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South-East Asia IPR SME Helpdesk Franck Fougere

25 May 2017

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South-East Asia IPR SME Helpdesk

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25 May 2017 Copyright © 2017 South-East Asia IPR SME Helpdesk. All rights reserved. Speaker’s bio Name: Mr. Franck Fougere Firm: Ananda Intellectual Property, Orbis Limited Location: Bangkok, Thailand and Hong Kong Email: [email protected] Franck is Managing Partner and Founder of Ananda Intellectual Property, one of Thailand’s leading IP law firms, and of Orbis Limited, a Business Advisory consultancy also based in Hong- Kong, China, Thailand, Singapore and the Philippines. His practice includes patent and trademark prosecution, anti- counterfeiting and IP litigation (notably trademark and copyright infringement) in Thailand and throughout Asia.

Franck is recognized as one of Thailand’s leading IP professional and won in 2013 the ILO client choice award for best patent practitioner. He has authored numerous articles, expert studies and guides such as the EABC Guidebook on Intellectual Property. He is a former President of the Franco-Thai Chamber of Commerce, a current Foreign Trade Advisor for the French Government and a regular WIPO expert on trademark and copyright issues.

OUTLINE

1) Main Challenges for Startups Poll I Poll II

2) Mitigation Strategies and Key Recommendations

3) Opportunities for EU Startups in South East Asia Case Study 1: Elephant Parade® Case Study 2: Perfumist©

4) Watch Outs, Tips and Conclusions

• CHALLENGE 1: Identifying IP assets – Invention Patents

A PATENT COVERS THE FUNCTION, OPERATION OR CONSTRUCTION OF AN INVENTION.

TO BE PATENTABLE, A FUNCTION MUST BE NEW, INNOVATIVE, HAVE AN INDUSTRIAL APPLICATION AND BE DESCRIBED IN SUCH A FASHION TO PERMIT REPRODUCTION OF THE PROCESS.

• CHALLENGE 1: Identifying IP assets: Design Patents

A DESIGN MEANS ANY FORM OR COMPOSITION OF LINES OR COLORS WHICH GIVES A SPECIAL APPEARANCE TO A PRODUCT AND CAN SERVE AS A PATTERN FOR A PRODUCT OF INDUSTRY OR HANDICRAFT.

THE DESIGN MUST BE (I) NEW AND (II) CAPABLE OF INDUSTRIAL APPLICATION.

https://www.china-iprhelpdesk.eu/sites/default/files/pdf/04112016_DESIGNS_PPT_FRANCK_FOUGERE_002_HD_Revised.pdf

• CHALLENGE 1: Identifying IP assets – Invention Patents/Petty Patents/ Design Patents

• CHALLENGE 1: Identifying IP assets: Trademarks LANCOME ANY SIGN THAT CAN BE REPRESENTED GRAPHICALLY (WORDS, SYMBOLS, IMAGES, ETC...) WHICH IS USED TO DIFFERENTIATE IN THE MARKET PRODUCTS OR SERVICES FROM DIFFERENT COMPANIES.

TO BE VALID THE SIGN SHALL BE DISTINCTIVE AND AVAILABLE AND NOT PROHIBITED BY LAW.

RULES OF TERRITORIALITY AND SPECIALITY Smells marks (GOODS/SERVICES) Sound marks Taste marks Holograms TRADEMARKS ARE USUALLY PROTECTED FOR 10 Moving marks YEARS AND RENEWABLE. IT IS RECOMMENDED TO USE A REGISTERED MARK EVERY 3 OR 5 YEARS.

• CHALLENGE 1: Identifying IP assets: Copyright

•LITERARY WORKS (ADVERTISEMENTS, BOOKS, MAGAZINES, NEWSPAPERS…) •COMPUTER SOFTWARE •MUSICAL WORKS •DRAMATIC WORKS (CHOREOGRAPHY, DANCING, ACTING…) •ARTISTIC WORKS (SUCH AS WORKS OF PAINTING AND DRAWING, SCULPTURES, LITHOGRAPHY, WORKS OF ARCHITECTURE, PHOTOGRAPHIC WORKS, ILLUSTRATIONS, OTHER FORMS OF APPLIED ARTS) •AUDIOVISUAL WORKS •CINEMATOGRAPHIC WORKS •AUDIO RECORDINGS •DATABASES etc.

• CHALLENGE 1: Identifying IP assets: Copyright

IT IS THE EXPRESSION OF THE IDEA AND NOT THE IDEA ITSELF THAT IS PROTECTED, IN OTHER WORDS, A COPYRIGHT PROTECTS THE FORM OF EXPRESSION RATHER THAN THE SUBJECT MATTER OF THE WORK AND A CONCRETE ‘VERSION’ IS ALWAYS NECESSARY.

COPYRIGHT DOES NOT PROTECT IDEAS OR PROCEDURES, PROCESSES OR SYSTEMS OR METHODS OF USE OR OPERATION OR CONCEPT, PRINCIPLES, DISCOVERIES OR SCIENTIFIC OR MATHEMATICAL THEORIES.

PROTECTION LAST 50 TO 70 YEARS AFTER DEATH OF THE AUTHOR.

• CHALLENGE 1: Identifying IP assets: Other IP

DOMAIN NAMES KNOW-HOW KNOW-WHY TRADE SECRETS: TRADE SECRETS A TRADE SECRET IS A CONFIDENTIAL FORMULA, PRACTICE, GEOGRAPHICAL PROCESS, DESIGN, INSTRUMENT, PATTERN, OR INDICATIONS COMPILATION OF INFORMATION USED BY AN ENTERPRISE TO OBTAIN AN ADVANTAGE OVER COMPETITORS WITHIN PLANTS BREEDER’S RIGHT THE SAME INDUSTRY OR PROFESSION. INTEGRATED CIRCUIT LAYOUT IN SOME JURISDICTIONS SUCH SECRETS ARE REFERRED TO TRADITIONAL AS "CONFIDENTIAL INFORMATION", WHILE IN OTHERS THEY ARE A SUBSET OR EXAMPLE OF CONFIDENTIAL KNOWLEDGE… INFORMATION. AN EXAMPLE OF THIS WOULD BE THE FORMULA OR RECIPE OF A PRODUCT E.G. COCA COLA.

REGISTRATION OF TRADE SECRETS IS AVAILABLE IN SOME COUNTRIES.

What IP right do you believe is the most important for you to protect?

1) Patent for invention/Petty patent? 2) Design patent? 3) Trademark? 4) Copyright? 5) Other IP (ex: trade secret)?

• Challenge 2: Prioritization

Startups usually do not prioritize IP as they are confronted with other priorities such as: - Developing a proof of concept/prototype; - Product launch/ marketing expenses; - Human resources; - Finding suitable business partners/investors etc.; - And making profits!

• Challenge 3: Costs IP can be expensive: example of trademark costs in ASEAN for one trademark

REPORTING OF FOR ONE MARK IN ONE PROVISION FEES FOR FILING PUBLICATION AND TOTAL CLASS APPLICATION PAYMENT OF REGISTRATION FEES THAILAND 385 115 500

PHILIPPINES 650 550 1,200 INDONESIA 880 330 1,210 LAOS 450 200 650 CAMBODIA 560 380 940 MYANMAR 950 Included 950 VIETNAM 650 120 770 SINGAPORE 850 450 1,300 MALAYSIA 850 400 1,250 BRUNEI 975 805 1,780

TOTAL FEES (excl. VAT 7%) USD 7,200 USD 3,350 USD 10,550

• Challenge 3: Costs

For patents, costs are much higher and in average of 3,000 USD per country (excluding annuities…)

Copyright recordation is cheap (budget of 700 USD for an international protection under the Berne Convention- however protection may not be available everywhere: ex: Cambodia).

It is essential to find a budget that suits your immediate and longer term protection needs as well as someone who understands your business plan.

Spending a lot is not necessarily a sign of a healthy business, spending nothing does not look good either.

• Challenge 4: Lack of IP strategy

Startups tend to underestimate the importance of a sound IP strategy. This can be very costly:

Ex of common mistakes: - Launching a product/disclosing an invention or design before a patent is filed means no future exclusivity; - Starting a brand without checking availability or getting a registrability opinion; - Forgetting essential contracts to secure confidentiality or to trace ownership of IP rights, especially copyright (ex: the Winklevoss twins/Facebook); - Missing opportunities to license/sell IP assets; - Turning off potential investors: Investors more likely to invest when IP is well managed.

Thumb rule: The more IP is central to your business, the more resources you need to direct to protect it.

• Challenge 5: Is protection really available?

It is a mistake to consider than no protection is available: Read summaries of thousand of court decisions and not just the newspapers.

In fact, ASEAN countries (except Myanmar) have quite robust IP protection legal frameworks.

But there are specificities you must know about and a few shortcomings especially when it comes to enforcement.

Knowing how to mitigate shortcomings is what will bring you ahead of your competitors.

See: http://www.southeastasia-iprhelpdesk.eu/en/content/helpdesk-guides

• Challenge 5: Is protection really available?

ENFORCEMENT SE Asia is clearly a hub for moving fakes: - Relaxed “rule of law” or no law (Myanmar) - Lack of training/means of enforcement authorities - Geography: land route from China to Singapore - Smuggling routes developed over centuries (narcotics, human smuggling, arms, contraband) - Systemic corruption - Slave and cheap labor - No criminal liability for possessing counterfeits if no commercial intend.

Start-ups usually collapse not because of counterfeiting (it usually helps them to grow) but because they fail to protect their IP in the first place.

• Challenge 6: IP valuation

Few startups actually know how much their IP is worth. Why not try to value it?

- IP valuation can help you make the right strategic decisions (ex: before selling/acquiring business, going into a JV, bringing investors/shareholders, licensing/franchising etc.) - IP assets can be used as security/collateral against grants/loans - IP assets can provide a mean for tax optimization (tax credits, increase in equity etc.)

What are the biggest challenges for your startup?

1) Identifying IP? 2) Prioritization? 3) Protection costs? 4) Building an IP strategy? 5) Valuation of my IP assets?

 IDENTIFY, PRIORITIZE AND PROTECT YOUR IP RIGHTS

IP RIGHTS GIVE YOU AN EXCLUSIVE RIGHT TO SELL, PROPOSE FOR SALE, IMPORT/ EXPORT, USE AND/OR MANUFACTURE THE PROTECTED IP ASSET.

REMEMBER THAT YOU CAN CHOOSE TO EXPLOIT SUCH EXCLUSIVITY DIRECTLY (EX: SALE OF YOUR PRODUCTS/SERVICES INCORPORATING YOUR IP ASSETS) OR TO LICENSE/FRANCHISE/COMMERCIALIZE YOUR IP ASSETS

 CHECK FOR CHEAPEST PROTECTION OPTIONS (EX: INTERNATIONAL TRADEMARK AND PATENT (PCT), COPYRIGHT AND CONTRACTS)

 CHECK AVAILABILITY BEFORE USE AND FREEDOM TO OPERATE

 PROTECT CONFIDENTIALITY AND BEWARE OF PUBLIC DISLOSURE. MAKE USE OF NDAs AND CHECKS PROTECTION BEFORE ATTENDING FAIRS ETC

 KNOW WHO OWNS WHAT AND MAKE SURE IT IS WELL UNDERSTOOD AND RECORDED. OWNERSHIP IS DETERMINED BY EMPLOYEE AGREEMENTS, INVENTION LOGS, SHAREHOLDER AGREEMENTS ETC.

ANYTHING THAT WILL HELP ESTABLISH OWNERSHIP OF INTAGIBLE ASSETS IS BETTER THAN NOTHING.

 DO NOT NEGLECT CONTRACTUAL PROTECTION (LICENSE AGREEMENTS IN/OUT,, EMPLOYMENT AGREEMENTS, MANUFACTURE AND DISTRIBUTION AGREEMENTS, STRATEGIC PARTNERSHIP AGREEMENTS, R&D AGREEMENTS, JV AGREEMENTS ETC.)

 TRY PUT A VALUE ON YOUR IP ASSETS AS EARLY AS POSSIBLE AND MAKE SURE THAT YOU HAVE A CLEAR STRATEGY TO INCREASE THE VALUE OF YOUR IP ASSETS- THESE MIGHT BE VERY VALUABLE AND ATTRACTIVE FOR INVESTORS

2006- When Marc Spits meets the Thai elephant Mosha

2007- First copyright application for an elephant sculpture and first service mark in Europe for cultural events known as “ elephant parades”

Sao Paulo 2017 Bangkok 2016 Suzhou 2015 Calais 2015 Hong Kong 2014 Dana Point, California 2013 Trier-Luxembourg 2013 Hasselt 2012 Singapore 2011 Milan 2011 Copenhagen 2011 Heerlen 2011 Emmen 2010 Bergen 2010 London 2010 Amsterdam 2009 Antwerp 2008 Rotterdam 2007

2007-2016- over 1,000 elephants sculptures made (decorated by artists)

Elephant Parade grows as a social enterprise, contributed millions of EUR to charity.

Entirely build on IP- before each event- Event License Agreement- Artist Agreement

EP licenses copyright and trademark to numerous companies worldwide: manufacture agreement) for replicas and a wide range of products), distribution agreements, manufacture agreements.

EP enforces their IP rights frequently.

Brought business partner World of Delight a few years ago.

Becoming a worldwide success!

Case study 1: Elephant Parade®

http://perfumist.fr/

• 2016 Frederick Besson, founder of MIST perfumes stores in Thailand gets an idea:

https://www.youtube.com/watch?v=S-gnT_4CVxw

1) End of 2016 - French trademark application: no. 164315532

2) Early 2017 – Deed of assignments signed with individual authors/free-lancers: for source code and algorithm

3) April 2017- filing and recordation of 3 versions of copyright (IOS, Android and desktop version)

4) April 2017: raise of capital with investors and launch- application can be downloaded on App store and Google Play.

1) Make time to get smart on IP, educate yourself and avoid the “gurus”;

2) Link your IP strategy to your business objectives and re- assess periodically;

3) Periodically re-assess your strategy and vulnerability (legal & technology audit);

4) Remain flexible and open for opportunities (it is not because you have spent a lot of money in protecting your IP that your solution is the best;

5) Always remember that IP is an asset and an efficient tool to attract more business and not just a defensive tool.

? Q & A ?

Name: Mr. Franck Fougere

Firm: Ananda Intellectual Property Location: Bangkok, Thailand Email: [email protected]

www.ipr-hub.eu www.yourIPinsider.eu Channel: Helpdesk TV

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