News from our Malaysian Expert

Asean – the new frontier:

IP and the latest developments

In today’s era where branding is a key component towards the success of a business, the importance of intellectual property (IP) continues to rise. As the article will be ASEAN-oriented, it should first be highlighted that IP-intensive industries in the ASEAN region generate approximately 27% to 60% of exports, comprise 17% to 50% of the collective GDP, and employ 13% to 29% of the total ASEAN workforce.¹ To illustrate further, reference is made to an assessment conducted by the International Trademark Association (INTA) in 2017 on the economic contribution of trademark intensive industries in 5 economies in the ASEAN region: Indonesia, Malaysia, the Philippines, Thailand and Singapore, which between them account for nearly 90% of the ASEAN community’s combined GDP.²

Economic contribution of trademark intensive industries (to GDP)

 

Country	Direct Contribution	Indirect Contribution	% of exports
Thailand	22%	40%	60%
Malaysia	30.3%	60%	55%
Philippines	17%	41%	47%
Indonesia	21%	51%	27%
Singapore	50%	55%	62%

 

To better equip themselves to deal with this, countries have taken the initiative to strengthen their IP infrastructure and secure IP rights (IPR) protection. Nevertheless, IPR(s) are territorial in nature, as it would be unfair for a brand owner to claim IPR(s) in all countries regardless of whether it has actually been used. However, in this day and age of globalization, goods are more often than not manufactured in other countries before being sent to their final destination, hence there are IPR implications for the country of origin, country of destination, as well as any countries in transit. From a consumer standpoint, goods are also available to be purchased from virtually anywhere in the world, which means that accessibility to counterfeits, whether intentional or not, is at its peak. It appears that at this rate, our traditional notion of territorial IPR(s) would soon be unable to deal with this phenomenon.

The key to filling this gap would be through harmonization, which will in turn lead to convergence and interoperability of IPR(s). Understandably, this is not an original or a pioneer concept, in fact there have been multiple instances of “regionalization of IP” throughout the world, for example the European Union Intellectual Property Office (EUIPO), the African Intellectual Property Organization, as well as the Eurasian Patent Organization (EAPO).

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¹ ‘First-Time Study Demonstrates Trademarks’ Major Contribution to GDP, Exports, and Jobs in Five ASEAN Countries’, available at https://www.inta.org/Press/Pages/ASEAN_ImpactStudy_Gen.aspx

² ‘The Economic Contribution Of Trademark-Intensive Industries’, available at https://www.inta.org/Communications/Documents/INTA_ASEAN_Economic_Impact_Study_082717.pdf

 

 

The Association of Southeast Asian Nations (ASEAN)

The Association of Southeast Asian Nations (ASEAN) was formed in 8^th August 1967 by 5 founding countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) with a view to cooperate in the economic, social, cultural, technical, educational and other fields. Today, ASEAN has 10 member countries, with a combined population of 640 million, and a combined GDP of USD2.4 trillion as of 2017, and this number is likely to grow. ASEAN is currently the 7th largest economy in the world and is set to be the 4th largest economy by 2050.³ To reiterate the data mentioned above, IP-intensive industries in the region generate approximately 27% to 60% of exports, comprise 17% to 50% of the collective GDP, and employ 13% to 29% of the total ASEAN workforce.

ASEAN Working Group on Intellectual Property Cooperation (AWGIPC).

In light of all these developments, initiatives and programs on IP legislation, enforcement, and administration are required to be put in place in order to ensure that IPR(s) are not undermined. ASEAN recognizes this, and in 1996 has set up the ASEAN Working Group on Intellectual Property Cooperation (AWGIPC). To put things into motion, the AWGIPC has come up with the ASEAN IP Rights Action Plan 2016-2025 targeting the 4 following strategic goals⁴ :

• Strategic Goal 1: A more robust ASEAN IP System is developed by strengthening IP Offices and building IP infrastructures in the region;
• Strategic Goal 2: Regional IP platforms and infrastructures are developed to contribute to enhancing the ASEAN Economic Community;
• Strategic Goal 3: An expanded and inclusive ASEAN IP Ecosystem is developed; and
• Strategic Goal 4: Regional mechanisms to promote asset creation and commercialization, particularly geographical indications and traditional knowledge are enhanced.

In the past decade, ASEAN had already achieved several milestones in the improvement of the IP landscape:

ASEAN Guidelines on substantive examination of trademarks and industrial designs

In its efforts to streamline and upgrade the administration and protection of trade marks in the region, examination is an area that has witnessed changes. The ASEAN Common Guidelines on the Substantive Examination of Trade Marks were recently updated in November 2017.⁵ The periodic updating of these guidelines is an initiative under the ASEAN IP Rights Action Plan 2016-2025—it was recommended to review the guidelines every 3 to 4 years under the previous EU-funded ECAP III project.⁶ The guidelines are intended to supplement the national guidelines of ASEAN Member States’ IP offices and establish consistent evaluation of trademark applications across jurisdictions in the region, leading to improved quality of trademark examination and decisions for rights holders.  It also serves as a guide for legal practitioners.⁷

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³ ‘US-ASEAN Business Council’, available at http://asean.org/storage/2017/01/Investing-in-ASEAN-2017-.pdf

⁴ ‘The ASEAN Intellectual Property Rights Action Plan 2016-2025: Meeting the Challenges of “One Vision, One Identity, One Community” through Intellectual Property’, available at https://www.aseanip.org/Portals/0/ASEAN%20IPR%20ACTION%20PLAN%202016-2025%20(for%20public%20use).pdf?ver=2017-12-05-095916-273

⁵ ‘Common Guidelines for The Substantive Examination of Trademarks (First Edition) available at ’https://asean.org/?static_post=common-guidelines-substantive-examination-trademarks-first-edition

⁶ ‘EU supports ASEAN officials to improve the quality of trademark registration and procedures’ available at https://eeas.europa.eu/delegations/chile/49409/eu-supports-asean-officials-improve-quality-trademark-registration-and-procedures_es

⁷ ‘Common Guidelines For The (First Edition) Substantive Examination Of Trademarks’ available at https://asean.org/wp-content/uploads/2017/12/35.-November-2017-Common-Guidelines-for-the-Substantive-Examination-of-Trademarks.pdf

 

 

ASEAN common application forms for trademarks and common data bases (ASEAN IP Portal)

The ASEAN IP Portal was launched in conjunction with World IP Day 2013, and serves as a hub to connect information and data across all the ASEAN IP Offices. Stakeholder of ASEAN Member States are provided access to IP information for the entire ASEAN region via a single portal, with information ranging from ASEAN IP systems, comparative IP-related data, and web links to ASEAN IP Offices. The portal also boasts several features, the more notable ones are:

ASEAN Patent Examination Co-operation (ASPEC) – The first regional patent work-sharing program among ASEAN IP Offices. Through the program, search and examination results of one participating IP office to be considered by the other participating offices. The program reduces duplication and allows for search and examination work done on corresponding applications to serve as useful reference in producing quality reports. Overall, ASPEC will help patent applicants obtain high quality search and examination results more quickly in ASEAN.⁸

ASEAN TM View – Provides access to information on more than 2 million trademark applications and registrations having effect throughout the ASEAN bloc and is available 24 hours a day, 7 days a week.⁹ Such regional trademark information is important to companies, as it can significantly impact their brand and trademark filing strategies.

ASEAN TM Class – a free multilingual online tool for the classification of goods and services. The database contains terms accepted by all ASEAN IP offices for identifying goods and services during trademark registration, and users can also obtain translations of the terms into their working languages.¹⁰

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⁸ ‘What is ASPEC’ available at https://www.aseanip.org/Services/ASEAN-Patent-Examination-Co-operation-ASPEC/What-is-ASPEC

⁹ ‘ASEAN TMview’ available at http://www.asean-tmview.org/tmview/welcome#

¹⁰ ‘ASEAN TMclass’ available at http://www.asean-tmclass.org/ec2/

 

 

Pan-ASEAN Trade Mark System

The next step for ASEAN would be the implementation of a Pan-ASEAN Trade Mark System. This system is an ambitious approach to trade mark filing, and has been brought up for discussion by the AWGIPC in yearly meetings. The concept of this system is to bring together the IP agencies of the ASEAN region and to enable filing in all offices via any one of the offices. The idea of a regional trademark system was previously rejected. As early as the late 1990s, the working group considered the issue but faced practical difficulties with differences in language, jurisdiction, jurisprudence, and basic law across the member states, and that such regional filing system would do not better than the multilateral system of Patent Cooperation Treaty (PCT), to which most countries in the region are members.¹¹

Strengthening intellectual property rights cooperation is one of the key elements of the ASEAN Economic Community Blueprint 2025. Strategic measures to achieve it include developing regional IP platforms and infrastructure and enhancing regional mechanisms to promote asset creation and commercialization such as developing supporting schemes for micro, small and medium enterprises (MSMEs).

MSMEs were identified as the backbone of ASEAN economies and ASEAN’s aim is to emphasize the development and promotion of MSMEs, including through a structured and targeted MSME programme “to enhance MSME competitiveness, resilience and to enable greater benefits from ASEAN integration”¹²

In this connection, a Pan-ASEAN Trademark Application System is a simpler and cost-effective alternative to international trademark applications for MSMEs. The advantages of a Pan-ASEAN TM Application System include reduced costs as compared to a dual approach of direct and international applications, single applications, a common filing platform and requiring less change to the local trademark laws and trademark examinations of the ASEAN member states. A Pan-ASEAN TM Application System could therefore serve as a springboard for MSMEs to tap into the ASEAN market, as well as a stepping stone to adoption of the Madrid Protocol.

Philippines has been selected by the AWGIPC as a pilot country for the Pan-ASEAN TM Application System and groundwork such as studies, discussions and engagements are currently being carried out. In February, representatives from all 10 ASEAN national IP offices met to discuss the carrying out of feasibility studies for the Pan-ASEAN TM System. The study, to be conducted by the EU funded ARISE+ IPR programme, will consider aspects such as legal infrastructure, operational set-up, fee structures, stakeholder interests and the impact on national trademark systems.¹³

With the System targeted to be launched by July 2020, it appears that the realization of a Pan-ASEAN TM System is indeed on the horizon and it is hoped that the AWGIPC will be able to successfully overcome the System’s present challenges.

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¹¹ ‘The Development Of Asean’s Intellectual Property Rights Law; From Trips Compliance To Harmonization’, available at https://www.researchgate.net/publication/316639679_Harmonisation_of_ASEAN’s_Intellectual_Property_Rights_Law_Is_it_Possible

¹² ‘ASEAN Economic Community Blueprint 2025’ available at https://www.asean.org/storage/2016/03/AECBP_2025r_FINAL.pdf

¹³ ‘ASEAN intellectual property offices advance regional trademark system’ available at https://euipoeuf.eu/sites/default/files/arise-docs/2019/ARISEplusIPR_ASEAN-Regional-Trademark-System_PRESS-RELEASE_18-Feb-2019.pdf

 

 

Business Action to Stop Counterfeiting and Piracy (BASCAP)

A further study conducted by INTA on the economic impacts of counterfeiting and piracy revealed that the value of counterfeit and pirated goods was USD1.13 trillion in 2013 and is estimated to rise up to USD2.81 trillion by 2022.¹⁴ This is a significant amount of loss revenue for brand owners and efforts taken to tackle counterfeit cases on an ad-hoc basis is costly in terms of resources and time.

In the meantime, several IP owners whose rights have been infringed by counterfeiters and pirates have adopted a strategy of redirecting their letters of demand to landlords of premises selling the counterfeiting products and statistics reveal that this have proven to be a fruitful option as landlords have responded positively by issuing warnings to their tenants and amending tenancy agreements to prohibit sale of counterfeit products. Trade mark owners are also advised to put landlords on notice of the infringement by their tenants so that an omission on the landlord’s part (after having been put on notice) would be taken by the courts to be “willful blindness”.¹⁵

In Europe, the International Chamber of Commerce (ICC) launched the Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative. It is a cross border initiative that connects all business sectors worldwide in the fight against counterfeiting and piracy.

In September 2017, BASCAP published the Best Practices for Landlords Governments and Enforcement Agencies based on their report from a previous study in 2015. It includes a collection of better, or best, practices to help responsible intermediaries more effectively deal with vulnerabilities in their operation, and is aimed at providing a blueprint for all parties to effectively remove fakes from physical markets.¹⁶

We believe that ASEAN, being a ‘hotspot’ for sale of counterfeits, would have much to gain from the implementation of this initiative. Take Malaysia for example, the world renowned ‘Petaling Street’ is being flagrantly marketed as the go-to place for any tourists visiting Malaysia looking for counterfeit goods. Multiple enforcement actions have taken place and the authorities are well aware of the infringing activities being carried out there, but to no avail. The BASCAP initiative aims to eradicate these problems by tackling the root, i.e. to make sure that the landlord, or in this case, the authorities which control the street, ensure that the premises is clear of infringement, as they would be held liable for those activities otherwise.

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¹⁴ ‘The Economic Impacts Of Counterfeiting And Piracy’, available at https://cdn.iccwbo.org/content/uploads/sites/3/2017/02/ICC-BASCAP-Frontier-report-2016.pdf

¹⁵ ‘A “Brand” New Leap! – The Malaysian Experience’, available at  http://www.iicj.net/subscribersonly/09april/iicjapril6-intellectualproperty-sheilajeyabalan-measat-malaysia.pdf

¹⁶ ‘Measures to Engage Landlords in the Fight against Counterfeit and Pirated Goods: Best Practices for Landlords Governments and Enforcement Agencies’, available at https://cdn.iccwbo.org/content/uploads/sites/3/2017/09/ICC-BASCAP-Landlords-Paper.pdf

 

 

ASEAN Smart Cities Network (ASCN)

Launched at the 32nd ASEAN Summit as a key deliverable of Singapore’s ASEAN Chairmanship 2018, the ASCN is primarily focused to synergise development efforts, share best practices, and catalyse more opportunities for growth, innovation, capacity-building and sustainable development.¹⁷ Being in its initial stage, ASCN is geared towards resolving identified challenges of rapid urbanisation and its significance on problems issues such as city congestion, water and air quality through the use of technological and digital solutions.¹⁸ Smart City Action Plans have been completed by the 26 ACSN pilot cities and several projects have already been commenced, notable ones include Jakarta’s Integrated Payment Card for Public Transportation (now known as Jak Lingko)¹⁹ and Ho Chi Minh City’s Intelligent Operations Centre²⁰.

Whilst there has been no mention of intellectual property developments as of today, the ASCN may indirectly contribute towards ASEAN IP harmonization by creating a conducive infrastructure which connects all ASEAN countries. Furthermore, the aspect of IP enforcement may also be improved by an expanded network. We have seen recently that apps are being developed to authenticate and ‘tag’ genuine items in systems²¹, and with a network scaled up to the entire ASEAN region, counterfeits in all countries would be easily identifiable and can be dealt with more efficiently, both in terms of time and resources.

Conclusion

Overall, ASEAN has come a long way since its inception, and being a region consisting of rapidly developing countries, it would not come as a surprise that ASEAN may be leading in the growth of IP industries in the future. Through the observations of initiatives, programs, and actions plans being developed by the AWGIPC, it is clear that ASEAN does not see this exceptional growth slowing down any time soon. While still a work in progress, the concept of a harmonized ASEAN region, in terms of IP infrastructure and policies, is being forged and tempered, and with each passing day, we are able to see with more clarity, that we are not far away from achieving that goal.

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¹⁷ ‘32ND ASEAN SUMMIT – CHAIRMAN’S STATEMENT’, available at  https://www.asean2018.sg/Newsroom/Press-Releases/Press-Release-Details/20180428_Chairmans_Statement

¹⁸ ‘26 cities to pilot ASEAN Smart Cities Network’, available at https://qswownews.com/asean-smart-cities-network/

¹⁹ ‘OK OTrip becomes Jak Lingko, expands network’, available at http://www.thejakartapost.com/news/2018/10/08/ok-otrip-becomes-jak-lingko-expands-network.html

²⁰ ‘HCM City calls for investment in building smart city’, available at https://en.vietnamplus.vn/hcm-city-calls-for-investment-in-building-smart-city/138401.vnp

²¹ ‘Sneaker Con bets NFC will keep fakes off its new shoe-selling app’, available at https://www.engadget.com/2018/08/03/sneaker-con-nfc-authentication-app/