Asia’s intellectual property landscape has experienced a transformative shift in recent years. As innovation surges, it must be protected with efficient strategies
The rise of the Asian market has not only brought economic prosperity but has sparked a renewed focus on valuing and protecting creative ideas. Intellectual property (IP) is a rich field for legal contest. From Tokyo and the soaring skyscrapers of Shanghai to the bustling markets of Singapore, the importance of IP has become an integral part of innovation.
Statistics reveal the true magnitude of the shift. In February, the World Intellectual Property Organisation reported the number of patent co-operation treaty filings in 2022 reached a record high of 278,100 that year. Asia emerged as the dominant contributor to international patent applications, accounting for 54.7% of the total. Compare this to 2012, when the region’s share stood at 40.3%.
As Asian countries continue to invest in research and development, and champion the rights of inventors, we talked to IP practitioners at the International Trademark Association’s (INTA) 2023 annual meeting in Singapore on 16-20 May, the second time the convention has been hosted in Asia. Many say the importance of IP will only continue to grow and evolve, propelling the region to greater heights of influence.
Zaheera Hashim, a director and assistant general counsel at Procter & Gamble in Singapore, notes the burgeoning e-commerce and digital economy in Asia has posed a new challenge to building IP strategies.
“In designing products for the Asian consumer, who is mobile-first and very digital, there is certain advertising that is better on mobile than traditional advertising,” she says. “So, when we craft our brand story, it’s now more adaptable and suitable for online shopping and younger consumers.”
Working in a multinational company with a wide range of personal and consumer health products, Hashim sees each product segment as requiring specific protection and enforcement strategies. Therefore, the company has lawyers sitting with the commercial teams to better understand market strategies and enforcement priorities.
“It’s not a one-size-fits-all IP strategy,” she says. “I think that’s the key to success, to actually sit with the business partners to understand what their priorities are, and then come up with an IP strategy that works for that business.”
With products from baby care to laundry detergent, skin, hair and personal care, Hashim has teams of lawyers specialising in IP, marketing and advertising laws. “We also work very closely with our brand protection lawyers on the enforcement of our IP in the Asia-Pacific, as in-market trends have shifted from counterfeiting to selling of lookalikes, especially in this region,” she says.
Wang Kan, IP director at Suzhou-based high-end medical imaging manufacturer Raycan, says that IP protection strategies also depend on a company’s products and positioning. A Chinese company with a target market solely in China and nowhere else would not need to protect its IP rights overseas, but for companies with products aimed at the global market protection becomes very necessary.
“In our case, our competitors are leading companies from all over the world, and we have made a series of technological breakthroughs,” says Wang. “We have a high estimation of our own market value and have targeted the global market at the beginning. Currently, our IP business presence can be found in the US, Japan, Europe, Brazil and Africa. So, this aspect is quite important for us.”
Fostering and guarding innovation
The significance of managing intangible assets cannot be overstated. Recognising staff for their contributions to IP and patent protection is also important. Wang observes that a reward system for R&D personnel can motivate a team.
“After our patents are granted, we award bonuses [to R&D personnel],” says Wang. “Patents are divided into ABCD levels, each corresponding to different levels of bonuses. We hope our R&D personnel will create more high-quality patents, which offer the highest bonuses.”
Another type of bonus, says Wang, takes the form of patent conversion revenue. For example, if the company converts a patent into a product and sells it to receive revenue, the inventors will be rewarded based on the contribution that the patent makes to the revenue.
“The third type of bonus occurs when inventors make important contributions to our entire technology or innovation system,” says Wang. “We make an evaluation of their contribution and provide them with equity incentives. This ensures that everyone benefits from our company’s long-term development.”
Hashim suggests that forming an IP protection strategy should be done upstream. Instead of waiting for the business to say what needs to be protected, lawyers should collaborate with the business to comprehend its priorities and actively participate in co-creating the IP.
“I think for a lawyer, sitting down early in the ideation stage is critical,” says Hashim. “Understanding the technology and the business first, and then coming up with a practical IP strategy, is paramount.”
However, Hashim admits a company cannot safeguard its intangible assets alone in IP enforcement, and looks at agencies with cutting-edge technologies to sweep the e-commerce and social media platforms and come up with cost-effective solutions. She works with different external lawyers and trademark agents for each country.
Apart from being an expert in the field, people will be highly regarded for their value-added advice if they have strong connections and good relations with IP offices and law enforcement authorities in every jurisdiction, and a mindset of seeking to understand their client’s business first.
“Every trademark agent can give trademark advice but not everyone can give constructive business-focused advice,” says Hashim.
Cover all bases
Grace Shao, a partner at Baker McKenzie in Taipei, agrees about close-knit collaboration. “If there is one thing that I would suggest a company considers, it is to view IP strategy as part of their business decisions, as investments, and try to make the best use of IP – not consider it separate from the business,” says Shao, “because if you want to save costs and don’t want to file IP, then your protection will be very limited.”
Given new technology, she says that filings or protection cannot be siloed and must be interconnected. Some IP can be protected as patents and trade secrets, and trademarks can also be protected by design or copyright.
Many companies, even those selling traditional products, are restructuring their IP teams to catch up with development, to be more agile in strategy, to be face-to-face with customers, and to effectively combat piracy.
“They have not only a trademarks department, but also include the patents department to consider, for example, design patents, and a department to deal with online piracy, online enforcement and domain names,” says Shao. “These are all very important, and companies can consider adopting a new strategy and a new structure for IP strategy.”
For Nick Redfearn, global head of enforcement at Rouse and based in Jakarta, planning is the most important thing with IP litigation. However, he says that sometimes the business and the traditional IP processes don’t converge. A company may set up some commercial operations or factories in Asia but with not much in sales, which is quite common.
“Plan ahead as soon as a company is thinking about trading in Asia, and start to figure out which markets are important,” says Redfearn. “Where is the manufacturing? Where are the sales? Where are the regional centres, like Singapore and Hong Kong? And then plan the IP around that.”
He also highlights that there are markets where businesses need to be cautious with trademark pirates. A company must properly examine high-risk markets.
“Every country has different levels of sophistication in its enforcement and litigation systems, but in most places there is something you can do, even if it’s just self-help,” says Redfearn. “There are cases where people have turned up in Indonesia and … found that someone had already registered their trademark, and they do some kind of covert buyout, and then they can enter the market that way.”
Redfearn also acknowledges the dynamic developments in Asia in the past few years. Apart from Japan, which has historically been a huge source of IP around the world, a few jurisdictions stand out.
“China has particularly led the way because so many Chinese companies have been very focused on developing IP portfolios,” he says. “They had some domestic help from the government, sometimes in the form of grants that enabled more than filing IPs around the world.”
“Also, Southeast Asia now is starting to catch up a little bit in terms of big businesses here that want to develop internationally,” he says. “All over Southeast Asia, you can see new local champions going global, which is creating growth in filings around the world.”