Most Common Intellectual Property Rights Problems: Focus On South – East Asia

Intellectual Property (IP) protection is an essential strategy for securing a return on investment in innovation, offering IP owners a competitive edge. SMEs invest a huge amount of time, energy, and money related to endeavors in R&D and marketing, yet frequently neglect that, in most countries, the only way to enjoy exclusive rights over their creative efforts and their business identity (trademark) is through IP registration.[1]

A wide range of foreign industries are now looking towards Southeast Asia, not just to take advantage of an abundance of cheap labor for the production of goods for export, but also to tap into new consumer markets formed from a growing middle-class population. But the less developed nature of business-related legislation means the dangers of intellectual property (IP) infringement are often great.[2]

All the different types of IP share a common characteristic – they are creations of the mind and feature unique and distinguishing characteristics that differentiate them from other IPs. In the business world, this uniqueness is monetarily profitable. IP is an important strategic asset for the business. Due to the territorial nature of IPR, enforcement without registrations in advance in the countries of interest is generally not possible. Most countries, including the European Union (“EU”) Member States and partners in South-East Asia, have accepted and adopted the same international treaties and agreements relating to IP, and hence IP such as trademarks, invention patents, utility patents, industrial designs, copyrights are recognized and protected.

South-East Asia has become an increasingly popular destination for the European Small & Medium-sized Enterprises (SMEs) as the rapid economic development in the region has created many promising business opportunities for European SMEs. The International Property Rights Index (IPRI) 2017 performance reflects the strength of the country’s patent and trademark frameworks and the measures for tackling counterfeiting and copyright piracy. Singapore has consistently maintained its highest IPRI overall performance in the year 2016-2017. Despite the slight increase in IPRI performance in the year 2016-2017 for Indonesia, but in Thailand and the Philippines, the IP protections remain stagnant. Despite the slight decrease in IPRI performance in the year 2016-2017, Malaysia still ranks higher than the other three countries and is placed second following Singapore.

Innovation and IP escalation exercises are progressively at the core of Asia’s financial development plan. Asian economies are putting more into Research and Development (R&D) and Asian partnerships are seeing more grounded valuations of their intangible assets, including brands and technologies. These creative organizations have depended on a powerful IP framework for their ventures and this is important as Asia’s economies keep on developing. IP provides the necessary framework and incentives to ensure the constant generation of new ideas.

IPR Enforcement in South East Asia

Particularly, the development of IP laws across South-East Asia has been uneven and IP laws in many South-East Asian countries are still being developed and revised to be in alignment with international standards.

The table below provides a summary of the status of accession of South-East Asian countries to key international IP Treaties and Agreements in relation to the ten countries of the ASEAN Economic Community.

Country Accession to Bern Convention Accession to Paris Convention Accession to TRIPS
Brunei YES YES YES
Cambodia NO YES YES
Indonesia YES YES YES
Laos YES YES YES
Malaysia YES YES YES
Myanmar NO NO YES
Philippines YES YES YES
Singapore YES YES YES
Thailand YES YES YES
Vietnam YES YES YES

Unlike the EU, which has a unified instrument directing IPR enforcement, South-East Asian countries do not yet share the same level of cooperation, resulting in comparatively fragmented IPR enforcement laws and regulations. Implementation of IPR laws across South-East Asian countries varies from one another. This is mostly due to the diversity of culture, history, and laws in the region. The Association of South-East Asian Nations (“ASEAN”) however has established the ASEAN Working Group on Intellectual Property Cooperation (AWGIPC) which aims to align and streamline IP rights and practices across the region, and more changes should be expected from this collaboration.

Taking note that the South-East Asia region is a strong global manufacturing hub and a dynamic growing purchaser market, it is not unusual for companies to encounter locally or regionally produced counterfeit goods which affect the IP owner’s ability to derive proprietary benefits. Counterfeit cases are typically reported by the IP owner’s own sales channels, market study reports, e-commerce, and now even more increasingly, social media accounts, and reports by IP owner’s customers.

So, we see stopping the production of counterfeit goods as one of the major challenges in South-East Asia.

International Property Rights Index (IPRI) below in the table shows the ranking of South-East Asian Countries regarding the strong intellectual property rights regime.

COUNTRY RANK
Singapore 7
Malaysia 32
Philippines 64
Thailand 66
Indonesia 68

In 2017, the IPRI scores reveal a general improvement in all countries except Malaysia. Singapore has increased its IPR score from 7.96 in the year 2016 to 8.1 in the year 2017. Malaysia’s overall score has also decreased from 6.75 in the year 2016 to 6.6 in the year 2017.

Despite this decrease, Malaysian officials have augmented their resources to combat online piracy and have sustained their efforts to deny access to piracy websites, taking down infringing content on domestic sites, and conducting raids and arrests of Malaysians either operating or posting links to sites with pirated content.

Threats and Challenges

Threats and challenges to IP protection and enforcement in ASEAN countries, in general, include patent and trademark counterfeiting and copyright piracy. These threats cause significant financial losses for right holders and legitimate businesses.

IP infringement can also pose risks to the general public: inferior, counterfeit food and medicines, for example, can present health risks to consumers.

In addition, IP infringing activities can also be a source of funding for organized criminal networks, and therefore present a wider threat to society.

There are multiple reports of weaknesses in the enforcement of IPR across ASEAN, demonstrated by the varied performance in the IPRI.

Now, let’s see the individual IPR regime of some of the South-East nations.

SINGAPORE

Singapore has been struggling with relatively high levels of illegal downloading. Singapore has developed some legal measures that provide necessary exclusive rights preventing infringement of copyrights and related rights (including Web hosting, streaming, and linking) and availability of frameworks that promote cooperative action against online piracy. This has led to an amendment to the Copyright Act, which provides rights holders with an avenue to apply directly to the High Court for an injunction “requiring the network service provider to take reasonable steps to disable access to the infringing online location”. As the authority responsible for border enforcement of IP rights, Singapore Customs detains tens of thousands of counterfeit goods each year, including luxury bags, shoes, and other fashion items, toys, perfumes, mobile phones, and accessories.

Singapore had no intellectual property system of its own and it relied on the re-registration of intellectual property rights protected in the UK. It established a set of intellectual property laws between 1987 and 2000 comprising copyright, trademark, and design acts and an act protecting the layout-designs of integrated circuits. Different from other countries in the region, but perhaps typically for Singapore, the country has also managed to enforce the new rights effectively. Intellectual property law is now an important part of legal education and an IP Academy for research and training has been founded to assist with this task and to provide further training for the profession, the IP administration, and interested members of the public. Singapore has ambitious plans in a number of areas that require intellectual property protection, in particular in the field of biotechnology.

So, we see Counterfeit goods and Illegal downloading are major issues in Singapore related to the protection of Intellectual Property Rights.

Steps Taken

Intellectual Property Office of Singapore (IPOS) is proposing to bring together the government agencies and private sector to enable better IP commercialization outcomes.

IPOS has also started to expand by collaborating with institutes of higher learning. Their intention is to

• build a pipeline of IP experts with an understanding of the law, technology, and business, who can help companies unlock their intangible assets and get the right IP strategy in place;

• Change the general mindset towards IP – it is not just a legal right that should be enforced and respected, but also a business strategy; and

• Bring together financiers, IP professionals, lawyers, and other experts to create that flow in the innovation cycle.

MALAYSIA

Malaysia has some concerns on pharmaceutical-related patent enforcement and resolution mechanisms, patent term restoration for pharmaceutical products, regulatory data protection terms, and effective border measures. The legislation in Malaysia is also complete and largely TRIPS compliant. The intellectual property administration in the country has improved considerably since the IP Office has been incorporated as a body corporate and a statutory body in 2003. The new form of organization gives the Malaysian Intellectual Property Office (MyIPO) more freedom to regulate its own affairs with regards to its employees and the use of its funds, although the office remains under the directions and supervision of the Minister of Domestic Trade and Consumer Affairs. Problems remain in the enforcement sector and with the judiciary. Statistics show that the Malaysian courts are overloaded and backlogged. As in other countries of the region, discussions are underway to form a specialized intellectual property court to solve this problem. And while serious efforts have been made to improve the enforcement of intellectual property rights, Malaysia is still struggling with its reputation as the world’s most significant producer/exporter of pirated optical disk entertainment software.

We see the problem of Counterfeit goods and Online piracy, as was there in Singapore is also there in Malaysia, plus Malaysia is also facing the problem of export and production of the pirated disc. Though the author feels after the incorporation of a statutory body in Malaysia regarding the protection of IPR, things are moving in the right direction, though there is still a long way to go.

Steps Taken

Malaysia officials have invested in greater resources to combat online piracy. The Malaysian authorities are actively taking down IP infringing content and conducting raids and arrests of Malaysians either operating or posting links to sites with pirated content.

Malaysia has introduced IP enforcement coordination mechanisms and agreements to enhance interagency cooperation. In deterring and preventing networks that distribute counterfeit and infringing goods, the progress is shown by an interagency Special Anti-Piracy Task Force.

Malaysia has also developed specialized IP enforcement units, including the Special Internet Forensics Unit (SIFU) in Malaysia’s Ministry of Domestic Trade, Cooperatives, and Consumerism responsible for IP enforcement that has also been proven to be important catalysts in the fight against counterfeiting and piracy.

VIETNAM

Being a member of the World Trade Organization and World Intellectual Property Organization, Vietnam’s IP legislation covers most aspects of protection of IP in accordance with the international standards required by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). However, Vietnam’s IP enforcement mechanisms still need improvement, and awareness of the importance of IPR protection among Vietnamese consumers needs to be raised. Vietnam is a party to the Patent Cooperation Treaty (PCT) and the Madrid Agreement Concerning the International Registration of Marks (known as the Madrid System). Patent and trademark applicants may use these international systems for filing international patent and trademark applications for requesting protection in Vietnam. The Copyright Office of Vietnam (COV) administers copyright protection law. Although copyrights can be protected in Vietnam without any registration requirement, formal recordation of copyrights at the COV is recommended as it would be useful as evidence of ownership in the event of a dispute. In 2007, Vietnam joined the Rome Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations. While significant progress on the legal regime for protecting IPR has taken place in recent years, enforcement of IPR remains inadequate at the street and market level, at least regarding trademark violations. A wide variety of consumer products bearing false or misleading labels are also readily available in the markets, as are counterfeit labels themselves. In recent years, online sales of counterfeit goods and illegal movie streaming have been rampant. Enforcement of on-line IP infringement has been of serious concern.

There are several enforcement agencies involved in and vested with the authority to address IPR infringement issues. These include the Ministry of Science and Technology Inspectorate, the Ministry of Culture, Sports and Tourism Inspectorate, the Ministry of Industry and Trade’s Market Management Bureau, the Ministry of Public Security’s Economic Police, the Ministry of Finance Customs Office, and the People’s Court (Civil Court). Thus, there are no clear-cut lines of responsibility among these agencies. Generally, sending warning letters to ‘infringers’ or bringing civil actions to the courts has not been very effective. Warning letters that are not accompanied by a decision of infringement from the National Office of Intellectual Property (NOIP) are often ignored and court actions are lengthy and relatively costly.

In Vietnam, we see there are problems in IP enforcement, as there is not one agency of government specifically dedicated to IP protection and IP disputes. The problem of using false labels in goods, counterfeiting, and illegal movie streaming are also widespread. Well, these are common problems related to IP protection but the steps the government takes related to these problems is an important issue.

Now, Let’s see the legal framework in South East Asia for IPR enforcement through this table.

To assure timely processing of IP cases with accurate and consistent application of IP law, many countries have established a dedicated legal framework specifically for IPR Enforcement, which typically involves the establishment of both a specialized court having competency in dealing with IP and specialized procedural rules to be observed by such courts. Below is a summary of countries in South-East Asia where such specialized IP courts or specialized IP court procedures within civil litigation are available:

COUNTRY AVAILABILITY OF IP COURTS AVAILABILITY OF IP RULES
Brunei NO NO
Cambodia NO NO
Indonesia YES YES
Laos NO NO
Malaysia YES YES
Myanmar NO NO
Philippines YES YES
Singapore YES YES
Thailand YES YES
Vietnam NO NO

We see in Vietnam, Myanmar, Laos, Cambodia, and Brunei, there is still a need to develop a proper IPR enforcement agency that would focus only on IPR related issues.

Lastly, let’s have a look at Myanmar’s legal system related to IPR.

MYANMAR

Relevant Laws related to IP in Myanmar

Type of IP Substantive Law Related Laws
Trademark Nil -Penal Code
-Merchandise Marks Act
-Specific Relief Act
-Sea Customs Act
-Registration Act,1908
Copyright Burma Copyright Act, 1914 -Specific Relief Act
-Television Video law
-Motion picture law
Patent Nil Patent and Design (Emergency provisions Act), 1946
-Specific Relief Act
Industrial design Nil -Patent and Design (Emergency provisions Act)
-Specific Relief Act

So, Myanmar has no statutory law for IP protection. There are only general laws for IP protection.

Myanmar’s long-awaited Trademark Law was signed into law on January 30, 2019, establishing the framework for a comprehensive trademark registration system open to both foreign and domestic trademark owners. Once the administrative bodies and enabling legislation to support this system are in place, all existing trademark owners who have recorded their rights under Myanmar’s old system will have to file new applications to protect their marks under the new law.

IP Landscape in South-East Asia and Challenges

Patent Protection in South-East Asia: Registrations and Challenges Companies owning patents and doing or planning to do business in South-East Asia may wish to create long-term value by either finding investors who believe in the economic value of their invention or by licensing patents. It is crucial that SMEs apply for patent protection in those South-East Asian countries of interest to their business, as patents registered in Europe, being territorial rights, have no legal protection in any other country other than the country of registration. SMEs are strongly advised to become familiar with the local patent protection systems in South-East Asian countries. Invention patent applications can be typically filed in English in most of the South-East Asian countries, but SMEs should keep in mind that Indonesia, Thailand, and Vietnam require the applications to be filed in their respective languages. As of today, the timing for obtaining the grant of a patent in South-East Asian countries can be quite long (up to 5 to 8 years in Thailand, 3 to 5 years in Indonesia, 2 to 4 years in Brunei, 4 to 5 years in Laos), and therefore EU SMEs are recommended to put in place a well-thought strategy to maximize protection. Costs for obtaining a patent in the different South-East Asian countries vary in each country and are in the range from EUR 2.000,00 to EUR 7.000,00.

In order to protect your trademark in the countries of South-East Asia, registrations are recommended and required. Certain South-East Asia countries, such as Singapore, allow protection of unregistered trademarks based on laws that protect rights against passing-off or rights against unfair competition. In some cases, local judges may still only recognize the establishment of trade identity protection through national registration. Among the ten countries of the ASEAN Economic Community, Brunei, Cambodia, Laos, Philippines, Singapore, and Vietnam are members of the Madrid System administered by WIPO, which means that SMEs can opt to register their trademark in many South-East Asian countries simultaneously by filing only one basic application and then designating the countries of their interest at the same time or at a later stage, with no time limitations for the extension. As of today, some major countries of South-East Asia are not yet party to the Madrid System, including Indonesia, Malaysia, Myanmar, and Thailand. Additionally, Brunei, Indonesia, the Philippines, Cambodia, Laos, Vietnam, Thailand, and Singapore provide for a multi-class application system, but Malaysia requires separate trademark applications for each class of goods and services.

Similar to patent applications, Indonesia, Thailand, and Vietnam require the trademark applications to be filed in their respective languages. Implementation of IPR laws across South-East Asia also tends to vary from one country to another, owing in part to the diversity of culture, history, economic and legislative development in the region. Thus, when enforcing IP rights, SMEs should keep in mind that private mediation might be more effective than judicial proceedings in some countries. Enforcement is generally rather challenging in South-East Asia, as in many countries criminal prosecution and civil action tend to be long and therefore costly. Additionally, due to the limited experience and training of law-enforcement officers and judges, outcomes and decisions on IPR issues tend to be inconsistent. Lack of transparency and established criteria concerning the determination of compensation for damages, is also still commonplace in South-East Asia, further contributing to the unpredictability or inconsistency of the judgments. To ensure timely processing of IP cases with accurate and consistent application of IP law, some South-East Asian countries have dedicated legal frameworks specifically for IPR enforcement typically involving the establishment of both a specialized court having competency in dealing with IP and specialized procedural rules to be observed by such courts. Currently, Malaysia and Singapore are among the few countries in the region with dedicated IP Courts and specialized judges.

RECOMMENDATIONS

-To establish the necessary infrastructure of IP Office including Registration system and Enforcement where there is no particular agency governing IPR issues. A comprehensive and effective IP protection system to promote foreign investment and technology transfer as well as industrial development.

-Developing human resources and promoting the quality of staff is important when establishing an IP Office. Technical assistance is needed when setting up the IP infrastructure in collaboration with local and international organizations.

-The scale of counterfeiting remains very high. Fake products are being continuously produced and marketed globally. Consumers are being endangered due to the high exposure to inferior products in the market. Strict penal provisions should be laid out for protection against such acts.

-Online piracy has been a growing problem as access to the internet has widened. Illegal downloads of many media contents, either for private use or for reselling, have become open to the public. The mechanism to check online piracy should be there.

-The capacity of IP agencies needs to be strengthened to develop a conducive IP environment, raise public awareness on IP issues, and provide the right skills to identify and support the innovation that contributes to economic growth. The time frame for granting IP applications has not been effective yet. In some ASEAN countries, such as Indonesia and Thailand, there has been a backlog of applications including delays of 5 to 9 years for patients in Thailand. Some inefficiencies of bureaucracy have created the deceleration to IP support.

-Business and entrepreneurs also have to contribute and make efforts to improve the environment for IP through ensuring a plan for such protection since IP is a crucial component for business strategy making. -It’s observed that certain legislative measures by the government also tend to constrain the uses of a holder’s IPR. For example, Indonesia passed legislation that requires patent holders to produce a patented product in Indonesia. Although the Indonesian Government had some positive reasons for exercising this legislation, the implementation of this legislation

will discourage the business and entrepreneur due to the high-cost implementation. Many businesses and entrepreneurs perceive that the Government should instead focus on creating the best possible environment for innovation and encouraging the development and production of patented products.

– The threats that each ASEAN country is facing have forced each country to improve both its administration and legislative enforcement, including improving cooperation between government agencies and the private sector. So, the need is to establish formal mechanisms for greater cooperation with the private sector.

-Introduce effective legislation to require Internet Service Providers to remove IP infringing content from the internet as fast as possible.

-Improve IP enforcement agency capacity to reduce backlogs and increase the efficiency of process tor recognizing legitimate intellectual property.

-Government regulations should focus on promoting and enforcing intellectual property rights.

– There is a need to develop government agencies that would particularly focus on Intellectual Property Infringement cases. Instead of many legislations taking care of IPR issues, there is a need that there should be one legislation governing only IPR issues. Then the offenders will become aware of the punishment laid out for IPR related offenses.

-South-East Asian countries like Myanmar should be made aware of the advantages of being part of International IPR conventions like the Bern & Paris conventions.

– There should be one confederation of South-East Asian nations which will deal with online piracy. There could be one Cyber Security cell regarding this in each country.

– A comprehensive Intellectual Property code could be made.

-All IP offices that are usually part of the government and as such pay wages mostly cannot compete with the private sector. Under the circumstances, it is difficult to attract technically qualified personnel. It seems that one important consideration for this step was to provide more financial incentives to examiners, who are now supposed to become stakeholders in the efficient performance of the office.

CONCLUSION

While a smaller ASEAN at the beginning of the 1990s consisted of countries at very similar levels of intellectual property protection, the picture of intellectual property protection in ASEAN is now much more diverse. An important reason for this is the enlargement of ASEAN that has added countries classified as least developed such as Laos and Myanmar. In addition, Singapore has achieved developed country status and older members of ASEAN such as Indonesia have been preoccupied with political and social problems so that ASEAN members have recently been drifting in different directions in intellectual property developments. We could say that legislative reform is proceeding at a fast pace. We must not forget that the value of IP protection shall be anchored in the ability of companies to effectively and efficiently enforce their IP rights.

Finally, the countries of the region are particularly pressurized to set up the institutions supporting the intellectual property system often within a very short time frame. Again, specialization has been the preferred solution and attempts have been made to separate intellectual property to some extent from the general administrative and legal system. Examples for this development are the specialized intellectual property and international trade court in Thailand, which has been followed by semi specialized commercial courts in Indonesia and the Philippines, while other countries are considering the introduction of a more specialized court system. Though it is obviously difficult and a time-consuming process for developing countries with insufficient administrative resources to create the rather sophisticated administration that an intellectual property rights system requires.

A clear vision of an IP strategy in South-East Asia can impact a company’s growth and prevent loss of revenue further down the road. A successful IP protection strategy therefore necessarily includes a careful selection of effective legal tools and business partners in order to make sure the infringers are continuously kept at bay from being able to harm the IP owner, its valuable assets, and its customers.

To conclude we can say that even though IP enforcement remains challenging in South-East Asia, it is not entirely impossible. Understanding local practices and implementing a strategy in advance is the key to IP enforcement in South-East Asia. EU Small Medium Enterprises seeking to protect their IP rights in the South-East Asian region should thus consult with legal service providers having local expertise and who would be able to navigate the practical and operational considerations in place in the country in order to best serve their needs for enforcement.

Counterfeiting and Online piracy are the common problems related to Intellectual Property Rights in South East Asia, thus steps are needed to control these problems. Then there is a need for Uniform IPR enforcement in these regions. There is a need to establish IP Courts that would specifically focus on IPR issues. South- East region needs to have stringent laws regarding IP violations.


Author: Purnashri Das, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at Ankit Kumar ankit@iiprd.com.

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