Patent linkages in SE Asia

Patent linkages allow the connection of marketing approvals (MA) for generic pharma products to the patents covering an innovator company’s original/reference drug. Their purpose is to ensure that MAs are not given to patented products; and to allow generic makers to plan their launches without infringement risk, and also to invalidate weak patents.  It also allows the innovator company to take action for infringement of relevant patent(s) to prevent MAs issuing to generic products too. In some countries, innovator company must list relevant patents so a generic company knows which patents cover the original/reference drug. Encouragement for generic pharma companies to seek MAs is sometimes provided by giving a period of market exclusivity to a generic company who invalidates a blocking patent.  

In SE Asia only Singapore has a patent linkage system in place now. For the MA, the generic applicant must file a declaration stating whether its product infringes any relevant patents.  This is a self declaration system, whereby it is up to the applicant to ensure there is no infringement. The generic applicant may also be required to notify the patentee of its MA application. The innovator company is entitled to take action for infringement, which stops the MA process until the patent issues have been decided.

Under the CPTPP treaty Malaysia and Vietnam will have to implement a patent linkage system, and possibly Singapore may amend theirs. The CPTPP requires for the MA, prior notice to the patent holder and a period for the patent holder to take legal action if needed. Unsurprisingly given the CPTPP's roots, this is a system based on the US one, which in essence allows the patent owner to intervene to prevent the MA issuing, and avoids the risk of infringing products getting to market (and leading to expensive litigation). The CPTPP however also allows alternative systems that make the MA dependent on non- infringement (Singapore's current approach). 

Vietnam’s Ministry of Science and Technology is circulating a draft outline of the amendments to their IP Law. The draft outline mentions a new Article on patent linkage. However the specific provisions have not yet been drafted.

The discrepancy in the approaches reflects a worldwide debate on the scope of patent linkages. Should they be preventative like the US or informational like Singapore. The EU has no patent linkage rules and only some national laws require an informational type approach to MAs. 

The other major regional IP treaty in Asia is the RCEP which is driven by China. That has no patent linkage provisions in the IP chapter.  All ASEAN countries are planning to join this. It will be interesting to see how 3 of the 10 ASEAN countries fare with patent linkages while the other 7 do not have them.

Vietnam Korea PPH trial

Vietnam and Korea started a Patent Prosecution Highway (PPH) pilot program on 1 June 2019. Its not a full but trial system, aimed to last for 2 years and limited to only 100 PPH requests per annum. The request is free and filed with on or prior to requesting substantive examination. The time period for examination will then be shortened. The benefit is for Korean applicants who can now easily conform their Vietnam patent with the KIPO grant.  The applicant can make amendments to conform during examination phase to achieve this.  Given that Koreans file many patents in Vietnam, demand will outstrip the 100 available requests.

More details can be found here https://www.rouse.com/magazine/news/patent-prosecution-highway-pilot-programme-officially-implemented-between-kipo-and-ip-vietnam/

New IP law amendments and counterfeiting report in Vietnam

Its been a busy week in Vietnam’s IP world. The International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy initiative (BASCAP) is a business driven program focused on stopping counterfeiting. It has released its first report on IP in Vietnam. Focusing on the prevalence of fake and pirated goods, the report identifies a series of problems that cause the widespread proliferation of fakes in Vietnam. They cite a large grey economy, corruption; weak enforcement systems and poor consumer awareness.  They report cites some recent developments but adds that more needs to be done. Their recommendations include:

• Better enforcement systems
• Legislative reform
• Use of international technical assistance
• The need for more capacity building in IP institutions

Vietnam's IPO is broadly supportive of the report. Progress has been made and there is more to do. they said at BASCAPS's report launch. 

In a separate step Vietnam’s Ministry of Industry and Trade has recently released amendments to the IP laws to comply with the CPTPP (see here for background). Among the amendments are:

1. Patent Novelty destroying disclosure exceptions are narrowed.

2. Trademark License recordal will no longer be compulsory

3. Legal Fees are limited in scope in Vietnam, but now, where a case is lost when a Court finds no infringement, the winner may claim losing appropriate lawyers’ fees.

The draft law has been submitted to the National Assembly for their review and adoption.

Vietnam and technology investment

Vietnam continues to be a country of interest to technology owners in Asia; as the BBC reported this week start ups are increasing and the investment shift from China to Vietnam bodes well for economic growth.

A look at the patent filings there tells the story of growth with heavy Asian interest.  Patent filings in 2015 topped 5000 for the first time. Applications have been averaging 7% growth a year for the last 5 years. Japan files by far the most patents – in 2015 over a quarter of all the patents filed in Vietnam. The US was second, then Korea third. With China and Taiwan in the top 10 filers however, it is clear that Vietnam is a major market first and foremost for Asian technology companies.

Around 12% of the patents filed each year are by local applicants.  That is consistent with other emerging SEA countries.  A lack of support for local start ups, private R&D and technology business is typically blamed across the region.

The biggest technology areas are: pharma and chemistry, with the breakdown looking like this:

 

Vietnam - Japan PPH

Vietnam's National Office of Intellectual Property (NOIP) has entered into its first Patent Prosecution Highway (PPH) agreement with the Japanese Patent Office (JPO) this year. The PPH will start in April 2016 and means that applicants with a corresponding Japan patent may speed up examination in Vietnam. Initially there will be a trial of 100 patents to test it out.

There are already 2 accelerated examination systems operating, but they have not been widely used. There is an existing process to request faster examination, based on another patent office's prior examination, but this is dependant on the NOPs discretion and interest to speed a particular patent up. Then there is the SE Asian ASPEC system, but so far this has worked only really with corresponding Singapore patents. Hopefully the Japanese PPH will improve the position. Patent endency at present runs to 6 years.

Women and patents in SE Asia

March 8th celebrates International Women's Day. But interesting data analysis from Vietnam shows how few women participate in the development of technology in society.  Women make up over 40 % of scientific researchers in Vietnam, which is far higher than elsewhere in the SE Asian region. This is a function of its focus on equality in education and a focus on and science in the last 30 years.  

However, when it comes to outputs there is a different picture. Of 1,134 Vietnamese individual patent applications from 2008-12 less than 9 percent were from women. This represents a huge underperformance, partly due to women taking fewer science and technology leadership roles. This is markedly worse than the global deficit in women's patent output but probably not unusual in SE Asia. International recognition of the benefits and advantages women bring to R&D and innovation is now widely recognized.  If countries could harness this, a huge step forward in knowledge economies would be possible.

WIPO automation systems adoption in SE Asia

 
Indonesia's automation program for its IP office continues. The adoption of WIPO's IPAS software is going ahead. IPAS is designed for smaller IP offices to help the automation of trademark, designs and patent processes. WIPO also provides an e-filing software system for small to medium sized IP offices and Indonesia has been selected to be the test offices for e-filing for trademarks, designs and patents.

Elsewhere in S.E. Asia, the WIPO CASE system is being adopted. CASE is a platform to provide search and examination data for patent offices to share. Singapore, Malaysia and Vietnam are already using it and WIPO hopes to provide the system to all ASEAN offices in future.

Weak R&D in Vietnam

A report by Vietnam's Ministry of Science and Technology (MST) helps to show why innovation levels are so low - as IP Komodo has reported by the paucity of Vietnamese patent filings globally - see here.
 
MST says that about 2,000 organizations in Vietnam have R&D activities; in 2011 Vietnam had 134,780 R&D workers. Many are support staff with only 105,230 doing scientific research; half at universities where most are also lecturers. As such the real numbers on full time research are much lower at 67,223 - that is a ratio of 0.0007 per million people; a fraction of the 4,650 in the US (in 2007), 936 in China (2011), 5,451 in South Korea (2010), Singapore 6,307 (2010) and Malaysia 1,643 (2011).

Vietnam also spends less on R&D. Vietnam’s GERD (Gross domestic expenditure on research and development) was USD $0.25 billion - a ratio of expenditure on GDP of 0.21 percent. Again a fraction of the US - 2.77 percent in 2011 and China - 1.84 percent in 2011.

Patent filings do indeed appear to reflect reality.

Patent pendency in emerging South East Asia

Patent pendency can be a concern when delays become lengthy. Applicants in many fields hope never to have to enforce or litigate their patents so may not worry too much in smaller markets about pendency. But as more competition appears, the ASEAN emerging markets become more important so an ever pending application becomes more worrying. This region is now in the position of needing faster grants. Are the systems sometimes too slow? Or are applicants themselves to blame?

Thailand famous for having delays of well over 10 years especially for pharma and complex chemical patents. New patent examination guidelines are coming in to speed matters up. The issue has been raised in trade talks with the EU as it has been suggested that there is a political reason for delays namely it enables generics to supply the market.

The Philippines is faster at 3 to 5 years. It used to be slower but some recent applications have been granted in 3 years. Medical sciences/biotechnology patents tend to take longer to issue than others.

In Indonesia patent applications filed through PCT take less than 5 years from the filing date. Most office actions can be overcome by bringing the Indonesian application into conformity with an overseas granted patent. Convention patents usually take longer i.e. over 5 years, since the examiners need to conduct an independent examination. As elsewhere, examination of pharma/chemical/biotech inventions can take the longest.

In Vietnam pendency is fast at 2-3 years. Convention applications may take longer as publication is delayed until the 19th month from priority date, whereas PCT national phase applications are published automatically within 2 months. Similarly, pharmaceutical and biotech patents take longer.

In Cambodia and Laos grant takes 4-6 years but as there is no substantive examination in both these countries, the applicant must provide the IPOs with successful examination reports for equivalent applications filed in other countries. So the patent office has less control over timing.

One critical issue to consider is the statutory time for filing a request for examination. In Thailand for example you are entitled to file a request within 5 years after publication date, while in Malaysia it is 2 years only. Some patentees wait longer before they file for examination, so they contribute to the high pendency rate. Therefore it is not always the patent offices’ fault.