Enforcement of IPR in the Emerging Markets of

Southeast Asia

27 March 2014 ASEAN IPR SME Helpdesk

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Today’s Speaker Rupert Ross-Macdonald

Firm: Rouse & Co International LLP Location: United Kingdom Email: rrossmacdonald@rouse.com

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Agenda •ASEAN as a whole

•Five key jurisdictions

¾ Indonesia ¾Thailand ¾Philippines ¾Vietnam ¾Myanmar

•Q&A

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Know before you go

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ASEAN - General • Members

• Population

• GDP

• Growth

• EU-ASEAN trade

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Question: Do you have business dealings in Southeast Asia?

(please select 1 answer only)

A. Yes, established for several years

B. Yes, just started

C. No, but I have business in other Asian countries

D. No, only in Europe currently, but I’m considering it

Poll 1

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ASEAN – IPR protection • IPR - Trade marks - Patents - Copyright - Trade secrets

• National systems

• Regional frameworks

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ASEAN – IPR problems • Global counterfeiting hotspots

• USTR Special 301 Report

• Problem areas

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Question:

Have you had any issues with IP enforcement in Southeast Asia?

(You can select more than one option.)

A. Yes – patents

B. Yes – trade marks

C. Yes – designs/copyright

D. Yes – confidentiality/trade secrets

E. No or other

Poll 2

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ASEAN – Enforcement Options • Criminal

• Civil

• Administrative

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ASEAN – enforcement options - Criminal • Process

¾ File complaint with police -> police investigation - > seizure/arrests -> prosecution -> punishment

• Pros

¾ Extensive powers; deterrent effect; costs

• Cons ¾ Limited resources; prioritisation of IPR; delays; corruption; lack of IPR

owner control; costs?

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ASEAN – enforcement options - Civil • Process

• Gather evidence -> [seizure order] -> file claim -> arguments -> hearing -> decision -> appeal(s)

• Pros

• More IPR owner control; damages; leverage for settlement

• Cons • Costs; time consuming; judicial understanding of IPR; corruption

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ASEAN – enforcement options - Administrative • Some administrative bodies in some countries charged with IPR enforcement,

eg. Market Management Bureau in Vietnam

• Effectiveness varies

• Customs – TRIPS & World Customs Organisation framework

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Question:

Have you had to resort to IPR enforcement in any of the following

countries? (You can select more than one option.)

A. Yes – Indonesia

B. Yes – Thailand

C. Yes – Philippines

D. Yes –Vietnam

E. No

Poll 3

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Selected ASEAN jurisdictions • Market summary

• IPR registration

• IPR enforcement

• Key tips

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Indonesia – Market Summary

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ͻ Economic boom – 6%+ GDP growth, low GFC impact, robust consumption and investment growth; G20 economy, 240 million (young) population

ͻ Risks: corruption, legal uncertainty, poor infrastructure, terrorism

ͻ Fast growing, largest market in Southeast Asia; IP holders cannot ignore it; but has the weakest IP system amongst the ASEAN 5

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Indonesia – IPR registration ͻ Manual systems = many registration errors • Chronic pirate TM registration problem – civil court litigation to recover

bad faith marks • Copyright register – abused through pirate registrations of famous logos • Weak TM examination e.g. many descriptive terms are registered • Non traditional trade marks not permitted (yet) • No design examination

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Indonesia – IPR enforcement • Weak legal system – high lack of precedent and certainty • Few criminal enforcement raids, police corruption; very few IP

raids go to prosecution • No useable customs border protection system • Civil litigation system improving, (specialist Commercial Court)

but preliminary injunctions still untested, seizure orders may not work, many evidence complexities

• Judicial corruption is a problem in some civil cases (est. around 20%)

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Indonesia – Key tips ͻ Register early and do not leave IP portfolio registration gaps; don’t allow

local partners to register IP; deal with TM pirates promptly. ͻ Use good local language patent translators as the local language patent

specification is determinative. ͻ Use alternative enforcement strategies while Criminal and Customs are

unusable – e.g. warning letters, negotiation and civil actions. ͻ Take care with evidence in civil cases, use litigators not IP agents to sue in

court. ͻ Be very alive to corruption risks.

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Thailand – Market Summary

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• GDP growth >6% (2012); 70m population • Key industries: electronics, plastics, processed food; developing biotech

sector • Political instability • Long history of counterfeiting, especially at market level – tourism

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Thailand– IPR registration • Copyright recognised under Berne Convention – but can register with the

Copyright Office (advisable) • Recently joined the Patent Co-operation Treaty – better and cheaper process

for foreign rights owners • Trade marks - official fees charged on the basis of product categories, rather

than classes

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Thailand – IPR enforcement • Dedicated Commercial & IP Court – however, still shortcomings in civil cases

(eg lack of discovery, proving damages, unpredictability) • Criminal is probably the most effective route for anti-counterfeiting , police

will make ex-officio seizures • Customs IPR recordal system is in place • National IPR Centre of Enforcement (NICE) – set up in 2013 and responsible

where high level inter-agency co-operation needed

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Thailand – Key tips • “First to file” system for trade marks: ensure rights are registered – early

where possible. • Deal with “bad faith” registrations through non-use cancellations. • Consider national patent applications due to overloading of the PCT

system.

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Philippines – Market Summary

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• Population just under 100m • Economy – 6.6% GDP growth in 2012 • Increase fuelled by robust performance of

services sector led by trade, real estate, manufacturing and construction

• Emerging industry: BPO (Philippines has overtaken India as the world leader in business support functions)

• Risks – corruption; poverty rates worsened despite dramatic improvements in some cities

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Philippines – IPR registration • Philippines ranked 3rd in the Asia and Oceania Region in patent protection

based on the International Property Rights Index 2011 - significant increase in speed of substantive examination of patents due to increase in number of examiners

• Numerous bad faith trade mark registrations – often to negotiate pay off from owner

• Criminal laws protect trade secrets but rarely used in practice – more common to rely on contracts which can be more effectively enforced

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Philippines – IPR enforcement • Difficult in practice to work with the police and NBI – significant

corruption risks • Customs recordal possible; in reality customs make no border seizures;

significant corruption risks • Delays in judicial process make courts very slow • Significant risks in litigation of procedural arguments by defence counsel

dragging out proceedings • Criminal prosecutions face long delays (up to 10 years to trial)

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Philippines – Key tips • Due to uncertainty of litigation and

corruption concerns, negotiate and settle

• Do not get dragged into long technical arguments in litigation which delays cases!

• Review portfolios to ensure that all TMs are protected as trade mark piracy is common

• Be careful in filing TM DAUs (Declaration of Actual Use); online website sales to the Philippines can support them

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Vietnam – Market Summary

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ͻ Fast growing: +5.1% GDP, growth prospects, robust consumption and investment growth

ͻ 90 million (young) population ͻ Risks – corruption, legal uncertainty, low R&D levels, poor infrastructure ͻ Comprehensive IP system but difficulties with implementation,

population lack of awareness of IP matters

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Vietnam – IPR registration • Strict TM examination process (few descriptive TMs or errors) • TM oppositions: no clear deadlines to oppose • Well-known TM recognition: subjective, depends on examiner’s

experience and point of view • Patents: overloaded examiners, short time to answer office actions • NOIP (National Office of Intellectual Property) uncomfortable with

patents: granted if first application accepted in another country by prestigious patent offices (USPTO, JPTO, etc.)

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Vietnam – IPR enforcement • Few criminal enforcement raids, few criminal

prosecutions • Few civil actions (judges not trained; long,

costly, uncertain civil process) • Mostly administrative enforcement, with

drawbacks – no strong deterrent effect, necessary to work closely with authorities

• Authorities sometimes reluctant to deal with complex infringements (such as copyright, patent, unfair competition, Gis)

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Vietnam – Key tips ͻ Seek IP protection before entering the market ͻ Closely monitor markets and IP gazettes for infringements ͻ Act promptly and firmly against infringers ͻ Use administrative enforcement (warning letters, negotiation, administrative

authorities etc.) ͻ Train and engage closely with authorities ͻ Be very alive to corruption risks ͻ Actively manage evidence of infringement, and information/data/materials of

business for proving well-known trademark or actions against unfair competition

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Myanmar • No existing specific IPR laws (although some laws which can be used to

take action) • New laws coming as economy opens up - final draft of TM law. To be

followed by copyright & design laws, and then patents. • In the meantime there are some basic steps which can be taken to

protect if Myanmar is going to be a future market : • localisation • recordal • publication • reapplication (later)

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Case Study 1 – bad faith registrations (Indonesia)

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ͻ CROCODILE Hand Tools ͻ Chillington Tool Co v Hertiny Soedjianto ͻ Cancellation in Jakarta court ͻ Soedjianto’s attorney "Our clients already have the brand and logo

registered since seven years ago.” ͻ Evidence - bad faith, fame ͻ Chillington successful

Case Study 2 – copyright case (Vietnam)

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• Tri Viet-First News Company - publisher • Australian International Language School and Viet Nam Australia Society

English Centre • Ho Chi Minh City Peoples' Court • Illegal copyright infringement of 11 English-language titles and CDs - foreign

language centres copied course books • Warning notices last year had apparently been ignored • Sued for damages VND380 million ($18,100) • Defendants apologized, paid compensation (combined VND770 million

=USD36,824), then Plaintiff withdrew the law suits

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Q&A Rupert Ross-Macdonald

Firm: Rouse & Co International LLP Location: United Kingdom Email: rrossmacdonald@rouse.com

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Helpdesk Country IP Factsheets for the ASEAN countries

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Join Our Upcoming Events and Webinars! 3 April 2014, Jakarta, Indonesia: Enforcement of Intellectual Property Rights in Indonesia 7 April 2014, Manila, the Philippines: Intellectual Property Rights for SMEs 10-11 April 2014, Vienna, Austria: East Meets West, Forum on Asian Patent Information 7-11 April, Leeds, Huntington, Leicester, Birmingham and Bristol, UK Sizzling Southeast Asia Roadshow 17 April, Online Webinar: Successful Technology Transfer to Southeast Asia 24 April 2014, Warsaw, Poland: Supporting SME’s on Southeast Asian Markets

Visit our Events Calendar for further details. 27 March 2014

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Other IP Support Services

For information about IPR in China, please contact the China IPR SME Helpdesk

Telephone: +86 (10) 8527 6922 E-mail: question@CHINA-iprhelpdesk.eu

Online: www.CHINA-iprhelpdesk.eu

For information about IPR in the EU, please contact the EU IPR Helpdesk

Telephone: +352 - 25 22 33 – 333 E-mail: service@iprhelpdesk.eu

Online: www.iprhelpdesk.eu

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The ASEAN IPR SME Helpdesk provides free, confidential, business-focused advice to European Small and Medium

Enterprises (SMEs) relating to IPR in South-East-Asia

�Helpdesk Enquiry Service – question@asean-iprhelpdesk.eu �Training & Events �Materials �Online Services - www.asean-iprhelpdesk.eu

For more information about our services and how the ASEAN IPR SME Helpdesk can add value to SMEs, please contact: Telephone/Hotline: +62 21 571 1810

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