maybank (494) and Petronas (127), an energy company. 

The dominance of banks, telcos and oil & gas is illustrative of less developed economies. The major IP leaders in the industrial sectors such as Thailand’s SCC or in the consumer goods sector such as Indonesia’s Indomie or San Miguel or the Philippines, or Lazarda in ecommerce, do not feature yet.

The Vietnam-EU FTA

2019 should see the Vietnam Europe Free Trade Agreement come into effect. The final text was agreed and the EC Commission approved then it was sent to the EU council for signature (during which time each Member State reviews it) and finally it will be submitted to the European Parliament for adoption probably by mid 2019.  The EU Singapore FTA is slightly more advanced and due to adoption in early 2019 too.

The Agreement contains a so called TRIPs+ IP chapter. That means the provisions go beyond the WTO TRIPS agreements. Whilst this is sometimes criticized as being to much for developing countries to bear (e.g. in enforcement), in many cases it provides more useful detail on existing TRIPS obligations.

Key provisions include the following:

a. A large number of provisions mirror TRIPS, restating obligations sometimes with a little more detail. In other cases, it covers areas where TRIPS is silent (such as freedom to choose parallel import regimes)
b. Performers, phonogram/sound recording and broadcast copyright is strengthened. Vietnam's own music industry will welcome this.
c. Anti circumvention and rights management provisions are included. This is intended to prevent music and film piracy.
d. Artists' resale rights are provided.
e. Trademark non-use is extended to 5 years 
f. Extensive GI provisions are set out. Vietnam is a relatively active proponent of GI protection and registers many GIs. A large scale reciprocal registration system will occur under the FTA. there are transitional provisions for certain contentious GIs like Feta and Champagne.
g. Designs provisions require Vietnam to join the Hague Agreement (generally felt to be helpful in SEA by reducing cost) and allows dual copyright protection for designs.
h. Patent term extensions where marketing delays occur are permitted (a provision that access to medicines advocates dislike).
j. Regulatory test data protection is required (again disapproved by access to medicines advocates), to protect innovator test data submitted in the marketing approval process. (Technically TRIPS intended to cover this but its provisions never worked.)
k. Extensive provisions to improve civil IP litigation are included. these are likely to be helpful in an emerging IP system such as Vietnam's where court system weakness is often cited as a problem. Important additional remedies include right to information, proper damages, legal costs and published decisions.
l. Clearer internet ISP liability, injunction and safe harbour provisions should improve online enforcement - often cited as a concern.
m. Border enforcement improvements are mandated. In fact Vietnam has a functioning IP border protection system, its problems are more a scale problem due to proximity to China (especially the problematic northern land border).

Whilst criminal provisions are not covered (as criminal provisions are not harmonized in the EU), the parties are required to follow TRIPS.  there are also an array of cooperation and technical assistance mechanisms which will likely lead to the EU spending a great deal of time and resources working with Vietnam to improve its IP system from 2020 on.

New IP treaties in the works will matter for SE Asia

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), (formerly the Trans-Pacific Partnership (TPP) before Trump pulled the US out) will come into force in 2019. The 11 state deal includes 4 ASEAN countries Singapore, Brunei, Malaysia and Vietnam as well as 7 other Asia-Pacific countries - Australia, Canada, Chile, Japan, Mexico, New Zealand and Peru. With China and Japan that makes this deal over 15% of world trade and CPTPP the third largest free trade area in the world after NAFTA and the EU. Singapore and Vietnam ratified earlier in 2018. Both will need to make legislative amendments (Singapore has already begun that). 

The IP Chapter has the most comprehensive IP standards of any FTA and includes extra jurisdictional provisions on theft of IP by corporations operating abroad. It also has what are known as TRIPS Plus provisions. These include relating to subject matter patentability scope, patent term extensions for regulated products, data exclusivity (esp. for pharma and agrochem products), patent linkages (to regulatory approvals), and more robust enforcement measures (which in general TRIPS has failed to achieve).

Another trade deal is the Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between the ten ASEAN members and six which have existing FTAs with ASEAN including Australia, China, India, Japan, South Korea and New Zealand. This will ultimately comprise 40% of world trade so will become the biggest FTA yet. Negotiations are close to a final agreement. 

RCEP has a comprehensive IP chapter and in general is expected to seek to achieve similar standard to the CPTPP in many of the areas described above. The arguments over the extent of patenting, access to medicine made in countries that signed the CCPTPP are now playing out in the remaining countries looking at the RECP.

A major concern is that RCEP is driven by China and countries that are looking at whether to join, such as Thailand, worry that it may threaten their US relations.

Paris Agreement negotiations and IP

A UN meeting in Bangkok this week seeks to hammer out rules for the Paris Agreement on Climate Change. The so called Rulebook for the Paris Agreement must be negotiated this year, to reduce global warming. The contentious issue of funding for projects to achieve the Paris Agreement‘s target reduction in global temperatures are the main sticking point. There have already been ructions at the Green Climate Fund following Trump’s US withdrawal and the consequent loss of US funding. 

What has this go to do with IP? Well the principle means of achieving the Paris Conventions goals is the development and deployment of many new technologies to reduce environmental harm. Secondly countries and companies will need to measure their impact, through use of environmental technologies and eco-brands. 

For SE Asia this is critical, given their developmental positions. As fast industrializing nations and therefore major polluters SE Asian countries will need to develop, license in and/or seek funding for the advances which will achieve the Paris Agreement goals. The global IP ecosystem will need to help support and measure this.

Korean copies in SE Asia

All things Korean from K Pop to hairstyles to luxury Amore Pacific and LG Household beauty products are in vogue across Asia and beyond. This is leading to a new type of copycats. Fake fragrances are sold in fake stores (see photo) around the region. Dozens of such shops have appeared in Vietnam recently. Mumuso is a Shanghai based retailer of Korean style goods. Its stores use Korean script, staff costumes and music. The allegation is that it sells Chinese sourced fake Korean goods. It is rapidly expanding and now the Shanghai company is opening in Australia.  And  even it is being copied across Asia, with numerous copy retail trademark  registrations for Mumuso appearing in other Asian trademark registries. But there is no original Mumuso brand in Korea!

Korean government agencies such as the Korea Trade-Investment Promotion Agency and the Korea Creative Content Agency are very concerned. They are encouraging Korean firms to take action to stop the sale of copies of their goods and the issue has also been raised with the Blue House (the President’s office in Seoul).  The Korean IP communities is in heated discussion on how to protect the “Korean Wave” (a.k.a. Hallyu) as Korean’s own national IP.

Innovation benchmarks in SE Asia

The Global Innovation Index, annual research from Cornell University, INSEAD and WIPO on innovation in economies is positive for Asia in 2018. The research measures 80 factors that lead to ability to innovate new technologies and put them to use. Factors include high-tech imports, quality of technical publications, R&D expenditure, overseas investment, numbers of scientific researchers, educational enrolment and numbers of patents and trademarks.

SEA is showing one of the biggest improvements this year. Singapore sits in 5th place, as one of world's most innovative states. Thailand one of the big movers this year now sits in 44th; with Vietnam in 45th. Malaysia is in 35th place. ASEAN policies, local policy improvement and greater economic dynamism are cited as the reasons. Philippines at 73rd and Indonesia at 85th lag behind.