SE Asia landmark IP mediation

WIPO and Singapore's IP office (IPOS) launched a special IP mediation service earlier this year, called the Enhanced Mediation Promotion Scheme (EMPS). A development of a previous mediation service,  it is intended to be low and subsidized cost, efficient and crucially, to cover non Singapore IP disputes. 

A dispute between US bone conducting headphones company Aftershokx and a Thai trader called Suravit Kongmebhol was conducted through the EMPS recently. The dispute was a trademark conflict between the US company’s trademark rights and Kongmebhol’s registrations in six SE Asian countries.  

After a mediator was agreed the parties had several days of mediation, then reached a resolution. WIPO and IPOS have stressed the low mediation cost (due to its subsidy), the lack of wasted legal fees, and avoiding years of litigation delay (in six countries).  It was also unique in replacing multiple national proceedings. The exact settlement was not disclosed, but positive press coverage suggests it could be a useful system for other regional IP disputes. 

An ASEAN regional Trademarks office proposal revives

The idea of creating regional ASEAN IP offices has been floated before; principally in the early 2000s. There was talk of a separate regional patent, designs and trademarks offices based perhaps in Singapore, Thailand and the Philippines. But insufficient support in other large countries, like Indonesia and Vietnam, combined with a solution for international filing offered by Madrid adoption scuppered those plans.

The 2016-25 ASEAN IP Action plan has put the idea back on the region’s agenda. The regional IP practitioner’s group, the ASEAN IP Association, has been looking again at regional trademark harmonisation. The EU’s Arise+ IP project is considering a feasibility study for ASEAN (given the success of the EUIPO). They will consider aspects such as legal infrastructure, operational set-up, fee structures, stakeholder interests, and the impact on national trademark systems.  ASEAN Member States held a meeting in Bangkok several months ago at which it was discussed. A concern to be addressed is potentially reduced cost and administration compared to as now, filing trademarks separately in each of 10 ASEAN Member States.

The trade in fakes from and through SE Asia

The publication of the OECD/EUIPO updated report Trends in Trade in Counterfeit and Pirated Goods provides more data and corroboration on the role of SE Asia in the global fakes trade.

 

Of course China dominates as the global source, including transited goods through Hong Kong. But the report identifies other SE Asian countries too. Malaysia, Thailand, and Vietnam are all small but important producers in many goods sectors. Singapore features as a source as a result of transhipment of fakes through its port.  The global fakes trade is valued at half a billion Euros and growing. Footwear and clothing are the largest volumes of fake goods seized, but the usual range of products from consumer and household to pharma remain common, as well as IP-infringing packaging and labels.

 

Places with weak governance attract counterfeiting. This includes bot  countries with large grey economies, and specifically Free Trade Zones. The boom in internet orders and small parcel deliveries by post or courier services is now dominating seizures. For customs and IP owners this means more work for less volumes.  Weak port systems (lack of shipment information transparency, no advance clearance systems etc) encourages the fakes trade.

 

The authors also note a change to the rights owners affected with an increasing spread to companies from all countries. In SE Asia they identify a number of Singapore IP owners as facing fake goods problems.

 

 

 

 

 

 

SE Asia Inc's IP ownership remains limited

A report in the Asia Times based on recent WIPO research on innovation in SE Asia underlines how much countries still need to do. to drive up industrial IP creation.  A 40% rise in patent applications over the last 3 years is not bringing with it the research and innovation that it implies.

Here is how the main SE Asian economies ranked in the top IP filers:

Singapore (29), Vietnam (31), Thailand (33), Malaysia (39), the Philippines (47), Indonesia (53). 

When you drill into the detail you find that Indonesia, Vietnam and Thailand are biased towards trademarks, not patents. Indonesia lags at 112th in the world in patents.

When mapped against world class companies, it also becomes obvious that few SE Asian companies are major IP owners. Some leading brands from the region are Indonesia's largest bank BCA, the Shangri La and Banyan Tree hotel groups from Singapore and the Thai Union seafood group.

On the technology side patents are dominated by relatively basic technologies like agricultural, chemistry and medical science and very little IT and biotech.

IP is only a proxy for innovation; but what is clear is the region is not yet producing enough.

 

Counterfeits from China to SE Asia

The UK government last week released a report on the issue of counterfeiting between China and South East Asia and how it impacts UK companies. The report from the UK Intellectual Property Office (UK IPO) and the Foreign and Commonwealth Office with with UK IP firm Rouse, studied trade routes, ports, land borders, transshipment (through Hong Kong and Singapore) and Chinese and SE Asian government approaches to the problem. Interviews with companies and associations were conducted.

The big picture is that counterfeiting is a developmental issue, a small part of a wider problem of weak legal systems, widespread illicit business practices such as smuggling and corruption and poor quality business operation in emerging markets.

Specific concerns over the Myanmar and Vietnam borders with China were covered, along with the lack of working IP border protections system in SE Asia. China is putting huge resources into anti counterfeiting but “the scale of the problem is not diminishing despite the Chinese government’s efforts”. One conclusion is that the ASEAN and the AEC will need to address the issue, because the flow of counterfeit goods from China causes widespread damage to SE Asian economies.  
 

Trademarks data in ASEAN

The following data on trademark applications has been provided to the ASEAN secretariat by various SE Asian IP offices. NR percentages means Non-Resident i.e. foreign filings.

		2010	2011	2012
Indonesia	Multi class	53,196 (5% NR)	53,106 (NR = 5%)	62,455
Thailand	Single class	37,656 (NR = 34%)	38,950 (NR = 40%)	44,963
Philippines	Multi class	16,838 (NR = 47%)	18,611 (NR 43%)	20,202
Singapore	Multi class	30,481 (NR = 79%)	34,928 (NR = 81%)	36,401 (NR = 82%)
Vietnam	Multi class	28,237 (NR = 24%)	28,237 (NR = 21%)	29,578 (NR = 23% )
Malaysia	Single class	26,370 (NR = (50%)	26,833 (NR = 60%)

Trademark statistics are notoriously hard to interpret and compare. Some countries have multi class applications - like Philippines and Singapore. So naturally their count will be lower than the single class markets like Thailand. And it depends how the data is counted in each case too.  So the numbers are not very useful for comparison.
 

A few facts can be gleaned. Local Indonesian applicants file vast numbers of marks. Data from Indonesia's IPO is however notoriously unreliable and the IPO's count of foreign applicants is certainly far below the real number. However relatively low levels of FDI in the non resources part of the economy probably does equate to fewer foreign filings than in other countries (however not to the degree this data suggests).   

In general one can see an upwards trend everywhere. In addition another general trend suggested is that the more open the economy (Singapore, Malaysia), the higher the foreign filings. The more closed, or not yet attractive to consumer-focused foreign investors (Vietnam, Indonesia), the fewer the foreign filings appear to be.