Comparative Assessment Study of Patent and Trademark Offices in Southeast Asia Workshop

Table of Contents

Table of Contents ...... i List of Abbreviations ...... ii Table of Tables ...... v Table of Charts ...... vii PART I ...... 1 I. PROJECT INTRODUCTION ...... 2 II. PATENT AND TRADEMARK...... 3 III. A COMPARATIVE REVIEW OF PATENT AND TRADEMARK OFFICES IN SOUTHEAST ASIA ...... 11 IV. REGIONALIZATION OF IP PROCESSES ...... 20 PART II ...... 28 I. CAMBODIA ...... 29 II. INDONESIA ...... 40 III. LAOS ...... 56 IV. MALAYSIA ...... 66 V. MYANMAR ...... 81 VI. THE PHILIPPINES ...... 86 VII. SINGAPORE...... 101 VIII. THAILAND ...... 113 IX. VIETNAM ...... 127 X. PEOPLE’S REPUBLIC OF CHINA ...... 144 APPENDIX ...... 160

List of Abbreviations

AEC ASEAN Economic Community AIC Administration for Industry and Commerce, China AIPA ASEAN Intellectual Property Association AMS ASEAN Member State(s) AOTS Association for Overseas Technical Scholarship, Japan APEC-EIP Asia-Pacific Economic Cooperation - Economic Integration Program ASEAN Association of Southeast Asian Nations ASEC ASEAN Secretariat ASPEC ASEAN Patent Examination Cooperation Program AWGIPC ASEAN Working Group on Intellectual Property Cooperation BDS Business Development Services BOC Bureau of Customs, Philippines BPTT Bureau of Patents, Trademarks and Technology Transfer, Philippines BRP Patent Official Gazette, Indonesia CIPITC Central Intellectual Property and International Trade Court, Thailand CIPO Canadian Intellectual Property Office CLMV Cambodia, Laos, Myanmar and Vietnam CMC Case Management Conference CNIPR China Intellectual Property Net CPIC China Patent Information Center CTMO China Trademark Office D/IPR Department of Intellectual Property Rights, Cambodia DG Director General DGIPR Directorate General of Intellectual Property Rights, Indonesia DIP Department of Industrial Property, Cambodia DIP Department of Intellectual Property, Thailand DISM Department of Intellectual Property, Standardization and Metrology, Laos DP Dialogue Partner DSI Department of Special Investigation, Thailand EC European Commission ECAP III ASEAN Project on the Protection of Intellectual Property Rights EPC European Patent Convention EPO European Patent Office EU European Union FDI Foreign Direct Investment GAC General Administration of Customs, China GDI General Department of Industry, Cambodia GDP Gross Domestic Product GHz Gigahertz GI Geographic Indications GPI Global Patent Index GR Government Regulation HR Human Resource IDR Indonesian Rupiah

IIPMS Integrated Intellectual Property Management System, Philippines IP(R) Intellectual Property (Rights) IPAS Industrial Property Automation System, WIPO IPC International Patent Classification System IPCM Intellectual Property Corporation of Malaysia (before 2005) IPD Intellectual Property Division, DISM, Laos IPDL Intellectual Property Digital Library, Indonesia IPDL(-Patents) Industrial Property Digital Library (for Patents Project, Philippines) IPEA International Preliminary Examining Authority IPNP Intellectual Property National Policy, Indonesia IPOPHL Intellectual Property Office of the Philippines IPOS Intellectual Property Office of Singapore IPSO Intellectual Property Satellite Offices ISA International Searching Authority IT Information Technology ITMS Integrated Trademark System, Malaysia JICA Japan International Cooperation Agency JPO Japan Patent Office K.I.Asia Kenan Institute Asia Kbps Kilobit per second KHR Khmer Riel KIP Laos Kip KIPO Korean Intellectual Property Office KOICA Korean International Cooperation Agency Mbps Megabits per second MDTCC Ministry of Domestic Trade, Cooperative and Consumerism, Malaysia MIME Ministry of Industry, Mines and Energy MOST Ministry of Science and Technology, Myanmar MOST Ministry of Science and Technology, Vietnam MOU Memorandum of Understanding MSTRD Myanmar Scientific and Technological Research Department MyIPO Intellectual Property Corporation of Malaysia (after 2005) MyISS MyIPO Image Search System NAST National Authority for Science and Technology, Laos NBI National Bureau of Investigations, Philippines NCIPR National Committee on Intellectual Property Rights, Philippines NOIP National Office of Intellectual Property, Vietnam OAG Office of the Attorney General, Myanmar OHIM Office for Harmonization in the Internal Market PACSYS Patent Administration Computerized System, Philippines PAM Patent Administration Management PANTAS Patent and Trademark Administration System, Malaysia PC Personal Computer PCT Patent Cooperation Treaty PCT-EDIS PCT-Electronic Data Interchange Service PDR People’s Democratic Republic, Lao

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PhilPAT Philippine Patent Online Search System PHP Philippine Peso PM Patentmaps PNP Philippines National Police POLRI Indonesian National Police PPNS Indonesian Civil Servant Investigators PPP Purchasing Power Parity PRB Patent Re-examination Board, China PVP Plant Variety Protection R&D Research and Design RI Republic of Indonesia RM Malaysian Ringgit RMB Chinese Renminbi S&E Search and Examination S&T Science and Technology SAIC State Administration for Industry and Commerce, China SIPO State Intellectual Property Office of the People’s Republic of China SM Service Mark, Philippines STEA Science, Technology and Environment Agency, Laos THB Thai Baht TIPIC Thailand Intellectual Property Information Center TIPO Taiwan Intellectual Property Office TM Trademark TRIPS Trade Related Aspects of Intellectual Property Rights UK-IPO United Kingdom Intellectual Property Office UPOV International Union for the Protection of New Varieties of Plants USAID United States Agency for International Development USD United States Dollar USPTO United States Patent and Trademark Office VND Vietnamese Dong WAN Wide Area Network WIPO World Intellectual Property Organization WPPT WIPO Performances and Phonograms Treaty WTO World Trade Organization

Table of Tables

Table 1 Availability of Utility Model in Asian Countries ...... 8 Table 1 IP Office Financial Autonomous ...... 11 Table 2 Average Time Expected to Take to Register A Patent ...... 15 Table 3 Average Time Expected to Take to Register a Trademark ...... 17 Table 4 Enforcement and Dispute Settlement ...... 18 Table 5 Number of Examiners by Highest Degree Obtained ...... 33 Table 6 Number of Examiners by Years of Experience ...... 33 Table 7 Patent Application in Cambodia ...... 33 Table 8 Trademark Applications and Registrations in Cambodia ...... 36 Table 9 Number of DGIPR Staff in 2006 - 2010 ...... 42 Table 10 Number of Examiners by Educational Profile ...... 43 Table 11 Number of Examiners by Years of Experience ...... 43 Table 12 Patent applications received by year, broken down by domestic and foreign filers . 45 Table 13 Numbers of patent granted from 2003 to June 2010 ...... 46 Table 14 Number of patent refused and withdrawn from 2003 to June 2010 ...... 46 Table 15 Number of Application per Patent Examiner ...... 47 Table 16 Statistics on Application and Registration of Trademarks and Service Marks (2000 - 2010) ...... 50 Table 17 Number of Applications per Trademark Examiner ...... 52 Table 18 Industrial Property Division Personnel ...... 58 Table 19 Number of Examiners by Years of Experience ...... 59 Table 20 Number of Examiners by Educational Profile ...... 59 Table 21 Range of Salary Earned by Patent and Trademark Examiner ...... 59 Table 22 Lao Patent Applications and Registrations ...... 60 Table 23 Number of Application per Patent Examiner ...... 61 Table 24 Number of Trademark Applications and Registration (2005-2010) ...... 61 Table 25 Number of Application per Trademark Examiner ...... 62 Table 26 Number of Staff by Type ...... 69 Table 27 Revenue and Expenditure of MyIPO (RM) ...... 69 Table 28 Number of Patent Examiners by Educational Profile ...... 70 Table 29 Number of Examiners by Years of Experience ...... 70 Table 30 Application and Granted Patents and Utility Innovations (2001 - 2010) ...... 71 Table 31 PCT Applications Received from August 2006 to 2010 ...... 72 Table 32 Patents Granted Based on Field of Technology ...... 72 Table 33 Number of Applications per Patent Examiner ...... 74 Table 34 Trademark Application and Registration in Malaysia ...... 76 Table 35 Number of Applications per Trademark Examiner ...... 77 Table 36 Number of staffs in the IP section ...... 82 Table 37 Statistics on Application and Registration of Trademarks (2005 - 2010) ...... 83 Table 38 Number of IPOP staff ...... 89 Table 39 Number of Examiners by Educational Profile ...... 90 Table 40 Number of Examiners by Years of Experience ...... 90 Table 41 Applications and Granted Inventions, 2000 - 2010 ...... 91 Table 42 Applications and granted utility models from 2005 to 2010 ...... 92 Table 43 Number of Application per Patent Examiner ...... 95 Table 44 Trademark Application and Registration by Origin ...... 95 Table 45 Refused and Withdrawn Trademark Applications by Origin ...... 96 Table 46 Number of Application per Trademark Examiner ...... 97 v

Table 47 Annual IT Budget during 2007-2009...... 99 Table 48 IPOS Income and Expense (USD) ...... 102 Table 49 Applications and Granted Patents (2005 to 2009) ...... 104 Table 50 Top Five Domestic and Foreign Filers According to Patent Application in 2009 . 104 Table 51 Patents granted based on International Patent Classification System (IPC) ...... 105 Table 52 Number of Trademark Applications and Registrations in Singapore ...... 107 Table 53 Percentage of Local Based and Foreign Based Trademark Application ...... 107 Table 54 Budget of the DIP by Type (THB) ...... 115 Table 55 Revenue and Budget of the DIP ...... 116 Table 56 Number of Personnel in the DIP ...... 116 Table 57 Number of Examiners by Educational Profile ...... 117 Table 58 Number of Examiners by Years of Experience ...... 117 Table 59 Number of Patent Application in Thailand ...... 118 Table 60 Number of Patent Registration in Thailand ...... 118 Table 61 Statistics of Petty Patent Application and Granted ...... 119 Table 62 Trademark Application and Registration in Thailand ...... 122 Table 63 Type and Number of Staff in the NOIP ...... 131 Table 64 Number of Examiners by Educational Profile ...... 132 Table 65 Number of Examiners by Years of Experience ...... 132 Table 66 Applications and Granted Patents (2001 – 2010) ...... 133 Table 67 Applications and Granted Utility Solutions (2001 – 2010) ...... 133 Table 68 Number of Applications per Patent Examiner ...... 135 Table 69 Number of applications by type (foreign and domestic) from 2000 onward ...... 138 Table 70 Number of Applications per Trademark Examiner ...... 139 Table 71 Applications and granted patents (2006 – 2010) ...... 148 Table 72 Distribution of domestic and foreign patent applications according to service and non-service in 2009 ...... 149 Table 73 Top five domestic and foreign enterprises according to patent application in 2009 ...... 150 Table 74 Total Trademark Applications and Registration by Residents and Non-residents (2000-2009)...... 153

Table of Charts

Chart 1 Patent Examiner Workload ...... 12 Chart 2 Patent Applications per Examiner ...... 13 Chart 3 Patent Examiner Educations ...... 13 Chart 4 Patent Examiner Years of Experience ...... 14 Chart 5 Trademark Examiner Workload ...... 15 Chart 6 Trademark Applications per Examiner ...... 16 Chart 7 Trademark Examiner Educations ...... 16 Chart 8 Trademark Examiner Years of Experience ...... 17 Chart 9 Organization Chart ...... 32 Chart 10 Cambodia Patent and Utility Model Procedure ...... 35 Chart 11 Numbers of patent application based on country (1991-2009) ...... 45 Chart 12 Procedure of Patent Application ...... 48 Chart 13 Procedure of Trademark Application (Based on Law No.15 Year 2001 on Trademark) ...... 51 Chart 14 Organization Chart of DISM...... 57 Chart 15 Lao Trademark Procedures ...... 63 Chart 16 Structure of Intellectual Property Corporation of Malaysia ...... 68 Chart 17 Top Five Countries for Patent and Utility Innovation Applications in 2009 ...... 73 Chart 18 Patent Registration Procedure in Malaysia ...... 75 Chart 19 Malaysia Trademark Application Procedure ...... 77 Chart 20 Structure of the Intellectual Property Office of the Philippines ...... 89 Chart 21 Patent Application Flowchart ...... 94 Chart 22 Philippines Trademark Procedures ...... 98 Chart 23 Five Leading Countries Filing Patent Applications in Singapore ...... 104 Chart 24 Singapore Trademark Procedures ...... 110 Chart 25 Structure of the Thai Department of Intellectual Property ...... 115 Chart 26 Flow Chart of Patent for Invention Application ...... 120 Chart 27 Trademark Procedure ...... 124 Chart 28 Organization chart of the NOIP ...... 130 Chart 29 Top Five Countries for Patent and Utility Solution Applications in 2010 ...... 134 Chart 30 Patent procedures ...... 137 Chart 31 Vietnam’s Trademarks Registration Procedure ...... 140 Chart 32 Structure of China Trademark Office ...... 147 Chart 33 Ten leading countries filing patent applications in China...... 149 Chart 34 Distribution of domestic patent applications according to service category in 2009 ...... 150 Chart 35 Chinese Patent Granting Procedure (as of 2001) ...... 152 Chart 36 China Trademark Registration Procedures ...... 156

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PART I

INTRODUCTION & COMPARATIVE REVIEW

I. PROJECT INTRODUCTION

Kenan Institute Asia (K.I.Asia), in collaboration with Chulalongkorn University’s Intellectual Property Institute and the law firm of Tilleke and Gibbins International Ltd., has updated and expanded its “Comparative Assessment Study of Patent Offices in Southeast Asia” under a joint project agreement with the USPTO. The study focuses on the process of trademark and patenting registration across IP offices in Southeast Asia, and assesses each office’s operational and administrative capacity. The study includes the following ten countries: Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The overall goal of the study is to help strengthen patenting and trademark registration processes in the region by providing comparable country-specific information in the following areas:

 Most recent information on patent and trademark office performance, such as size of the application backlog and the number of patent applications, grants, withdrawals and rejections  Patent and trademark registration procedures, including the use of information technology and search tools, intellectual property rights (IPR) enforcement mechanisms, and recommendations for improvement  Compile a detailed profile on each country’s patent and trademark registration process, including who actually examines the applications, whether or not there is protection against conflicts of interest, how long each step in the process takes, and who makes the key decisions in the process  Recommendations on ways to improve both national and regional intellectual property (IP) processes The methodologies of the study include desk research, questionnaire surveys to intellectual property IP offices, interviews with IP officials, and a workshop. K.I.Asia hosted a workshop for 30 participants comprising regional IP officials, private sector representatives, other government officials and academia. Additional information was received through detailed questionnaires completed by 12 regional IP law firms.

II. PATENT AND TRADEMARK

Patent

Patent Process

A patent gives an inventor exclusive rights over his invention. These exclusive rights include the right to produce, use, sell, license, and import the invention during the term of the patent. To secure a patent, an inventor must submit a patent application to the appropriate government administrators for each jurisdiction in which he wants patent protection. This is usually the national IP office or patent office. In most countries, the term of a patent is 20 years, beginning the day the patent application is submitted to a patent office. The date of application is often referred to as the patent filing date. In return for the exclusive economic rights patents provide, the patent applicant must disclose in his application to the patent office how the invention works in a manner sufficient to allow others to replicate the invention. Within the patent community, the entire patent application process is referred to as “patent prosecution.”

A patent office, in most cases, conducts two examinations of the patent application – a formal examination and a substantive examination. The formal examination is simply a review of the application to ensure all information and documentation required within an application has been provided. At some point after the formal examination is complete, a substantive examination takes place. A patent applicant wishing to secure patent protection in more than one country generally has the choice between two different procedures: the Paris Convention route or the Patent Cooperation Treaty (PCT) route.

The Paris Convention route is available to applicants who are nationals or residents of a country that is party to the Paris Convention and who seek to secure patent protection in Paris Convention member countries. The Paris Convention route provides that once a patent application is filed in a Paris Convention member country, the applicant may claim the filing date of this first patent application in subsequent applications to other Paris Convention member countries, so long as subsequent applications are filed within a year of the first application filing date. The applicant still has to file his applications using each national language and follow the patent procedure rules of each country. The Paris Convention route gives applicants time to decide on those jurisdictions in which they will ultimately seek patent protection. In practice, the Paris Convention route is viewed as the most efficient route when an inventor seeks patent protection in only a few countries. In principle, patent prosecution starts without much delay and the patent is granted rather rapidly in the countries where protection is sought, provided that the particular patent office is not suffering from a backlog of patents.

The PCT route was introduced in 1973 and, similar to the Paris Convention route, is available to applicants who are nationals or residents of one of the PCT Contracting States and who want to secure patent protection in other PCT Contracting States. The PCT process has two primary phases – an international phase and a national phase.

During the international phase, an applicant submits his international patent application to a patent office designated as a receiving office. The international application will be forwarded to an International Search Authority (ISA) for prior art search and report. There are only a

few patent offices that have been designated ISAs, and they tend to be the largest patent offices with substantial experience in examining and granting patents. In the international patent application, the applicant designates those PCT member countries in which he would like to seek patent protection. The patent office acting as the ISA produces an international prior art search report and a written opinion (Chapter I) which is a preliminary and non- binding opinion on whether the invention appears to meet the patentability criteria in light of the search report results. Subsequently, the applicant may request an international preliminary examination (Chapter II), which is a second evaluation of the potential patentability of the invention, using the same standards on which the written opinion of the ISA was based. If the applicant wishes to make amendments to the international application in order to overcome documents identified in the search report and conclusions made in the written opinion of the ISA, international preliminary examination provides the only possibility to actively participate in the examination process and potentially influence the findings of the examiner before entering the national phase. At the end of the procedure, an international preliminary report on patentability (IPRP Chapter II) will be issued. The applicant may also file a PCT application at the Receiving Office of the WIPO in Geneva, which is also designated an ISA.

The duration of the international phase varies from twenty-one to thirty-one months depending on the specific services requested and the efficiency of the ISA, and can be extended by individual countries by one or two months. At the end of the international phase, the applicant enters the national phase and has to choose definitely the countries where he will file the patent application. From this point, the PCT patent application is treated as any other patent application, and will thus follow the national procedure for receiving a national patent.

The purpose of the PCT route is to give the applicant an opportunity to obtain a good assessment of his application through the international search report, the written opinion and/or the international preliminary examination, before deciding to apply and pay requisite application fees and other costs in multiple jurisdictions. Additionally, the long period afforded by the PCT route gives the applicant more time to develop and market his invention.

Criteria to Receive a Patent

Given the powerful economic rights a patent provides, it is important to ensure the decision to grant a patent be fully justifiable and properly made. Thus, the substantive examination looks to ensure a patent application meets three strict tests – novelty, inventive step, and capable of industrial application.

The “novelty” criterion aims to validate that the invention is new. It is only a new invention, which adds to the stock of technology, that warrants the exclusive economic rights that patents afford. An invention already in existence and known to the public is by definition not new and not, therefor, patentable. While “novelty” requires that an invention simply be new, “inventive step” goes one step further. To past the test of “inventive step”, an invention must embody a significant technological leap. That is, the invention must entail an adequately significant advance in a field of technology whereby someone already familiar with the state of the art of the technological field could not have easily made the invention. Lastly, as the term of the final criterion implies, “capable of industrial application” requires that the invention have some industrial use. The terms “inventive step” and “capable of industrial

application” may be deemed by certain countries to be synonymous with the terms “non- obvious” and “useful,” respectively.

Resources Required by a Patent Office

To adequately examine each patent application against the triple test criteria, a patent office must be equipped with myriad resources. It must be able to staff enough patent examiners to handle the number of patent applications it receives, it must assure that those examiners have adequate training and familiarity with the fields of technology covered in patent applications, and it must be able to provide the extensive resources necessary for those examiners to perform their duties.

Within the last ten years, there has been a dramatic rise in the number of patent application filings around the world. The escalation in applications has, in turn, dramatically increased patent pendency – that is, the time it takes a patent office to respond to patent applications. Growing pendency periods have caused frustrated users to lose confidence in the patent system. Countries that choose to conduct full examinations of patent applications should be prepared to take the necessary steps to ensure their patent offices are adequately staffed. Ideally, all patent examiners should have appropriate qualifications, requiring many years of both academic and professional training. A patent examiner should have, at minimum, an undergraduate degree in a scientific or engineering field, although master’s degrees or higher are preferable; indeed, some highly specialized technical areas such as genetic engineering may require examiners with MS or PhD degrees. In order to maintain their technological knowledge, examiners should regularly attend conferences and seminars in their technological fields and regularly share their examination experiences with colleagues. They should also handle a minimum of thirty patent applications per year in the same technological field, in order to best cultivate expertise in one area.1 Patent examiners should also receive extensive training in the IP Law of their country and in examination practices and procedures.

In addition to proper training, patent examiners require access to substantial electronic resources. As previously mentioned, the tests of novelty and inventive step require patent examiners to compare the invention for which patent protection is sought with any similar prior inventions in order to ensure the invention is new and that it advances sufficiently beyond the current state of technology. Within the patent community, the body of existing technology is referred to as prior art, and the process of identifying the body of existing technology relevant to any particular invention is called a prior art search. Given its relevance to patenting prosecution, and to two of the three main criteria in particular, many consider the prior art search the most essential step in the patent examination process.

In order to perform a prior art search, patent examiners must have access to all prior art records. Toward this end, patent offices first search previously patented inventions. More advanced patent offices have developed bibliographic and full-text electronic databases of their issued patents, which may include patents pending examination and/or approval. Often, these databases can be accessed freely through the internet (e.g. the USPTO’s Patent Full- Text and Image Database, the EPO’s Espacenet, and the JPO’s IPDL). Additionally, examiners review secondary, non-patent sources including scientific and technical periodicals, conference reports and commercial scientific databases.

1 Comparative Assessment Study of Patent Offices in Southeast Asia, Kenan Institute Asia, 2007 5

Between patent and non-patent prior art sources, there are quite literally millions of documents that patent examiners must review in order to identify relevant prior art for any particular patent application. Thus, even with the aid of modern electronic tools, the search for prior art can be a long and arduous process. To facilitate prior art searches, patent offices have developed sophisticated search tools. For instance, the EPO has created a prior art search system called EPOQUE, a query system that allows the EPO’s examiners to thoroughly and efficiently scour EPO’s patent and non-patent databases. In order to assist other countries in conducting prior art searches, the EPO has licensed use of the EPOQUE system to a number of non-European countries, including China, Mexico and Brazil. Recently, EPO introduced a new online product, the Global Patent Index (GPI), which makes available collections from Espacenet and additional information, such as real-time legal status data, enabling examiners to search more than 70 million patent records. Currently, examiners must search a minimum of four office databases: EPO, USPTO, JPO, and SIPO. Thailand’s Department of Intellectual Property (DIP) has suggested that a consolidated platform comprising the four major databases would greatly facilitate smaller offices’ prior art searches.

Access to electronic prior art databases necessarily requires patent offices to provide a modern electronic infrastructure. This includes computers with processing speeds sufficient to run large applications, networked computer systems, patent application management software, and high speed internet access.

Lastly, modern patent offices should be equipped with automated Patent Administration Management (PAM) systems. The basic functions of a PAM system are to provide automation in filing, procedure management (i.e. a database management system), archiving, publication, file inspection and access to publications. All these functions should be accessible online to both internal and external parties. PAM systems provide transparency in the patent prosecution process and aid in the efficient review and examination of patent applications.

Impact of Poor Patent Administration

As mentioned, patents provide an incentive to invest in research and development, either directly or through international technology flows. Businesses rely on patents to protect such investments. If a competitor were to attempt exploitation of a patented technology, the patent holder could file suit in a court of law to prevent such unauthorized use, seek damages and prevent further infringement. While the ability of the patent holder to enforce his right is generally tied to the capability and efficiency of the court system in the country in which the patent right is granted, the strength and validity of a patent are first derived from the quality of the examination performed.

A well-functioning patent administration requires substantial resources; without which, the quality of patents issued will invariably suffer. While all patent offices have some sort of prior art collection, such collections are relatively small in many of the world’s patent offices, comprised mainly of the patents issued in that country alone. Often, patent offices have very limited computer resources, if any, which impedes their ability to access internet or electronic databases. Additionally, most patent offices have difficulties recruiting, training, and retaining qualified patent examination staff. Patent offices attempting to perform prior art

searches with such limited resources cannot adequately compare new inventions to existing technologies, resulting in the issuance of patents that do not warrant patent protection. Furthermore, if a patent office is understaffed, the time it takes to issue a patent – referred to as patent pendency – may be significantly extended. Given the quick pace at which technology is developed and the fact that the term of a patent begins when the application is submitted, the longer the pendency, the less time an inventor has to make use of his patent once it is finally issued.

When a patent office issues poor quality patents or suffers from substantial periods of patent pendency, assurance of the enforceability of its patents is reduced. In larger, more lucrative markets, poor patent quality and high pendency periods mean a likely increase in patent litigation, as competing firms, unwilling to give up key markets, rely on the courts to settle their patent problems. This in turn may have a chilling effect upon other innovating firms, dissuading them from researching technologies that might put them at risk of being sued. In smaller markets, this chilling effect is even more pronounced, causing companies to altogether avoid making risky and unprotected investments in local research and development and/or technology transfer efforts. Of course, any reduction in research and development investment, whether in a large or small country, will prove detrimental to long-run economic growth.

As a means to reduce the costs and administrative burdens associated with patent administration, some blocks of countries have banned together to establish regional patent offices. These include the Eurasian Patent Organization (composed of the former Soviet Republics, including Russia), the African Intellectual Property Organization (OAPI: composed of French speaking African countries), the African Regional Industrial Property Organization (ARIPO: composed of English speaking African countries) and the EPO, which provides patent administration for 31 European countries. As established by international agreements authorizing each respective regional patent office, these offices may perform all patent administration tasks for their client countries, including receipt of application, collection of fees, and performance of formal and substantive examinations. In order to best maintain this framework, countries participating in a particular regional patent office must have relatively similar substantive and procedural patent laws. Furthermore, the regional patent office itself should utilize a common operational language (or languages).

Utility Models

Utility models, also known as industrial models and petty patents, differ from full patents not only in the requirements imposed upon the potential owner, but also in the extent to which their protection is recognized across the international IP community. According to a Singapore IP publication, the utility model “is not an accepted or clearly defined legal concept…[indeed] there is no global acceptance of the term…[essentially] utility model protection is accorded, cheaply and quickly, to inventions or innovations, many of which cannot gain protection under the patent regime.”2

Regardless of the differing names and specific natures of utility models across disparate IP regimes, three general characteristics of utility models are common internationally:

1. “All utility model laws confer exclusive rights to the proprietor of the right;

2 Would Singapore Benefit from a Utility Model Regime? Singapore Intellectual Property Academy, April 2005 7

2. Novelty is a criterion for registration in all utility model systems; and 3. Substantive examination is generally not a requirement for registration.”3

However, most ASEAN countries do require substantive examination for registration. Table 1 Availability of Utility Model in Asian Countries Country Availability of Examination Protection Utility Model Cambodia Yes Formal +Substantive 7 years from filing China Yes Preliminary 10 years from filing Hong Kong Yes Formal 8 years from filing India No Indonesia Yes Formal+ Substantive 10 years from filing Japan Yes Preliminary 10 years from filing South Korea Yes Formal + Substantive 10 years from filing Laos Yes Formal + Substantive 7 years from filing Malaysia Yes Formal + Substantive 5 years from filing; two 5 year extensions for a total of up to 15 years Philippines Yes Formal 7 years from filing Singapore No Taiwan Yes Formal 10 years from filing Thailand Yes Formal 10 years from filing UAE Yes Formal 10 years from filing Vietnam Yes Formal; technical 10 years from filing examination may be requested within 36 months of filing

Utility models serve to protect inventions (generally products, rather than processes or uses4) that may be unpatentable under the patent system’s strict substantive examination requirements, but which nonetheless are IP assets, representing significant investments (e.g. time, resources, etc.) by their inventors. This protection is inferior to traditional patent protection in both length and force of coverage (in Thailand, for example, protection for a petty patent lasts ten years from the filing date, and infringers may be fined no more than THB 200,000 and/or imprisoned for no more than one year, whereas patent protection lasts for twenty years, and infringers may be fined no more than THB 400,000 and/or imprisoned for no more than two years), and is more easily, cheaply and conveniently achieved (for a Thai petty patent, neither substantive examination nor proof of inventive step is required). Utility models, then, appear especially appropriate as a means of protecting fledgling firms that invest in innovation by protecting these firms from would-be free-rider competitors who, without utility model protection, would be able to copy the inventor firm’s novel improvement without investing in its own R&D, thus expropriating the rightful reward of its competitor.5

On the other hand, critics of utility models point to various drawbacks inherent to the “second tier” protection they provide; central among these is the concern that second tier protection via second tier examination necessarily entails poor quality, inefficient patents. For

3 Ibid. 4 http://www.sepaf.se/web/page.aspx?refid=141. 5 Would Singapore Benefit from a Utility Model Regime? Singapore Intellectual Property Academy, April 2005. 8

example, as no examination is required, one firm may potentially apply (knowingly or otherwise) for utility model protection for a minor invention already patented by another foreign firm. Some US companies in China complain that utility models are often asserted against the rightful patent owner, causing them to go to the time and expense of defending their rights in Chinese courts. Thailand has faced similar problems whereby petty patent holders misuse their protections, attempting to enforce disqualified petty patent rights against competitors. In order to address this issue, the Department of Intellectual Property (DIP) has proposed that any petty holder who wishes to enforce his rights against a third party must first request substantive examination to ensure that his petty patent meets all requirements (i.e. whether the invention to which the petty patent is granted corresponds to the characteristics of the petty patentable invention).

Nonetheless, at least within each country, and assuming sufficient laws are in place to distinguish between different types of patents, utility models, and thus multi-tiered patent systems, may well serve to benefit the system overall by establishing explicit differences in both application requirements and protective rights between different level patents, effectively clarifying owners’ expectations and promoting appropriate, efficient arbitration processes to address infringement disputes.

Trademark

Trademark Process

As a distinctive word, phrase, symbol, sign, or combination thereof, a trademark provides protection to its owner by ensuring his or her exclusive right to use it to identify and distinguish the source of goods and services of one party from those of others. The protection hampers infringement attempts and allows trademark owners to collect all goodwill and financial profit from their goods and/or services. In most countries, the term of a trademark’s protection is 10 years, and can be renewed indefinitely, so long as the mark continues to be in use.

Compared to the patent process, trademark registration is much less complicated and takes less time to complete. Depending on each office’s specific procedures, a trademark application usually goes through one examination, typically called a substantive examination, in which the mark is checked for distinctiveness, satisfying certain conditions, and conforming to national laws. Before filing an application, applicants are encouraged to search official trademark databases available within their country.

An applicant seeking trademark protection in more than one country may consider applying through the Madrid system. The system was established under the Madrid Agreement (1891) and the Madrid Protocol (1989), and is administered by the International Bureau of WIPO. A new application filed at a national office that is a member of the Madrid system can designate other member countries in which he seeks trademark protection. Each of the designated member countries then determines whether, under its national trademark laws, the trademark owner is entitled to an extension of protection. An owner of an existing trademark registration in a member country can also request to extend protection to other member countries as desired and properly designated. The mechanism allows for a single administrative process in which a trademark application can be registered with one set of fees, and renewed across all applicable jurisdictions.

Criteria to Receive a Trademark

To be granted protection, a mark must be distinctive in its own design, word, or both. It cannot be the same as, or similar to, any marks already granted to other trademark owners for the same or related goods or services. The mark must be unique to the extent that consumers will not be likely to confuse it with other marks.

Resources Required by a Trademark Office

National trademark offices conduct searches and examinations to determine whether the mark would conflict with the existing trademark rights of another party, using their own databases of registered trademarks. Many offices also make these databases available to the public. With numerous records incorporating graphics, a good trademark database system requires sufficient storage capabilities. Furthermore, a well-created system must be efficient, meaning that it can support the key functions of modifying, adding, deleting, searching, looking up, and browsing entries. Beyond computers with processing speeds sufficient to run large applications and high-speed internet access, a powerful server is also necessary to handle large numbers of process requests in a timely manner.

More importantly, due to a rapid increase in applications (usually following positive economic growth) there must be an adequate number of trademark examiners to process increasing workloads. Trademark examiners require fewer educational qualifications and less technical knowledge than do their counterparts in the patent office; a bachelor’s degree in a non-science field is typically sufficient. In fact, some successful trademark offices employ a number of competent examiners with only high school certificates. Nevertheless, computer and English language skills are necessary to utilize the computerized equipment used for searches and examinations.

Impact of poor trademark administration

Trademark protection is enforced upon registration approval, after which the protection begins either retroactively on the filing date, if the country uses the filing date to start, or else on the date of registration. Consequently, poor trademark administration, especially when the latter case prevails, can lead to financial losses. Since a trademark is one of the most valuable assets that identify the source of a product, a distinctive mark can help a product stand out among competing goods. In those countries that use the first-to-file system, after a trademark application is filed, it can take years for the trademark to be issued. During that time, the applicant cannot stop others from using the trademark he has applied to register and protect. Thus, a delay in the registration process could put the mark at risk of being claimed or registered by a rogue third party, resulting in the loss of marketing investments and great effort by the original applicant. In such countries, manufacturers are encouraged to register appropriate marks before introducing their products to market. However, in many jurisdictions that subscribe to the first-to-file system, certain protections for well-known marks may be sought, regardless of whether they are registered.

III. A COMPARATIVE REVIEW OF PATENT AND TRADEMARK OFFICES IN SOUTHEAST ASIA

Many ASEAN countries have made substantial progress in developing the capacity of their patent and trademark offices since the review in 2007. With technical and financial assistance from international donors such as the EPO, JPO, WIPO, and USPTO, countries such as Malaysia, Philippines and Vietnam have significantly upgraded and improved their patent administration systems. These improvements include procedural adjustments, enhanced IT databases and infrastructures, and significant investments in human resources. IP administration development efforts in Myanmar and Laos, however, still lag behind the rest of ASEAN, and will greatly benefit from bilateral support from international donors. (See the country reports.)

For many developing countries, inherent difficulties in securing necessary resources and technical expertise are seen as partial explanations for their IP administrations’ slow improvement. Limitations arising from their status as governmental agencies lead to a number of barriers to heightened efficiency, especially the inability to increase manpower and operating budgets. In fact, most of the ASEAN Member States’ (AMS) IP development initiatives have faced similar obstacles. A comparative review of these offices’ capacities and performance is provided below.

Autonomy of IP Offices

Autonomous IP offices have several advantages over government-operated offices. First, an autonomous office can set a compensation structure that is more attractive to potential employees currently in the private sector. Second, as there is no central government control over the number of staff, offices that are financially sound can implement flexible hiring policies. Third, the ability to manage its own budget and an absence of bureaucratic red tape mean faster improvements can occur in key areas, such as IT and capacity building.

Only three IP offices in Southeast Asia are fully financially autonomous: Malaysia, Philippines, and Singapore. Vietnam’s office is semi-autonomous, allowed to keep 25% of its fee revenues. (Table 2)

Table 2 IP Office Financial Autonomous Fully Autonomous Semi-Autonomous Not Autonomous Malaysia Vietnam Cambodia Philippines China Singapore Laos Indonesia Myanmar Thailand

Many of the self-sustaining offices are still under the supervision of a ministry. The Malaysian Intellectual Property Organization (MyIPO) reports to the Ministry of Domestic Trade, while the Intellectual Property Office of Singapore (IPOS) is under the Ministry of Law. The National Office of Intellectual Property (NOIP) is under the Ministry of Science,

Technology and Environment, and does not have the freedom to hire freely or to independently determine salary scales.

Financial autonomy for an IP office is not necessarily instant. Usually, a central government provides subsidies, at a progressively reduced rate, to a newly autonomous IP office for at least five years until the office can be self-sustaining via revenue-generating activities, such as filing fees, book selling, and IP consultation.

Patent Offices

Chart 1 depicts three dimensions of information from each IP office: number of patent applications (size of the bubble), number of patent examiners, and patent applications per examiner in 2010. Ideally, an IP office with a large bubble size located at the bottom right corner of the graph is equipped with an adequate number of patent examiners and should have fewer problems with application backlogs. Accordingly, Malaysia and Indonesia’s abilities to handle large numbers of patent applications are acceptable, with about 70-80 examiners handling 5,500-6,500 applications in 2010. Thailand, on the other hand, urgently needs more patent examiners, with the number of applications per examiner at 255. (Chart 2)

Chart 1 Patent Examiner Workload

300 Thailand**; 5,857 250 apps 200 Philippines; 4,005 Malaysia; 6,463 150 apps apps 100 Cambodia; 104 apps

Examiner Examiner in 2010 50 Laos; 20 apps Vietnam; 3,666 Indonesia; 5,652 Patent Patent Applications per 0 apps apps -20 -50 0 20 40 60 80 100 Number of Patent Examiners

Source: Kenan Institute Asia

Chart 2 Patent Applications per Examiner

Patent Examiners Patent Apps per Examiner

300 255

200

80 100 52 71 79 82 77 2 52 69 Examiners, 2 10 53

0 23

Laos

Cambodia

Applications Applications examiner per per year

Indonesia

Malaysia

Vietnam

Thailand* Philippines

Note: Note: Thailand * - Only invention patent applications of the 2009 data, excluding design and petty patents. Number of examiners includes assistants. Data not available for Myanmar, China, and Singapore. Source: Kenan Institute Asia

In order to perform their jobs well, patent examiners need to have relevant knowledge and experience. Chart 3 shows that patent examiners in most countries, except Laos, have at least a degree in science. Many of those who have a master’s degree in art as their highest degrees did their bachelor’s degrees in a science field.

Chart 3 Patent Examiner Educations

100% 1.4 6.3 5.7 2.5 11.9 21.1 28.0 80% 20.8 2.8 6.0 60% 4.0

40%

20% 73.6 0% 74.6 100.0 91.1 62.0 88.1 Percentage Percentage Number of of Examiners Indonesia Laos Malaysia Philippines Thailand Vietnam B.S. B.A. M.S. M.A Ph.D in Science Ph.D. in Non-Sci

Noted: Data not available for Cambodia, China, Myanmar, and Singapore Source: Kenan Institute Asia

Chart 4 Patent Examiner Years of Experience 3.8 1.9 Vietnam 67.9 17.0 9.4

Thailand 64.3 35.7

Philippines 44.0 16.0 6.0 34.0

Malaysia 39.2 40.5 5.1 15.2

Laos 50.0 50.0

Indonesia 15.5 7.0 19.7 57.7

Cambodia 100.0

0% 20% 40% 60% 80% 100% Percentage of Total Number of Examiners < 5 years 5-10 years 10-15 years 15-20 years > 20 years

Noted: Data not available for Myanmar, China, and Singapore Source: Kenan Institute Asia

Many years of experience generally equate to highly skilled examiners, who should be able to work faster, and with greater accuracy, than their juniors. These senior examiners are also able to train junior staff. Chart 4 shows that Indonesia and Philippines have higher percentages of highly skilled examiners (more than 60% of the total number of examiners have more than ten years of experience), while the majority of patent examiners in Cambodia, Thailand and Vietnam have less than five years of experience. On the contrary, however, just because examiners have more years of experience does not necessarily mean they are more qualified. Some experienced examiners are out of touch with recent trends in technology, especially in newly emerging fields. New hires with relevant training are recommended for work in these new technologies.

Table 3 reveals different perspectives between IP offices and practitioners on the average time it takes to obtain a patent registration. Only Indonesia and Malaysia provided an actual calculation of the average time. On the IP office side, the process time ranges from 2 to 5.61 years, whereas in the view of practitioners this takes 2-8 years.

IP offices should collect detailed data on the time required for each step of the procedure in order to alleviate backlog problem most effectively (i.e. in high priority activities along the process chain).

Table 3 Average Time Expected to Take to Register A Patent IP offices Practitioners Cambodia 3 years Over 3 years China - 3-5 years Indonesia 5.61 years via normal process; 7-8 years 4.92 years via PCT Laos 4 years More than 5 years Malaysia 1.6 years via fast-track basis without 4-6 years objections; 5.41 years via Paris Convention; 2.15 years via PCT Myanmar None None Philippines 4-5 years Singapore 3-4 years 3-6 years Thailand 3 years 5-6 years Vietnam 2-3 years 2-3 years Source: Results of IP office and practitioner questionnaires

The differences in the expectations of the two groups appear to derive from different methods of calculating the time needed to register a patent as well as different methods of collecting the data. In general the data collection by the IP Offices is likely to be more comprehensive and systematic than the data collection by the practitioners.

Trademark Offices

Similar to the chart of patent examiner workloads, an IP office with an adequate number of examiners to handle a heavy workload is located on the bottom right corner of the graph. Chart 5 and Chart 6 indicate that Vietnam has the lowest number of trademark applications per examiner in 2010. Indonesia, despite a large number of applications, will likely be able to manage the workload better than Thailand and Malaysia.

Chart 5 Trademark Examiner Workload 2,500 Thailand; 37,656

2,000 apps 1,500 Malaysia; 26,366 apps Indonesia; 47,794 1,000 Cambodia; 3,969 apps apps Examiner Examiner in 2010 500

Laos; 2,417 apps Philippines, 16,844 Vietnam; 27,923 Trademark Trademark Applications per 0 apps apps -10 0 Number10 20of Trademark30 Examiners40 50 60 70 80

Note: Size of the bubble = Number of applications. Data not available for Myanmar, China, and Singapore Source: Kenan Institute Asia

Chart 6 Trademark Applications per Examiner

Trademark Examiners TM Applications per Examiner

3,000

2,000 2,092 1,111 1,465 794 Examiners, 1,000 604 5 580 43 4 18 29 443

0 18 63 Applications Applications examiner per per year

Note: Data not available for Myanmar, China, and Singapore. Source: Kenan Institute Asia

Unlike patent examiners, there is no requirement regarding the technical educational background for trademark examiners. Typically, a bachelor’s degree in a non-science field is sufficient. In some countries, like Indonesia and Malaysia, high school graduates are employed as trademark examiners. Master’s degrees are often not required, but many Indonesian, Thai and Vietnamese trademark examiners earned them regardless. (Chart 7)

Chart 7 Trademark Examiner Educations

100% 27.9 100.0 11.1 7.9 57.1 80% 88.9 0.0 58.1 60%

55.6 40% 34.9 20% 14.0 0% Percentage Percentage Number of of Examiners Indonesia Laos Malaysia Thailand Vietnam High School B.S. B.A. M.S. M.A

Noted: Data not available for Cambodia, China, Myanmar, Philippines and Singapore Source: Kenan Institute Asia

In terms of years of experience, the percentage of trademark examiners with less than 10 years of experience is significant for Cambodia, Laos, Malaysia, Philippines, and Vietnam. Trademark examiners in Indonesia and Thailand are highly experienced. (Chart 8)

Chart 8 Trademark Examiner Years of Experience 3.2 Vietnam 47.6 28.6 7.9 12.7 Thailand 11.1 33.3 27.8 27.8 Philippines 7.1 60.7 10.7 14.3 7.1 Malaysia 94.4 5.6 Laos 75.0 25.0 Indonesia 25.6 16.3 27.9 30.2 Cambodia 80.0 20.0

0% 20% 40% 60% 80% 100% Percentage of Total Number of Examiners < 5 years 5-10 years 10-15 years 15-20 years > 20 years

Noted: Data not available for Myanmar, China, and Singapore Source: Kenan Institute Asia

Table 4 shows different perspectives between IP offices and practitioners on the average time a trademark registration is expected to take. While the expectations of the groups are relatively in line with one another, the differences appear to derive from different methods of calculation or different ways of collecting the data.

Table 4 Average Time Expected to Take to Register a Trademark Countries IP offices Practitioners Cambodia 3 months Around 4 months China Within 3 years 3-5 years Indonesia 14 months 1-2 years Laos 6 months 6 months Malaysia 17-24 months 2-3 years; 12-18 months without objections Myanmar 1 months 4-6 weeks Philippines 9.99 months 18-24 months Singapore 6-8 months 4-12 months Thailand 12-18 months 10-18 months Vietnam 15-18 months 15-20 months Source: Results of IP office and practitioner questionnaires 17

Enforcement and Dispute Settlement

Most of the IP offices have responsibilities that include drawing up or at least advising on IPR enforcement policy. Typical roles related to IP enforcement for IP office staff include providing consultation and expertise to courts and coordinating with other enforcement bodies on IP violation complaints. In some offices, such as Indonesia and Vietnam, officials are also involved in investigation of infringements, together with other enforcement agencies.

Most of the offices, except in Malaysia and Myanmar, perform a mediating function in dispute settlement.

Table 5 Enforcement and Dispute Settlement

Enforcement Dispute Settlement

Cambodia Providing consultation to enforcement bodies. Mediation

China SIPO issuing “Measures on Patent Enforcement” -

Indonesia Investigating complaints. Providing expertise to Provide expert witness. the court.

Laos Receiving complaints and communicating them Mediation to the responsible authorities.

Malaysia - -

Myanmar - -

Philippines - Mediation Singapore Policy-making and drafting IP legislation. Mediation

Thailand Coordinating with other enforcement agencies. Mediation Providing consultation

Vietnam Coordinating with other enforcement agencies. Mediation Providing expertise to the court. Investigating infringements.

Recommendations

Similar assistance needs from international organizations are observed in almost every office in our study. A short-term assistance plan should focus on technical trainings in search and examination. Moreover, ability to access comprehensive IP databases at cheaper costs can quickly reduce the patent and trademark application backlogs and speed up the granting process. Recommendations for each of the capacity components are summarized below.

Trainings for Examiners - Junior and inexperienced examiners need basic training in search and examination. More experienced examiners may benefit from sessions on newly emerging fields, such as nanotechnology, biotechnology, and computer-related technology. These technology update sessions should be provided by firms within the field with financial

support from international donors. Train-the-trainer workshops will be beneficial and will help lessen the ASEAN IP offices’ dependency on international experts.

More Examiners - Trademark offices face more problems regarding the number of examiners than patent offices. The problem is most severe for Malaysia and Thailand and, to a lesser degree, for Vietnam.

Database - IP offices in all countries in this study would benefit from assistance in building better domestic IP databases and information management systems. Cheaper subscriptions to more powerful international databases, such as EPOQUE NET and GPI, were reported to have significantly improved Philippines’ patent granting process. A less expensive central and comprehensive IP database system would help the ASEAN offices avoid duplication across multiple platforms and would substantially improve the offices’ efficiency.

IT problems (internet, servers, computers) - A small number of IP offices still do not have access to hi-speed internet. For others, servers dedicated to large IP databases are recommended.

Trainings for Patent Agents - Trainings to create capable and skilled patent agents are urgently needed since the problem of incomplete or poorly prepared applications is always listed on top of the important problems list of every IP office.

Language - In order to ensure effective and efficient review of foreign application results, and to effectively utilize ASPEC, an examination results-sharing system, examiners should receive English language training.

Financial Autonomy - A potential solution to various aforementioned problems, financial autonomy would allow flexibility in hiring, equipment purchasing, planning, and managing application backlogs.

A long-term assistance plan for the ASEAN patent and trademark offices should aim to do several things: it should 1) enhance the competency of national IP examiners to conduct their own trainings on search and examination; 2) encourage financial autonomy of IP offices; and 3) provide technical help on the creation of an ASEAN-based IP portal.

Assistance from international donors cannot thrive without cooperation from the ASEAN IP offices. The ASEAN countries, beyond striving for a balance between IP protection and rapid R&D development, must have the political will to improve their systems, and a perspective on the potential benefits of local research and development, together with a plan to encourage more creativity and innovation. Deficiency in English language competency should be addressed immediately so that it will not become a hindrance to technical knowledge accumulation provided through trainings by international experts. Strong English skills will also mean less time spent on search and examination procedures. Apart from these, a clear and well-written examination manual and guideline will decrease ambiguity in the application process for both examiners and applicants. Trainings for patent agents are also necessary as well-written applications will further ease examinations.

IV. REGIONALIZATION OF IP PROCESSES

Motivations and Objectives of Regional Cooperation on IP

Since 1996, the ASEAN Working Group on Intellectual Property Cooperation (AWGIPC) has been responsible for leading regional efforts toward an enhanced and integrated IP system. In order to realize this system, in line with the ASEAN Economic Community Blueprint’s second strategic goal of a highly competitive economic region, the Working Group was to carry out the objectives of the ASEAN IPR Action Plan 2004-2010. This plan listed the following objectives:

 “To help accelerate the pace and scope of IP asset creation and commercialization inside and outside ASEAN, and the formation of cross- border linkages in science and technology (S&T) fields and research and design (R&D) activities.  To develop and harmonize an enabling IP registration, protection and enforcement framework of policies and institutions in the region.  To promote greater public awareness, and the building up of human resources and institutions relating to IP and IPRs in ASEAN.  To further empower national IP offices in the collaborative provision of Business Development Services (BDS) in the support of the above objectives.”6

With support from international IP partners, the AWGIPC set out to work with ASEAN Member State (AMS) offices to create a central online platform for the region. This platform would allow those offices to access IP-related information and resources, to facilitate knowledge-sharing among offices (e.g. on best practices and policy experiences), to promote regional accession to major international IP treaties, and to encourage regional cooperation on emerging IP issues and legislation.7

Regional Dialogue Partners (DPs) comprise international IP offices and organizations that have committed to assisting ASEAN achieve regional IP integration through enhanced cooperation and improved office policies and practices. Historically, major IP organizations working with ASEAN were the USPTO, EPO, JPO, and WIPO. The Chinese and Korean IP offices have recently provided further support to the AWGIPC.

Considering the important role strengthened IP regimes are expected to play in promoting local creativity and innovation, enhancing foreign direct investment, and ultimately ensuring sustainable development throughout the ASEAN Community, the international partners suggest that it is crucial that efforts toward regional IP improvements and integration be maintained and bolstered. This chapter will address regional progress made since K.I.Asia’s 2007 report, key challenges, and recommendations on enhanced future efforts.

Regional Efforts Thus Far

6 ASEAN INTELLECTUAL PROPERTY RIGHT ACTION PLAN 2004-2010 7 ASEAN Economic Community Factbook, Jakarta: ASEAN Secretariat, February 2011 20

The AWGIPC has been relatively successful in getting the conversation on IP improvement started throughout the region. The Working Group has hosted workshops and seminars on various IP topics highlighted in the work plan, and reports it has formed a strong network of regional IP officials. This network has fostered a supportive environment in which country office representatives can present specific obstacles and challenges to be collectively addressed by all participating member states. The Working Group reports that this system is beneficial as it boosts offices’ morale, facilitates incremental process enhancements and strengthens cross-border enforcement efforts.

According to a representative of the Working Group, implementation of the 2004-2010 Work Plan has made gains toward regional integration that are more symbolic than tangible. Two important exceptions to this assessment, however, should be noted:

 The ASEAN Patent Examination Cooperation Program (ASPEC) is a system successfully put into operation since June 15, 2009 whereby participating AMS can refer to patent search and examination (S&E) results from other AMS in order to facilitate their own substantive reviews. An office reviewing a patent application is not obliged to accept the foreign approval, and must ultimately decide whether or not, in accordance with its own national laws, before it will grant the patent; nonetheless, the system has improved not only process efficiency (e.g. faster turnaround times), but also S&E quality. All AMS with established patent offices (all but Myanmar and Brunei) currently participate in the ASPEC program.8  The ASEAN IP Portal, to be launched in 2012, is currently under development. The Portal will ultimately serve AMS stakeholders as a convenient central database of all IP activities, achievements and information throughout the region, enhancing knowledge-sharing efforts and regional transparency.9 The Working Group envisions a system whereby a different AMS office will be responsible for managing and updating the system each year. These two initiatives should prove both useful and tangible.

Challenges Faced

Efforts aimed at regional IP integration face various significant challenges. Primary among these are:

 Disparate office capabilities  Widely different legal, social and economic environments  Insufficient communication between the IP offices and the Working Group  Insufficient communication between DPs and the Working Group  Duplicative training by various DPs  Difficulties in designing trainings that address specific country-level needs while encouraging regional integration

8 http://www.ipos.gov.sg/NR/rdonlyres/9C70CB38-9FF7-4663-A5A0- 71B65EBAC6DB/7957/Noticeprocedures2.pdf 9 http://www.ecap-project.org/Support_to_the_Setting_up_the_ASEAN_IP_Portal 21

 Reduced availability of donor funding for IP office training

These challenges will be considered throughout the following analysis of regionalization objectives, and of stakeholder recommendations toward achieving those objectives.

Regional Objectives Moving Forward

AWGIPC delegates agreed upon a finalized IPR Action Plan 2011-2015 at the group’s 36th meeting in July 2011 in Bali. The plan was released in September, and highlights a number of actions as strategic priorities, including:

 Reduction of the average processing time for trademarks  Development of a Regional Classification of Ethnic Goods and Services  Capacity building for office and external stakeholders  Further development of regionally integrated systems (e.g. ASPEC and the IP Portal)  The creation of a regional database of copyrights  Region-wide accession to international IP treaties and agreements (particularly, the Madrid Protocol on Trademarks and the Hague Convention on Designs)  The designation of AMS as issue-specific Country Champions (e.g. Thailand and Vietnam as co-Champions on Geographical Indications, and Singapore as the IP Portal Champion)  Promotion of a Regional Action Plan on IPR Enforcement  Enhanced collaboration with the international community

Furthermore, the document outlines the promotion of regional efforts toward the establishment of a ‘Creative ASEAN’.

These issues and goals are all timely as they address concerns that have been identified by various stakeholders as serious threats to continued success at regional integration and overall IP improvements for AMS:

 By sharing and implementing best practices and policies across AMS offices, and by bolstering offices’ IT capabilities, the Working Group aims to reduce the average processing time for trademark applications to six months region-wide by 2015.  A Regional Classification of Ethnic Goods and Services will be drafted to supplement the Nice Classification System for the registration of marks for relevant goods and services. This should prove beneficial to AMS stakeholders, as the ASEAN list is supposed to be more specific and detailed regarding goods and services unique to the region. Currently, of the AMS, only Singapore and Malaysia are contracting parties of the Nice Agreement.10  Capacities of both office examiners and professional agents will be enhanced via trainings, workshops and seminars based upon office and country needs, and periodically adjusted to reflect lessons learned from improved project assessments. These efforts will be geared toward stakeholders involved in the application and review of patent, trademark and design applications. Of special note, the Working

10 http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=12 22

Group envisions capacity building exchange programs for 2014 through which examiners will travel to regional and international IP offices (i.e. of Dialogue Partners) to learn best practices and improved techniques to be institutionalized at their own offices.  Integrated systems of shared resources should help to address the major problem of disparate capacities between AMS offices. Programs like ASPEC and the IP Portal will help bring developing offices up to speed with their more sophisticated neighbors with less need to invest in physical infrastructure at each office. In particular, ASPEC should reduce patent examination times at these offices, especially for applications in unfamiliar and/or ‘new frontier’ fields such as nanotechnology. Nonetheless, if the results-sharing system is to be successful, it is imperative that all examiners using the system have a sufficient command of the English language, as the Working Group has stipulated that result-owner offices must prepare patent ‘claims and specifications,’ for review by AMS, in English. This issue is of special concern for those offices in which English is not an official language. Considering the wide range of English language proficiencies across the region, training to ensure these qualifications will take significant time and resources.  Accession to international treaties, according to the Working Group, appears to be the best currently available measure toward achieving regional IP coherence and integration. The AMS agreed to adhere to the Hague Agreement on Designs by 2015, and to work toward implementing similar systems. The region was also unsuccessful in creating a central receiving office for trademarks. Clearly, the region’s disparate legal, social and economic environments make it difficult to establish an EPO-style central ASEAN IP system in the near future. Accordingly, the Working Group plans to promote and facilitate further regional accession to international IP treaties (requiring minor legal amendments, as opposed to full-scale legislative overhauls) as one way to establish more effective and coherent IP systems in the region. For example, the new plan will require that all AMS accede to the PCT and the Madrid Protocol on Trademarks by 2015 (currently, only Singapore and Vietnam have acceded).  A regional copyrights database has been proposed by the Working Group as a realistic objective that would facilitate better cross-border enforcement of copyright protection via enhanced country-level accountability in honoring foreign copyright claims.  Country Champions will serve as experts in their respective fields and should strive to share policy updates and emerging issues with all AMS offices, effectively splitting up the task of ensuring the region’s IP competitiveness. This program should align well with the ASEAN-helps-ASEAN model promoted by the Working Group.  Creative ASEAN reflects the region’s developmental goals of enhanced innovation, differentiated output, and thus, increased competitiveness. Toward this objective, the Working Group has commissioned an external study to identify potential cross-border synergies in various creative industries, and the establishment of ‘creative twin cities.’  Regional enforcement of IPRs is crucial in bolstering foreign trust and participation in the ASEAN IP regime. The Working Group aims to improve enforcement efforts via regional policy workshops to share best practices and develop common guidelines, enhanced AMS office collaboration with the private sector and with local judiciaries, and through public awareness campaigns. Nonetheless, individual offices will remain limited in their abilities to actively implement enforcement changes – they will require support and participation from local police in tackling domestic IP infringement, and from customs authorities in tackling cross-border activities.

 The Working Group’s vision for enhanced international cooperation entails more effective collaboration with various stakeholders worldwide. Key among these are: the co-drafting, implementation and assessment of a structured WIPO work plan for the region; the implementation of the ASEAN-Australia-New Zealand Free Trade Agreement; planning consultations and improved communication with Dialogue Partners (and periodic results-assessments on DP activities); active participation in the international discourse on IP issues (e.g. WIPO and WTO meetings); and improved, candid relationships with private stakeholders operating in the region.11 The AWGIPC’s longer-term vision for IP in ASEAN includes regional adherence to all major IP treaties and conventions, central filing and enforcement outlets, and the capacity to host independent, unified trainings and networking events for AMS. Such developments would provide opportunities for regional office representatives to share individual policy experiences in order to cooperatively work toward implementing common best practices. Under this system, each member state would maintain its own IP laws and be responsible for its own substantive examinations, while the regional body would streamline formal procedures, provide technical assistance and training, and bolster regional IP awareness.

Recommendations

1. Reporting and Results-tracking

If these plans for integration via loose association are to succeed, it is important that the Working Group implement a system to effectively and transparently manage its development initiatives. For example, while general adherence to international IP treaties will help the region gain more foreign investment, member states must fully live up to their self-reported claims of compliance with these treaties.

Enhanced ASEAN Secretariat on IP – As the region looks to further utilize international treaties in promoting an integrated, secure IP landscape to the world, international donors suggest that the ASEAN Secretariat is currently too undermanned and underfunded to effectively manage IP development. Their recommendation is to make a significant investment in strengthening the IP arm of the Secretariat to serve as a central IP administrative authority. This authority should assist the AMS in carrying out their stated objectives, track improvement efforts and report objectively on their progress in order to boost foreign confidence in the ASEAN IP regime.

Assistance Review Program – In the shorter term, an enhanced Secretariat might well facilitate international support geared toward preparing regional offices to effectively assume their responsibilities by establishing a results-oriented, institutional assistance-review program. Currently, Dialogue Partners are privy only to participants’ self-reported feedback. These sometimes subjective responses generally do not provide DPs with measurable results with which to tailor their assistance offerings. An institutionalized feedback system could report back to DPs on quantifiable and verifiable office ‘wins’ resulting from technical assistance projects. For example, a regional office might report that its trademark application backlog was reduced by a certain percentage within six months after examiners attended a training session on streamlining procedures. This type of quantifiable, results-oriented

11 AWGIPC Work Program 2011-2015 24

process review will enable DP’s to most effectively tailor their assistance to meet real office needs.

Baseline Study of IP Offices – The Working Group should compile a baseline study on the current status of each AMS IP office, as well as realistic targets for enhanced processes and integration (e.g. region-wide accession to the Madrid Protocol by 2015), and establish a system to transparently monitor progress toward those targets. This system, if made available to all relevant beneficiaries and stakeholders, would simultaneously streamline, enhance and substantiate the AWGIPC’s efforts.

2. Communication

Both the Working Group and Dialogue Partners have expressed concerns over the direction and effectiveness of recent support by the DPs, and have identified a lack of communication as a major barrier to achieving optimal results. As effective international support is crucial not only to the region as it bolsters its IP systems, but also to the DPs as they strive to ensure a secure and productive environment for their domestic businesses in the region, both parties should take measures toward amending the communication breakdown that is currently inhibiting regional technical assistance.

Joint Meetings with Dialogue Partners – Currently, the AWGIPC meets separately with each of its DPs one time per year for approximately one hour. Communication at these meetings is limited at best. In order to streamline and enhance disparate technical assistance programs to effectively and efficiently meet AMS needs, the Working Group should sit down together with all its DPs for an annual day-long meeting in which the Working Group clearly states its major challenges and technical assistance needs. The DPs, in turn, should review their current support programs and collaborate with the Working Group in planning future programs. This approach would not only tailor assistance to actual needs, but also eliminate the duplicative trainings that have made past efforts inefficient.

Consultation on Work Plans – To further improve technical assistance, the Working Group should consider consulting with DPs in crafting future work plans. If DPs are to maintain relevant assistance programs, they should be kept up to date on the region’s near-term priorities and future objectives. This would help DPs, now under increasing budget pressures, to maintain a useful level of assistance.

Assistance Calendar – Beyond this, the ASEAN Secretariat should implement a regularly updated assistance calendar featuring all DP support programs scheduled for the year. Such a resource would reduce or end unnecessary programs, and allow DPs to collaborate more effectively on upcoming projects.

Focus on Those Most in Need – International donor assistance should be directed primarily to the least-developed offices (i.e. CLM), for if ASEAN is to achieve a regionally integrated IP regime in the future, all of its constituent IP offices must first gain and maintain at least a minimum level of institutional soundness and operational efficacy. Specifically, donors should consider shifting the focus of their CLM assistance efforts from technical assistance (which has proven insufficient for various reasons discussed in this chapter), toward sponsoring comprehensive IP education for office employees. For example, Dialogue Partners might sponsor new-hire patent examiners to study IP Law and to train them at the IP

offices in the DPs’ home-countries. The ASEAN University Network (AUN) feels that real office improvements will require these and other human resource investments. Activities involving the more advanced IP offices should be largely self-financed and focused on regional and international cooperation, coordination and communication.

Stakeholder Engagement – Before (and while) fostering improved relationships with Dialogue Partners, it is essential that the AWGIPC engage with AMS IP offices, as well as other stakeholders, such as local businesses, universities and non-government organizations, in shaping and executing the work plan. To illustrate the current problem, some country offices were not familiar with all of the 2004-2010 work plan’s action items. Similarly, communication between the AWGIPC and the ASEAN IP Association is insufficient. According to the work plan, the Working Group was supposed to partner with the IP Association in carrying out its objectives. The AIPA, however, has not been invited to the Working Group’s semi-annual meetings for the past five years. If the Working Group is to effectively provide its constituent offices with practicable solutions to their actual problems, it needs to work together with all relevant stakeholders. While the AWGIPC has already agreed upon a finalized 2011-2015 work plan, it would be wise for the group to sit down with these stakeholders, review the plan, and cooperatively determine the best way to manifest the plan’s long-term objectives via tangible, prioritized initiatives.

3. Training

The AWGIPC and Dialogue Partners agree that more targeted and focused training events would best serve their mutual interests. Given the different levels of development of the ASEAN IP offices, however, it is difficult to design training programs that address these differing needs and capabilities. At the same time, providing training on a country-by-country basis does little to encourage regional IP understanding, cooperation and integration.

Sub-regional Training – DPs and the AWGIPC should consider pursuing sub-regional activities focused on the needs of sub-regions within ASEAN. For example, representatives from CLMV IP offices might attend a specific training event covering basic best practices and issues that are relevant to their early-development statuses, while a workshop on advanced patent issues could be designed for patent officials from AMS that have well- established patent offices.

Trainee Selection – To make training, whether sub-regional, regional or country-based, more effective, it is important that the right trainees are invited to the training events. The EC- funded ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), for example, has successfully employed a filtering mechanism to ensure that only appropriate stakeholders attend specific training activities. Participants are required to present in English, complete a program satisfaction survey, and submit a feedback report on the follow-up actions carried out by their respective offices. Similarly, the AUN ensures that its own training events draw appropriate audiences by including specific language requirements in all program announcements, and declines to provide participants with per diem allowances, choosing instead to centrally manage all relevant expenses. This tactic discourages the use of training programs as rewards and encourages selection of trainees according to their need for a specific kind of training and their ability to absorb the level of training offered.

The main overall recommendation is for the AWGIPC and its Dialogue Partners to strive to establish more frequent and open communication, and to work together to ensure that

technical assistance programs are timely and effective. Beyond facilitating this near-term relationship, a stronger ASEAN Secretariat capability on IP would enhance the region’s long- term IP objectives, ensuring efficient and transparent oversight of office initiatives, knowledge sharing, and technical support, and ultimately paving the way for an effective and investment-attracting regional IP landscape.

PART II

COUNTRY REPORTS

I. CAMBODIA

Overview

Cambodia has emerged from two decades of war and social unrest to achieve significant economic growth. From 2004-2007 GDP grew steadily at roughly 10%. In 2009 it slightly contracted at 0.1% due to the global economic crisis, but real growth recovered to 5% in 2010. GDP for 2010 was estimated at USD 30.1 billion, while GDP per capita (PPP) for Cambodia’s 14.7 million people reached USD 2,000, with services (45.2%) and agriculture (33.4%) serving as the country’s main sources of income.12

Cambodia has established an open free market system, and the government has sought greater foreign investment. Accordingly, the government is committed to IPR protection. Declaration No. 368 of the Ministry of Commerce, “Procedures of the Intellectual Property Department of December 15, 1997” is intended to ensure the protection of IPR. With this undertaking, Cambodia took a decisive step toward IP protection, paving the way for their invitation to become a member of the World Trade Organization in 2004.

Legal Framework

The General Department of Industry (GDI) established Strategy 2015 – a new corporate framework for 2010-2015 – to cope with the challenges of economic growth and to enhance Cambodia’s investment environment in order to attract more foreign direct investment. One part of this strategy focuses on regulatory reform to sustain market incentives and investor confidence. This focus should encourage improvements in the Cambodian IP registration and granting systems. In 2010, the Cambodian IP system was in an early stage of development. Although Cambodia has not yet complied with all requirements of the TRIPS agreement, it has made major progress in the past decade.

Of the major IP treaties, Cambodia is party to the Paris Convention for the Protection of Industrial Property, and is a member of the World Intellectual Property Organization (WIPO). Cambodia has also signed various bilateral agreements concerning IPR, including the 1996 Trade Relations and Intellectual Property Rights Protection Agreement with the United States and the 1997 Memorandum of Understanding (MOU) on Intellectual Property Cooperation with Thailand.

In the future, the Cambodian government intends to accede to the major international IP treaties such as the PCT, the Madrid Protocol and the Nice Agreement. It is also considering accession to the Berne Convention, the Singapore Treaty, the Vienna Agreement and the Hague Agreement (as well as the Locarno Agreement), the Strasbourg Agreement Concerning the International Patent Classification, the Washington Treaty on Intellectual

12 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html (accessed March 30, 2011). 29

Property in Respect of Integrated Circuits, and the International Union for the Protection of New Varieties of Plants (UPOV).13

Cambodia joined WTO in 2004 and must, consequently, abide by the TRIPS agreement by 2013. Cambodia is still in the process of preparing IP laws and regulations in compliance with TRIPS. Details are as follows:

 Trademark Law (16 Chapters, 72 Articles) – The Royal Decree on Marks, Trade Names and Acts of Unfair Competition was enacted on February 7, 2002. In July 2006, the Sub-Decree No.46 on the Implementation of the Law concerning Marks, Trade Names and Acts of Unfair Competition was issued. This Sub-Decree determines the legal procedures for registration, refusal, agents, claiming priority, invalidation, and border measures in order to implement the Law on Marks, Trade Names and Acts of Unfair Competition.  Patent, Utility Model and Industrial Design Law (9 Chapters, 137 Articles) - Although the laws were enacted on January 2, 2003, the regulations for implementing the law were not submitted to the Council of Ministers until October, 2005. The Ministry of Industry, Mines, and Energy (MIME) issued a declaration in June 2006 on granting patents and registering industrial designs. In May 2007, the MIME issued another declaration on the grant of patents and utility model certificates.14  Geographical Indication (GI) Law – The Law on GI was finalized with technical assistance from France and enacted in 2009 as Prakas on Geographical Indication Registration.15  Trade Secret Law and Regulations – The law has not yet been drafted due to the lack of technical assistance. Japan previously provided assistance to Cambodia in drafting this law, however, it was written in Japanese. Although it was later translated into English, much was lost in the translation. Canada has provided external assistance (through the APEC-EIP) to finalize the draft Law on Undisclosed Information and Trade Secrets, which is expected to be enacted by 2011.16  Copyright and Related Rights – The current copyright laws were promulgated in 2004. The content of these laws is similar to existing legislation elsewhere. Further, these laws comply with important aspects of the Berne Convention and the TRIPS Agreement. For instance, the laws permit the destruction of copyright-infringing goods and copyright protection lasts for the author’s life, plus an additional 50 years.  Encrypted Satellite Signals Law – The deadline for the first draft of this law was extended due to a lack of technical assistance. Cambodia has not yet made significant progress toward enacting required legislation on encrypted satellite

13 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/index.php?q=ASEAN_IP_Legislations_Cambodia (accessed March 28, 2011). 14 Bureau of Economic, Energy and Business Affairs, http://www.state.gov/e/eeb/ (accessed March 10, 2011) and The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/index.php?q=ASEAN_IP_Legislations_Cambodia 15 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/index.php?q=ASEAN_IP_Legislations_Cambodia (accessed March 28, 2011). 16 Ibid. 30

signals, although it obtained a model law on encrypted satellite signals and semiconductor layout designs from WIPO in March 1999.17  New Plant Variety Protection Law –The Council of Ministers decided that this law should be under the responsibility of two ministries: the Ministry of Agriculture will be responsible for old plant varieties whereas the Ministry of Industry will take responsibility for new varieties. The Law on Seeds Management and New Plant Varieties Protection (PVP) was enacted on April 29, 2008, and benefited from technical support provided by ECAP II and the French Plant Variety Office. Cambodia is currently preparing the PVP implementation regulation and is in need of legal and technical assistance for the implementation of the PVP system.18

Intellectual Property Office

Responsibility for IP administration and policy-making is spread among several ministries. Trademarks are the responsibility of the Department of Intellectual Property Rights (D/IPR), Ministry of Commerce, whereas patents, utility models, industrial designs, integrated circuit designs and plant varieties are under the jurisdiction of the Department of Industrial Property (DIP), Ministry of Industry, Mines and Energy (MIME). The DIP is an important link to world IP organizations such as WIPO. As the main promoter of innovation in Cambodia, its responsibilities include technology creation and protection of industrial property.19 The Department of Copyrights and Related Rights, Ministry of Culture and Find Art, is in charge of copyrights.

In order to deal with the difficulties presented by the separation of IP administration among these three ministries, the Council of Ministers created the National Committee for Intellectual Property Management in 2008. This committee is responsible for developing national policy on IP, strengthening interagency cooperation, preparing and disseminating new laws and regulations, and acting as a clearinghouse for technical assistance relating to the IP sector.20

Cambodian officials working in the IP area have improved their expertise through international assistance. Cooperation with ECAP II and III has helped to train IP officers, including judges, prosecutors and attorneys, and to enhance the implementation of IP laws in Cambodia.

Overall, there were sixteen examiners in 2010: twelve trademark examiners and four patent examiners. All of them have science degrees. The patent examiners only perform formality checks. All patent examiners and seven trademark examiners have less than five years of experience while three trademark examiners have 5-15 years of experience. The salary rate of IP examiners is comparable to that of other civil servants. The salary range for patent and trademark examiners is between USD 50-200. An enormous gap in salary between

17 Bureau of Economic, Energy and Business Affairs, http://www.state.gov/e/eeb/ (accessed March 10, 2011) 18 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/index.php?q=ASEAN_IP_Legislations_Cambodia (accessed March 29, 2011). 19 General Department of Industry, http://www.gdi.mime.gov.kh/en/government/about-us.html (accessed March 28, 2011). 20 Bureau of Economic, Energy and Business Affairs, http://www.state.gov/e/eeb/ (accessed March 10, 2011) 31

government and private sector workers still exists in Cambodia.21 Previously, examiners left the office to take jobs in unrelated industries.

Moving forward, the Cambodian office requested assistance from the major IP offices in establishing a regional benchmark by which developing offices, like the DIP, could measure their strategic initiatives toward decreasing processing times and application backlogs. Further, the office is currently finalizing proposals for (and searching for developing partners with whom to implement) these process and policy changes, including the development of an online platform and a program to enhance public awareness, and also for partners to assist the office in implementing these changes.

Chart 9 Organization Chart

Intellectual Property Department

Bureau of Bureau of GI Bureau of Bureau of Post- & Trade Bureau of Bureau of Registration Litigation Registration Secret Cooperation & Dissemination Legal Affairs & Information

Formality Receiving Check Formality Check GI Secretariat Petition Section & Exclusivity to Support GI Section International Section Commission Admin & HR Section Cooperation Section Section Mark Dispute Examination Renewal Section Settlement 1 Section Section Formality Record & Check Section Public Awareness Report Section Section

Mark Examination Amendment Examination Enforcement 2 Section Section Section Section IT Section Legal Affairs Section

Trade Secret & Genetic Resource and Traditional Cultural Expression

Soure: Intellectual Property Office

21 http://www.cambodiamirror.org/2008/10/30/in-cambodia-the-salaries-do-not-correspond-to-the-size-of- property-owned-by-civil-servants-thursday-30102008/ 32

Table 6 Number of Examiners by Highest Degree Obtained Office Degree High Bachelor Master Doctoral school Science Non- Science Non- Science Non- science science science Patent 4 examiners Trademark 12 examiners Source: Intellectual Property Office

Table 7 Number of Examiners by Years of Experience Office Less than 5 5-10 years 10-15 years 15-20 years More than years 20 years Patent 4 examiners Trademark 10 2 examiners Source: Intellectual Property Office

Patent Applications

All of the 104 patent and utility model applications filed in Cambodia since 2007 have been foreign applications. (Table 8) One possible reason for this is that Cambodia is still in an early stage of economic transformation. Most Cambodian companies are small and medium size enterprises that produce few inventions or innovations, and fail to commercialize those they do create. Consequently, no domestic patent applications have been filed to date. As Cambodia must currently wait for search and examination results from WIPO and other third parties, no application has been granted a patent to date.

Table 8 Patent Application in Cambodia

Year Patent and Utility Model Applications Domestic Foreign 2007 0 13 2008 0 38 2009 0 29 2010 0 24 Total 0 104 Source: Bureau of Cooperation and Legal Affairs, Intellectual Property Department.

Patent Procedures

According to the current law on Patents, Utility Models, and Industrial Designs (2007), the MIME is in charge of administering and granting patents. Cambodia’s patent procedure is similar to that of other countries. Before being granted a patent, an applicant must prove the product’s novelty, inventiveness, and utility. Patentable and non-patentable subject matter are determined in accordance with the fields of technology covered by the European Patent Convention (EPC). After filing and formality check, the applicant must request an examination. Cambodia relies on search and examination from WIPO. Applicants who have already submitted applications abroad may also provide search reports from other countries for the examiners to consider. Acquiring these search reports, though required for applicants seeking priority filing, is often quite time-consuming, and delays the application process. Individuals may object to the application during the patent examination process.

As in other countries, patent rights are awarded on a first-to-file basis. The period of patent protection is 20 years from the filing date as stated in Article 45 of the Law on Patents, Utility Model Certificates and Industrial Designs, while protection for utility models is seven years without renewal, according to Article 73.22 A compulsory license can be implemented if the granted patent is not in use for three years. The government is now considering enacting a Law on Compulsory Licensing for Public Health.23 Cambodia also has legislation specifically addressing counterfeit pharmaceutical products.

Major problems faced by the DIP are a lack of qualified examiners, inexperienced examiners, and too few examiners on staff. As the two patent examiners have non-science degrees and only a few years of experience, they lack the expertise required to assess technical patent applications (currently, only the chief of the office is qualified to do so). The English language is another important barrier. Other problems include a lack of search tools, and computer and internet problems.

If the office is to expedite the patent application process moving forward, enhanced examiner training will be a crucial primary initiative.

22 Nhem Phally, Current Status and Future Prospects on Patent of the Kingdom of Cambodia, WIPO-ASEAN Sub-Regional Forum on Promotion of Innovation (2010). 23 BNG Legal, Intellectual Property in Cambodia (2010). 34

Chart 10 Cambodia Patent and Utility Model Procedure

Filing Application

Formality Check

Searching Examination Notification of Amendment

Substantive Examination Amendment No Amendment

Decision to Grant Decision of Refusal

Grant Patent/Utility Model

Publication

Source: WIPO-ASEAN Sub-regional Forum on Promotion of Innovation. “Current Status and Future Prospects on Patent of the Kingdom of Cambodia,” (2010)24

Trademark Application

Trademark applications and registrations have risen considerably during the period 2005- 2010, from 1,581 applications to 3,969 applications. Foreign trademark applications were the majority every year, contributing 75.1% of the total, on average. Despite the fact that domestic trademark applications represented a small percentage, they have increased gradually since 2006, probably because of increases in Foreign Direct Investment (FDI), together with the support, from the Cambodian government, of business promotion and trade facilitation.25 From 2005-2010, about 82.9% of trademark applications were granted whereas only 3.6% were refused and 0.6% were withdrawn. According to a report by the U.S. Department of State, ‘Since 1991, the Ministry of Commerce has maintained an effective trademark registration system, registering more than 35,500 trademarks (nearly 6,599 for U.S. companies) under the terms of a 1991 sub-decree, and has proven cooperative in preventing unauthorized individuals from registering U.S. trademarks in Cambodia.’26

24 World Intellectual Property Organization, http://www.wipo.int/edocs/mdocs/aspac/en/wipo_inn_bkk_10/wipo_inn_bkk_10_ref_cambodia.pdf 25 U.S. Department of State, “2010 Investment Climate Statement – Cambodia,” March 2010, http://www.state.gov/e/eeb/rls/othr/ics/2010/138045.htm (accessed May 27, 2011) 26 Ibid. 35

Table 9 Trademark Applications and Registrations in Cambodia

Application Registration Year Refused Withdrawn Domestic Foreign Total Domestic Foreign Total 2005 358 1,223 1,581 391 1,519 1,910 44 7 2006 864 698 1,562 355 1,198 1,553 68 10 2007 552 2,206 2,758 312 1,066 1,378 120 13 2008 578 2,521 3,099 437 1,874 2,311 131 28 2009 806 2,271 3,077 698 2,418 3,116 160 22 2010 840 3,129 3,969 652 2,384 3,036 50 21 Total 3,998 12,048 16,046 2,845 10,459 13,304 573 101 Source: Intellectual Property Department

Trademark Procedures

The D/IPR of the Ministry of Commerce has administrative authority for receiving applications and granting trademarks. The application can be in either Khmer or English. Cambodia grants a registered mark from member countries of the Paris Convention priority registration in Cambodia. After filing an application, granting of the mark usually takes from four months to one year. Trademark protection is granted for 10 years with a possible indefinite renewal for successive ten-year periods. The mark is given to the first entity to file an application, even if the mark is not used. A registered mark not used after five years can be nullified.

During the trademark registration process, objections to applications may be raised with the D/IPR within 90 days of the application’s publication in the Official Gazette of the Ministry of Commerce. Such objections, however, can delay the procedure.

IP officials believe the most crucial problem causing delays in the trademark procedure is an insufficient number of examiners. The ratio of applications per trademark examiner in 2010 was relatively high at approximately 794 applications. As the number of trademark applications is increasing every year, more examiners are required to effectively handle the workload.

Another major problem is the office’s slow internet connection. Each trademark registration requires an online search, and it is extremely difficult to search the large database with the current limited connectivity. Other problems, common among ASEAN IP offices, include the lack of qualified and experienced examiners, insufficient search tools and computer hardware, and poorly prepared applications.

Furthermore, examiners are not effectively communicating with applicants regarding application updates and notifications; reportedly, it is common for weeks to pass between a trademark’s issuance and its owner’s notification, and the communication is often delivered after the applicant’s deadline to respond has expired. In order to alleviate these issues, the

office should establish a central repository where applicants can check the status of their applications, alongside a streamlined, uniform procedure for handling applications.27

Beyond these procedural hold-ups, concerns exist that the lack of a definitive policy for determining the successful fulfillment of the requirement of descriptiveness leads to seemingly arbitrary rejections of some applications. The office should clearly define, communicate, and adhere to these requirements.

To further accelerate the procedure, it is advised that applicants hire a local agent to file their applications as these agents will have more specific expertise and experiences on the registration process.28

Automation and Information Technology

Cambodia uses patent and trademark search databases from the Internet and from PATENTSCOPE. In addition, physical trademark documents are scanned and stored in the IPAS system. Prior art searches are not currently publicly available, but instead must be performed at the office of the Registrar. There are 30 computer workstations on one server. Most computers have Intel Pentium 3 and 4 processors with internet bandwidth of 1 Mbps. As the IT equipment is unsophisticated and the internet connection is limited, the system must be improved to facilitate a faster and more convenient registration process.

Enforcement

The legal framework for the enforcement of Cambodia’s IP laws offers a number of enforcement provisions compliant with TRIPS. Many departments and authorities have enforcement responsibilities in their respective fields including the National Police, the Economic Police Department, the Ministry of Commerce, Customs and the Excise Department.29

Infringement of IPR can result in three outcomes: charge for damages and/or specific relief in civil court, suspended clearance of infringing goods, and criminal prosecution.

The patent owner is entitled to take civil action against an infringer such as an injunction and compensation. Criminal penalties are also available, varying from a fine of KHR five million to KHR twenty million, one to five years imprisonment, or both.30 The trademark owner can request criminal prosecution of the infringer. The penalty for standard infringement is KHR five to ten million, one month to a year’s imprisonment, or both. The penalty for counterfeiting is KHR one to twenty million, one to five years imprisonment, or both.31

27 Experts’ opinion 28 BNG Legal, “Cambodian Trademark FAQ,” May 10, 2010, http://www.expat- advisory.com/articles/asia/southeast-asia/cambodia/phnom-penh/cambodian-trademark-faq (accessed May 6, 2011). 29 Sisowath D. Chanto, Cambodia Industrial Property (2009), 4. 30 David Haskel, “Patent Law in Cambodia,” September 14, 2007, http://www.hg.org/article.asp?id=4828 (accessed March 31, 2011). 31 “Trademark Law in Cambodia,” September 14, 2007, http://www.hg.org/article.asp?id=4827 (accessed March 31, 2011). 37

By contrast, the DIP and D/IPR are not responsible for enforcement; rather, their role is to mediate the IP conflict and to provide consultation to enforcement bodies. DIP and D/IPR play a mediator role in seeking compromise between the owner and the infringer. In this regard, they will request both parties to provide the relevant documents or evidence to support their legal ownership in the contested period. This face-to-face dispute settlement enables both sides to explain and clarify their rights in the presence of a competent registrar. If the parties do not reach a common agreement, the registrar will propose suitable alternative options.

Most of the departments, however, suffer from insufficient experience and know-how. There is also a lack of coordination among the various authorities in charge of enforcement, which has led to ineffective enforcement. Further frustrating IP enforcement, the courts lack knowledge and experience in handling IP cases. In the future, Cambodia should consider establishing a court to specifically handle such cases. While Cambodia presently sees only a few IP disputes per year (about 10 per year concerning trademarks), it is likely that the number of IP cases will rise once all the relevant laws are in place. Alternatively, the commercial court being planned currently could serve as an IP court.

Recommendations

1. Cambodia should place greater emphasis on improving the institutions dealing with IPR, either by implementing a stronger and more powerful coordination mechanism or, preferably, by creating an integrated IP agency, as exists in some other ASEAN countries.

2. Cambodia should invest in providing an adequate administrative infrastructure for IP. This could potentially be secured via international assistance from bodies such as WIPO and the WTO, and/or national and regional organizations (USA, Japan, EU, etc.).

3. Information technology improvements to the department are needed. These improvements should address basic information technology infrastructure needs such as adding more new-model workstations, developing a functioning network, improving Internet connection speed and access, and implementing a modern information system for managing administrative procedures.

4. An extended training program, and various workshops and seminars are needed to meet the needs of the different staff, including substantive legal training for lawyers in the fields of trademarks, patents, utility models, and industrial designs, training in the drafting of IP legislation, and specialized training for examiners, copyright agents, judges and customs agents.

5. An IP information center system, similar to WIPO’s Intellectual Property Digital Library, should be developed to collect information on the country’s IP. Furthermore, an online registration system should be implemented as it is easier for applicants to register their IP without going to the Intellectual Property Department. This online system would provide added convenience and faster registration.

6. Enforcement agents will benefit from training and an instructive manual.

7. Cambodian patent and trademark offices will benefit from a network with local universities. Support is needed to establish and encourage collaboration in such a network that will not only help patent examiners do their job, but also assist applicants prepare applications.

8. Public awareness on IPR should be strengthened through outreach programs.

9. A patent manual is needed.

II. INDONESIA

Overview

Indonesia is the largest country in Southeast Asia in terms of both geography (1,904,569 sq. km) and population (242 million as of July 2010). Its population is the fourth largest in the world behind China, India, and the United States. In 2010, its GDP was USD 1.03 trillion, and per capita GDP was USD 4,300 when adjusted for purchasing power parity (PPP). Real GDP growth was 6% in 2010, a significant increase from the previous year.

Foreign Direct Investment (FDI) totaled USD 81.2 billion in 2010 and USD 72.8 billion in 2009. The export value of Indonesian goods was USD 146.3 billion in 2010, while the value of imports totaled USD 111.1 billion, giving Indonesia a positive trade balance. Exports were directed mainly toward Japan, Singapore and the United States, while imports came primarily from other ASEAN countries and China.

Industry and services represent more than 80% of Indonesia’s GDP (47.6% and 37.1%, respectively). The most dynamic sector is manufacturing in heavy industries including petroleum and natural gas, textiles, mining, cement, chemical fertilizers, plywood and rubber.32

Indonesia has a relatively solid IP system in place. This system originated from earlier Dutch codes of law. When Indonesia gained independence, it inherited the legal system established by the Dutch, including membership in the Berne Convention, previously signed by the Dutch on behalf of Indonesia.33 The Indonesian government has further improved its IP system in recent years.

Legal Framework

On an international level, Indonesia is party to the essential treaties pertaining to IPR, including the Berne Convention for the Protection of Literary and Artistic Works (with a reservation on Article 33), the Paris Convention for the Protection of Intellectual Property, the Patent Cooperation Treaty (PCT), the WIPO Performances and Phonograms Treaty (WPPT), and Trade Related Aspects of Intellectual Property Rights (TRIPS). Indonesia, however, is party to neither the Madrid Agreement nor the Madrid Protocol, and thus is not a member of the Madrid Union.

At the national level, Indonesia’s IP legislation has been substantially amended in recent years. In 2001, a new law on patents (Law No. 14 – State Gazette of RI of 2001) was enacted, and is currently in effect. Since then the Patent Law was modified with the following amendments in accordance with the TRIPS Agreement, ratified by Indonesia in 1994.34 The

32 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/id.html (accessed January 23, 2011). 33 EUROPEAID, “Intellectual Property Rights: Acquisition, Scope and Enforcement – Malaysia, Indonesia, China and Vietnam,” http://iprasia.org/storage/contentsfiles/0_99/1/Asia_Invest_Final_version_041108__PGF- PR_-2_051108_IK.pdf (accessed January 24, 2011). 34 Baker & McKenzie and Hadiputranto Hadinoto, Indonesia: Intellectual Property Guide (2009), 36. 40

Trademark Law, Law No. 15 – State Gazette of RI of 2001 no.110, was enacted on August 1, 2001. This law was also intended to bring Indonesian trademark law into conformity with the TRIPS Agreement. Additionally, Government Regulation No. 51 of 2007 on Geographical Indications (GR 51) was enacted on September 4, 2007. GR 51 is an implementation regulation of the provision in Article 56 of the Trademark Law.

In addition to the above legislation, the following IP-related laws have been enacted: the Designs Law 2000; the Trade Secrets Law 2000; the Integrated Circuit Layout Design Law 2000; the Plant Variety Protection Law 2000; and the Copyright Law 2002.

A draft Trademark Bill was issued in 2009, and circulated in March 2010. The new legislation is expected to become law in 2011, and is intended to streamline the trademark registration process, reducing average registration time to around 12 months.

The most recent update related to patent law is a Presidential Decree released on June 7, 2010 entitled “Presidential Decree no. 37 of 2010,” regarding procedures and requirements for the recording of patent assignments. Prior to this new regulation, it was impossible to record assignments of granted patents; therefore, the name of the patentee could not be changed when ownership changed. This caused uncertainty as to who held the certain right of the patent. The issuance of the Presidential Decree encompasses all matters relating to the recording of patent assignments. Under the decree, the transfer of a patent must be registered with the Directorate General of Intellectual Property Rights via required documentation and the payment of a fee.35

Overall, two government regulations and one presidential decree were issued between 2005 and 2010 as follows:

 Government Regulation No.2 of 2005 on the profession of IP consultants  Government Regulation No. 51 of 2007 on Geographical Indications (GR 51)  Government Regulation No.38 of 2009 on new official fees for IPR application filings  Presidential Decree no.37 of 2010 on procedures and requirements for the recording of patent assignments36

Currently, the Directorate General of Law and Regulation is preparing a new government regulation on License Agreement and Compulsory License.37 The government is also drafting a regulation concerning the revision of patent protection, covering issues such as patent application, publication and substantive examination.38

35 Migni Myriasandra Noerhadi, “Report of the 58th Council Meetings,” (2010): 4, http://www.apaa2010.kr/meeting/down/National_Group_Reports/APAA_2010_Recognize_Group_Report%20f or_Jeju_Korea_Final_Indonesia.pdf (accessed January 21, 2010). 36 Baker & McKenzie and Hadiputranto Hadinoto, Indonesia: Intellectual Property Guide, 5. 37 Ibid. 38 Cita Citrawinda Noerhadi and Prayudi Setiadharma, Report of the APAA 58th Council Meetings (2010). 41

Intellectual Property Office

The Directorate General of Intellectual Property Rights (DGIPR) was created by a decree of the President of the Republic of Indonesia in 1998 and is part of the Ministry of Law and Human Rights. It is the successor, through multiple steps, of the first public laws in the field of IPR established in 1894 during Dutch colonial rule.

DGIPR is responsible for providing an effective and efficient IPR system and for developing an IPR administration system that helps encourage national development. The DGIPR is not an autonomous body – it is a part of the central administration of the Ministry of Law and Human Rights. Currently, all application fees go to the central government, and the government returns 25% of the total to the DGIPR. This percentage is expected to increase in the near future in order to meet the office’s increasing demands.

DGIPR has seven units:

 Secretariat of the Directorate General  Directorate of Copyright, Industrial Design, Layout Design of Integrated Circuits, and Trade Secrets  Directorate of Patents  Directorate of Trademarks  Directorate of Cooperation and Development  Directorate of Information Technology  Directorate of Investigation

The DGIPR’s total staff in 2010 comprised 537 employees, an increase of five percent from 2006. Despite this overall increase, there has been minimal change in the numbers of staff in the Directorate of Patents and the Directorate of Trademarks. In 2010, there were 134 staff in the Directorate of Patents and 148 in the Directorate of Trademarks. Of these, 71 are patent examiners and 43 are trademark examiners.39 Established in April 2011, the Directorate of Investigation is the newest division, with 13 investigators among its total staff of 22.

Table 10 Number of DGIPR Staff in 2006 - 2010 Number Directorate/Type of personnel 2006 2007 2008 2009 2010 Directorate of Patents 130 127 131 129 134 Patent examiners 70 70 70 72 71 Directorate of Trademarks 144 144 142 144 148 Trademark examiners 43 43 43 43 43 Directorate of Copyright 62 63 64 68 72 Directorate of Cooperation and 38 35 37 40 36

39 Eka Fridayanti, Presentation of Country Report (2008), in WIPO-SIDA Training on Copyright and Related Rights in the Global Economy, http://www.google.co.th/#q=Indonesia+DGIPR+Budget&hl=th&biw=1259&bih=839&prmd=ivns&ei=8FI9TZa oCoXsrQfvwJDxCA&start=20&sa=N&fp=524bfab90b81a456 (accessed January 24, 2010). 42

Number Directorate/Type of personnel 2006 2007 2008 2009 2010 Development Directorate of IT 38 36 37 37 36 Secretariat of Directorate General 99 107 103 96 111

Administrative staff - - - - - Total 511 512 514 514 537 Source: DGIPR

Table 11 Number of Examiners by Educational Profile Degree

Bachelor Master Doctoral Office High Non- Non- Non- school Science Science Science science science science Patent - 53 - 2 15 - 1 examiners Trademark 6 - 25 - 12 - - examiners Source: DGIPR

A majority of the 114 patent and trademark examiners possess at least a bachelor’s degree. Specifically, 77.5% of patent examiners have a degree in science, which is necessary to examine patent applications related to science and technology. Some 74.6% of the patent examiners have bachelor’s degrees, whereas 23.9% graduated with a master’s degree. Only 2.8% of the patent examiners, however, have a master’s degree in science.

Of the total 43 trademark examiners, 58.1% have a bachelor’s degree, and 27.9% have master’s degrees. All of the trademark examiners come from non-science fields.

Table 12 Number of Examiners by Years of Experience Less than 5 More than 20 Office 5-10 years 10-15 years 15-20 years years years

Patent 11 5 14 41 - examiners

Trademark 11 7 12 13 - examiners

Source: DGIPR

Indonesian patent examiners are highly experienced; 57.7% have more than 15 years of experience and 19.7% have between 10 and 15 years. On the trademark side, 30.2% of the examiners have more than 15 years of experience and 27.9% have 10-15 years; Indonesian examiners then, are very experienced compared to their counterparts in most other ASEAN countries.

In terms of salary, a new patent examiner receives around IDR 2,487,800, slightly below the salary of an ‘order engineer.’40 The maximum salary of a patent examiner is approximately IDR 4,603,800, which is rather low for an engineer with extensive experience. A new trademark examiner receives about IDR 2,061,700, comparable to a human resource assistant in the private sector. A highly experienced trademark examiner earns a relatively low salary of IDR 4,515,800, well below that of an HR training manager with five to six years of experience.41 In 2011, the parliament agreed to increase staff compensation via a new scheme, currently paying employees an additional 70% of their standard pay; moving forward, the remuneration percentages will be adjusted in accordance with each staff’s level (from level 1 to 17).

Based on Presidential Regulation Number 14 of 2011, remuneration to the patent examiner at level 6 to 10 will be between IDR 2,095,000 - 3,352,000, while for the trademark examiner at level 5 to 10, remuneration will be between IDR 1,904,000 - 3,352,000.

In April 2011, the Directorate of Patents changed its organizational structure to include a Sub-Directorate of Classification and Search in charge of classification and search to support patent examiners and third parties who need the data search information. It currently has nine candidate examiners who previously handled classification and search procedures as patent examiners. In 2012, 12 candidates, prepared by the Directorate of Patents, will undergo on- the-job training to be appointed as patent examiners.

Patent Applications

Indonesia ratified the Patent Cooperation Treaty (PCT) in 1997, and most patent applications (81.61%) come via the PCT, especially for foreign applications (99.86%). Domestic patent applications represent 6.8% of the total applications; however, when factoring in petty patent applications, this proportion improves slightly to 10.8% of the total.

Domestic patent applications filed through the PCT in June 2010 showed a marked increase, indicating the increased awareness of local applicants to register patents through this channel. Similarly, foreign patent applications increased dramatically, while foreign petty patent applications remained the same. This situation may reflect the impact of the global economic crisis.42 Looking more closely at country of origin, EU countries make up the greatest percentage of applicants, followed by the United States, Japan and Indonesia (Chart 11).

40 Kelly Services Indonesia, Indonesia Employment Outlook and Salary Guide, 2009/2010, http://www.kellyservices.co.id – With a degree and 2-3 years of experience – Order engineer handling and technical review; fabrication drawings to vendors and customers; mechanical design; & QA/ QC inspection. 41 Kelly Services Indonesia, Indonesia Employment Outlook and Salary Guide, 2009/2010, http://www.kellyservices.co.id 42 Cita Citrawinda Noerhadi and Prayudi Setiadharma, Report of the APAA 58th Council Meetings. 44

Table 13 Patent applications received by year, broken down by domestic and foreign filers

Patent Petty Patent

Year PCT Non PCT Total Domestic Foreign Total Domestic Foreign Total Domestic Foreign Total

2001 4 2,901 2,905 208 813 1,021 197 24 221 4,147

2002 6 2,976 2,982 228 633 861 157 48 205 4,048

2003 0 2,620 2,620 201 479 680 163 29 192 3,492

2004 1 2,989 2,990 226 452 678 177 32 209 3,877

2005 1 3,536 3,537 234 533 767 163 32 195 4,499

2006 6 3,805 3,811 282 519 801 242 26 268 4,880

2007 5 4,357 4,362 279 493 772 209 34 243 5,377

2008 11 4,278 4,289 375 469 844 214 34 248 5,381

2009 2 3,761 3,763 413 342 755 247 38 285 4,803

2010 11 4,596 4,607 497 401 898 251 38 289 5,794 Total 47 35,819 35,866 2,943 5,134 8,077 2,020 335 2,355 46,298 Source: WIPO and DGIPR43

Chart 11 Numbers of patent application based on country (1991-2009)

Number of patent application based on country (1991-2009)

25000 20000 15000 10000 5000 0

Source: DGIPR44

43 World Intellectual Property Organization, http://world-intellectual-property organization.com/edocs/mdocs/aspac/en/wipo_inn_bkk_10/wipo_inn_bkk_10_ref_indonesia.pdf 44 World Intellectual Property Organization, http://world-intellectual-property organization.com/edocs/mdocs/aspac/en/wipo_inn_bkk_10/wipo_inn_bkk_10_ref_indonesia.pdf 45

The number of requests for substantive examination has increased steadily each year. Notwithstanding, there were only a few patents granted to local applicants. Generally, the number of granted patents has differed significantly between local applicants and foreigners. Domestic granted patents have accounted for only 4.6% of the total since 2005. (Table 14)

Table 14 Numbers of patent granted from 2003 to June 2010

Year Patent Petty Patent Domestic Foreign Total Domestic Foreign Total

2003 16 2,828 2,844 61 6 67

2004 33 2,610 2,643 78 21 99

2005 24 1,634 1,658 60 13 73

2006 33 1,728 1,761 61 12 73

2007 70 1,741 1,811 79 20 99

2008 219 1,944 2,163 69 204 273

2009 102 2,282 2,384 81 25 106

2010 508 4,997 5,505 251 38 289

Total 1,005 19,764 20,769 740 339 1,079 Source: DGIPR45

Table 15 Number of patent refused and withdrawn from 2003 to June 2010 Patent and Simple Patent Year Refused Withdrawn Domestic Foreign Total 2005 63 44 107 1,291 2006 37 19 56 817 2007 13 13 26 1,527 2008 5 16 21 547 2009 38 58 96 1,254 2010 29 84 113 2,121 Total 185 234 419 7,557 Source: DGIPR

Of the total refused applications, the percentage of refused foreign applications (55.8%) is slightly higher than that of domestic applications (44.2%). For the period of 2003 to June 2010, the number of refused applications was a negligible 1% of the total applications. Withdrawn applications, on the other hand, accounted for 17.3% of the total.

45 Noerhadi, “Report of the 58th Council Meetings,” 4. 46

The annual percentage of pending applications between 2005 and 2010 was around 5.2% of total patent and petty patent applications.46

Patent Procedures

Chart 12 shows the complete Indonesian patent procedure, including formality examination, search, and substantive examination. The first stage of patent procedure in the national phase is filing. Patent applicants must submit their application in the Indonesian language on the prescribed forms to the Patent Office. Foreign patent applications must be filed by a registered patent consultant in Indonesia. The filing process adheres to the “first-to-file” principle, meaning that a patent, if approved, will be granted to the first person to file.

The typical duration for the entire process is six years: 36 months before the request for substantive examination and 36 months after that request. This substantial pendency period is explained by the aforementioned large volume of pending applications. The DGIPR has taken an initial step toward maximizing process efficiency by adopting a standard language of formed paragraphs for notifying applicants on the status of their claims.

According to DGIPR, the average time required to register a patent is 5.6 years under the normal method and 4.9 years via PCT, which expedites the international search and international preliminary examination phases. In reality, many applicants experienced a longer pendency period of 7-8 years.47

Table 16 Number of Application per Patent Examiner 2006 2007 2008 2009 2010 No. of Application 4,880 5,377 5,381 4,803 5,652 Patent Examiners 70 70 70 72 71 Application/Examiner 70 77 77 67 80 Source: Calculated from DGIPR data

In 2010, there were 71 patent examiners. Table 11 shows that most of the examiners have a technical background, with 77.5% of examiners possessing a science degree. Most of the examiners are also very experienced; 57.7% have more than 15 years of experience and 19.7% have between 10 and 15 years. Nonetheless, examiners will still benefit from trainings on patent searching and examination. The handling of domestic files, for which no search reports exist, takes a significantly longer time than do foreign files. On average, a patent examiner is responsible for 74.2 applications per year, spends 20 hours on a given file, and is able to handle 60 full files per year. The examiners follow EPO guidelines for search and examination.

A shortage of examiners is reportedly the most common problem leading to delays in the patent procedure; these delays are exacerbated by the inadequacy of existing search tools, Internet connection problems, and computer hardware problems.

47 Expert opinion 47

Furthermore, applications in emerging fields, such as nanotechnology, biotechnology, and inventions related to computers, require more time and specialized knowledge from examiners. To alleviate this problem, Indonesia received technical trainings for patent examiners in new fields from WIPO-KIPO and WIPO-JPO, among others. For general training of patent agents, the program is run by local universities in cooperation with the Ministry of Education for around six months at a fee of approximately IDR 25 million (USD 2,500).

Most patent applications that failed to be granted were incomplete or poorly drafted. Some applications are improperly translated into Bahasa Indonesian, causing the misunderstanding of claims and the protection of patents. Consequently, heightened public awareness, together with applicant or patent agent training, would help to decrease the number of application failures.

Chart 12 Procedure of Patent Application

Patent Application

Correction has been done

Formalities Chances for Application Considered Examination Correction To Be Rejected Documents do Correction has not meet the not been done requirement Publication

No Request for Substantive Examination Requesting a Substantive Application Considered Examination To Be Rejected

Substantive Examination Application Considered Result/Report Notification Substantive examination To Be Rejected Unsatisfied result does not meet the Answer requirement

Granted File an Appeal Is Granted Appeal

Appeal Commission

Published in the Unsatisfied Commercial Court for BRP Appeal Is Rejected Court Cassation

Source: DGIPR Regional Intellectual Property Office and Widjojo Law Firm & Consultant

A point of concern that remains is the excessive, unnecessarily long final phase of the patent procedure. While examination is squarely the responsibility of the Patent Department, the flow of patent files from approval to issuance is out of the Department’s hands. All patent certificates and other written communications to the applicants must be signed, and while patent examiners may sign communications, only the Director of the DGIPR is permitted to sign the certificate. With an average of 4,377 grants issued per year, each entailing various written communications, official letters and a certificate, the required formal approval creates a major bottleneck within the patent system. However, DGIPR intends to solve the problem by changing the examination procedure in 2011. Previously, an examination required three examiners for each application, and stipulated that the decision be signed by the director. Moving forward, there will be only two examiners per application, and the formality examination can be signed by the head of the patent division. This streamlining of the procedure should decrease registration time.

To decrease registration times further, oral proceedings between applicants and examiners must be facilitated continually in order to enhance understanding of how to draft applications and claims. DGIPR expects that this method will contribute significantly to solving the backlog issue in 2011.48

Just this year, DGIPR has launched two special programs aimed at reducing the backlog of applications. First, the office’s administration has allowed for examiners to work extra hours at increased pay; also, if applicants or their agents delay in responding to application issues, the office now has the power to reject the application.

Trademark Applications

The number of trademark and service mark applications filed between 2000 and 2010 is shown in Table 17. Domestic trademark applications represent 75.4% of the total applications and grew at an average rate of 15.5% per year.

From 2000-2010, 70.8% of trademark applications were granted, whereas 14.6% were refused, and only 0.3% were withdrawn. Over this period, approximately 1.3% of applications were still pending annually.49

The main reasons that trademark applications fail to result in registration are due to bad faith. The first-to-file system adopted by Indonesia has led to abuses of well-known foreign trademarks by local malefactors, who register these marks long before actual sales start. Such opportunistic applications often file the applications without obstacle unless the genuine owner has diligently filed early in Indonesia. Sometimes they are able to circumnavigate marks in other classes, as the trademark office search systems are inadequate. Some pirate registrations are used on lookalike products; others are held until the real owner buys the mark.50

48 The law stipulates a backlog as an application that is still in the process after 36 months from the filing date.

50 Kusumadara, Afifah. Problems of Enforcing Intellectual Property Laws in Indonesia http://www.ialsnet.org/meetings/business/KusumadaraAfifah-Indonesia.pdf (accessed April 18, 2011). 49

Moreover, some trademark applications did not meet legal requirements, also causing the application to be refused. For example, the mark may contradict public order, morality, or the existing law; the mark may be public property; or the mark may be similar in principle or entirety to other registered marks or well-known marks for the same goods.51

Table 17 Statistics on Application and Registration of Trademarks and Service Marks (2000 - 2010)

Application Year Registered Refused Withdrawn

Domestic Foreign Total

2000 10,242 4,599 14,841 22,098 923 180

2001 26,128 12,520 38,648 35,878 3,969 117

2002 20,423 9,581 30,004 23,356 2,421 84

2003 28,317 8,023 36,340 35,353 3,527 83

2004 35,626 13,685 49,311 23,187 3,044 16

2005 30,734 10,082 40,816 28,404 3,563 94

2006 36,644 16,005 52,649 24,677 6,291 105

2007 32,181 11,078 43,259 34,165 11,519 142

2008 33,555 14,051 47,606 26,543 11,900 130

2009 37,759 5,018 42,777 25,087 9,102 127

2010 43,269 4,525 47,794 35,774 8,668 214

Total 334,878 109,167 444,045 314,522 64,927 1,292 Source: Directorate General of Intellectual Property Rights, Indonesia

Trademark Procedures

The complete trademark procedure is presented in Chart 13. The nine-month substantive examination is essential. The shortest possible duration of the procedure is 16 months, when there is no opposition to the application. The longest possible duration is 24 months. The term of protection lasts 10 years from the filing date. A renewal application must start 12 months before the end of the protection period.

The average time to register a trademark is 18 to 24 months.52 Taking the Office for Harmonization in the Internal Market (OHIM) as a benchmark, 24 months is 33% longer than the 18 month limit within which the OHIM must notify WIPO.

51 Budiardjo, Ali., Nugroho and Reksodiputro, Guide to Doing Business in Indonesia, March 2005, p.25-26. http://www.prac.org/newsletters/Ali_2005.pdf (accessed April 18, 2011). 52 Patrick Mirandah Co. (PMC), www.mirandah.com (accessed January 23, 2011). 50

Chart 13 Procedure of Trademark Application (Based on Law No.15 Year 2001 on Trademark)

REGISTRATION (Article 7-17)

 30 days since date of receipt (Article 18[1]) SUBSTANTIVE  Substantive Examination for 9 (nine) months [Article EXAMINATION 19(3)]  Publication in BRM [Article 20 [1])

REJECTED PUBLICATION (Article 21) Written Notification (30 days after the date of receipt) 10 days after approval to register

PUBLICATION (Article 22) OPPOSITION REBUTTAL 3 months after published in BRM (Article 24) (Article 25) 2 months

A copy of this correspondence must be sent to applicant within 14 days from receipt (Article 24[3])

ACCEPTED REJECTED RE-EXAMINATION (Article 26 [2]) for 2 (two) months

REJECTED

DELETION REGISTERED (Article 61) (Article 27[1]) CANCELLATION 30 days after end of APPEAL (Article 31[3]) (Article 68) publication for 3 (three) months

ACCEPTED REJECTED REJECTED ACCEPTED 10 years

RENEWAL Starting in 12 months before end of mark protection (Article 35[2])

Source: DGIPR Regional Intellectual Property Office and Widjojo Law Firm & Consultant

The draft Trademark Bill, which was circulated in March 2010, aimed at reducing the registration time to 12 months. Shortening the process would occur through 1) allowing trademark applications to be published for opposition purposes before examination by the Trademark Office, and 2) shortening the timeframe for reviewing an application from 9 to 6

months.53 Due to computer hardware problems and the inadequacy of existing search tools, the shorter timeframe is expected to be difficult to achieve unless the IT problems are effectively addressed. Although Indonesia is not yet a member of the Madrid Protocol, this new bill would provide for filing using the Madrid Protocol.

Reportedly, the possible problems that could lead to delays in the patent procedure, in order of importance, are computer hardware problems, inadequacy of existing search tools, lack of qualified examiners and lack of experienced examiners.

Table 18 Number of Applications per Trademark Examiner 2006 2007 2008 2009 2010 No. of Application 52,649 43,259 47,606 42,777 47,794 Trademark Examiners 43 43 43 43 43 Application/Examiner 1,224 1,006 1,107 995 1,111 Source: Calculated from DGIPR data

Automation and Information Technology

Examiners utilize prior art search tools from Esp@cenet (European Patent Office), PATENTSCOPE® (WIPO including PCT) and USPTO. DGIPR also received assistance from EPO, and is currently using the Global Patent Index (GPI) for two year trial basis at no cost.

Additionally, Indonesia employs the Industrial Property Digital Library (IPDL) internal system, a realization of cooperation between the Ministry of Law, DGIPR, and Japan International Cooperation Agency (JICA), to search for domestic information on patents and trademarks. Applicants and examiners can search patents, petty patents and trademarks by filling out search conditions on the IPDL website. However, the existing national database is insufficient. Such searches are limited as the system only shows the bibliography of the application.

Trademark data at the General Register of Trademarks can be searched to discover conflicts with previously registered marks. The search process, however, can take a long period of time since neither domestic nor foreign prior trademark data are computerized. Pending trademark applications are published in the Trademark Journal, and a search of back issues of this journal may be requested. However, these data have not yet been computerized and, consequently, the search must be performed manually. This process can take three to four months. Registered trademarks are published in the State Gazette.

53 Muhammad Iqsan Sirie and Eli Moselle, “Upcoming Revision to Trademark Law May Not Solve Slow Registration Process,” (2010), http://en.hukumonline.com/pages/lt4bcda930e4035/upcoming-revision-to- trademark-law-may-not-solve-slow-registration-process (accessed January 23, 2011). Humphreys & Co., “Malaysia and Indonesia – Trademark Update,” WTR Weekly Trademark Update, September 9, 2010, http://www.humphreys.co.uk/articles/trade_marks_1563.htm (accessed January 23, 2011). 52

DGIPR is equipped with 660 computers and 38 servers. The majority of the computers have Intel Core 2 duo processors with an Internet speed of 4 Mbps. There were significant improvements in the office’s IT equipment in 2009 as approximately half of the computers in the patent division were replaced with new machines. The hardware problem has been partially solved; however, due to the current situation in which old computers remain and the system is occasionally impaired by viruses, IT assistance is still needed.

In April 2010, the DGIPR signed a MOU with the Korean Intellectual Property Office (KIPO) on technological cooperation to develop the IP office automation system based on the technologies used by KIPO, and valued at USD 40 million.54 However, in late December 2010, the Minister of Justice and Human Rights Affairs, together with the Director General of IPR, reviewed the MOU, as the system was considered expensive and different from others being used throughout the region. In 2011 the Director General of IPR signed a MOU with WIPO for a new IPA system that is used by other ASEAN IPR offices.

In the near future, the DGIPR also plans to develop additional automated programs as follows:

 E-filing – an electronic filing system for patents, trademarks, industrial designs and copyrights  IPR E-gazette – digital IPR publication information using media Compact Disk  Other developments: - DGIPR Corporate Portal and Knowledge Center Development - WAN and DGIP net - Data Warehouse and Disaster Recovery Center - Electronic IP Documentation Code Standard and IP Documentation Type - Remote connection of mobile offices55

Enforcement

The responsibility of DGIPR in the area of enforcement is limited, making it essential for the Commercial Court and State Police to enforce the laws. However, the DGIPR does have a role to play in the enforcement of IPR, including:

 Making experts available to the Court and Police  Representing the government in civil disputes  Investigating any complaints concerning IPR  Sending warnings to the managers of shopping centers and stores regarding the sale of counterfeit products  Sending letters to companies regarding the repercussions of buying pirated computer systems  Organizing specialized training courses for law enforcement officers, including police, public prosecutors, judges and civil service investigators.

54 Korean Intellectual Property Office, “Korean IP Office Automation System Exported to Indonesia,” Korea.net, May 7, 2010, http://www.korea.net/news.do?mode=detail&guid=46494 (accessed January 26, 2010). 55 World Intellectual Property Organization, http://www.world-intellectual-property- organization.com/edocs/mdocs/aspac/en/wipo_reg_ip_mnl_10/wipo_reg_ip_mnl_10_ref_u_indonesia.pdf 53

As of April 2011, DGIPR’s newly established Directorate of Investigation is generally responsible for law enforcement, and especially for crime investigation. Most cases involve trademarks, copyrights, and designs, such as spare car parts, with only 2-3 cases of patent infringement per year.

Chapters XII, XIII, XIV, and XV of the Patent Law No. 14 are explicit on the subject of enforcement and disputes, and essentially give responsibility for the adjudication of IP crimes to the Commercial Court. Upon a decision of that court, a cassation (appeal) may be filed with the Supreme Court.

The law contains some criminal provisions in the event of infringement. According to article 130 of the Patent Law, “Any person who deliberately and without right infringes the rights of a patent holder… shall be sentenced to imprisonment of at most four years and or a fine of at most IDR 500,000,000.” For simple patents, sentences can be as severe as two years imprisonment and fines of up to IDR 250 million.

Trademark Law No.15, Chapter XV, Articles 90 to 94 includes civil and criminal provisions for trademark infringement. The maximum fine for trademark violations is IDR 1 billion and/or a maximum five years of imprisonment. Apart from this, Article 1365 of the Civil Code provides a basis for punishing all unfair competition, including IP infringement, whereas Article 382bis of the Criminal Code provides a basis for action against misuse of trademarks or trade names. Trademark cases can be settled through the Commercial Court, arbitration or other alternative forms of dispute resolution, such as negotiation, mediation and conciliation.

The responsibility for investigation belongs to Indonesia’s State Police (POLRI) and civil servant investigators (PPNS). Nevertheless, alternative dispute resolution methodologies, such as mediation, arbitration and conciliation, are available and encouraged in place of litigation through a Court of Law.56

In civil procedures, the General Courts are responsible for IPR cases. Trademark, patent and copyright disputes are under the jurisdiction of Central Jakarta District Court. An appeal can be filed in the Supreme Court of Indonesia with special panels of justices. This was so determined in order to have IPR cases professionally adjudicated by specialized justices.57

In the past, Indonesia has been known for its weak legal enforcement of IP laws. The enforcement of the laws was considered ineffective due to a lack of human and financial resources. However, since 2006, the Indonesian government has set up a national taskforce to deal more effectively with IP infringement under Decree No. 4 of 2006 regarding the Establishment of a National Task Force. All activities of the national taskforce are supposed to be in accordance with Intellectual Property National Policy (IPNP). In accordance with the taskforce’s strategic direction, all related government agencies are working together, especially the police, the customs and the public prosecutor’s office. There is supposed to be a system for sharing IP counterfeiting cases between these agencies as well.58

56 DGIPR, “Enforcement of Intellectual Property in Indonesia,” 3-4. 57 Mustafa, Marni Emmy. Enforcement of Intellectual Property Rights in Indonesia, March 2006. http://www.training.iprsupport-jpo.jp/en/modules/smartsection/makepdf.php?itemid=62 58 Brett McGuire, “Indonesia – IP Taskforce Steps up to the Plate,” The WTR Daily Newsletter, February 4, 2010, http://www.iprights.com/content.output/913/913/Resources/Articles/Indonesia%20- %20IP%20taskforce%20steps%20up%20to%20the%20plate.mspx (accessed January 21, 2010). 54

Moreover, the director general of DGIPR intends to speed up the case decision process of the IP courts from four months to only one month, and intends to increase the penalties for infringement as well.59 Although achieving this will be a challenge, the effort is a good start toward needed improvements.

Recommendations

1. Establish the DGIPR as an autonomous body so that it may keep all user fees it receives and exercise control over important operational aspects such as examiner recruitment

2. Reduce backlogs and pendency time by improving access to search tools and eliminating bottlenecks created by unnecessary formal approvals

3. Improve the IT infrastructure significantly for administrative management procedures

4. Strengthen staff training, particularly in the areas of PCT handling, examination and IT

5. Allow for convenient communication between applicants and patent examiners in order to speed up the patent registration process

6. Improve database, hardware, and search tools

7. Improve training for examiners and administrative staff

8. Increase public awareness and applicant or patent agent training in order to decrease the number of application failures

59 Brett McGuire, “Intellectual Property Revamp Holds Much Promise,” The Jakarta Globe, November 17, 2010, http://thejakartaglobe.com/business/brett-mcguire-intellectual-property-revamp-holds-much- promise/342204 (accessed January 21, 2010).

III. LAOS

Overview

In 2010, the GDP of the Lao People’s Democratic Republic reached USD 15.68 billion. With a population of 6.47 million, per capita GDP was USD 2,400, when adjusted for purchasing power parity. Laos’ real GDP growth rate increased from 7.5% in 2009 to 7.8% in 2010. The composition of GDP, by sector, was 38.5% from services, 31.7% from industry and 29.8% from agriculture. The country’s major trade partners were its neighbors, Thailand, China and Vietnam. Principal export commodities were wood products, coffee, electricity, tin, copper and gold, while key imports included machinery and equipment, vehicles, fuel and consumer goods.60

Legal Framework

IP policy and administration in Laos have made significant progress in the past five years. Laos has received useful assistance from organizations such as the WIPO, which helped establish the country’s IP legal framework and provided instruction on its operation. Additionally, the ECAP II, a program funded by the European Patent Office (EPO) and the Office for Harmonization in the Internal Market (OHIM), assisted Laos in enhancing its knowledge regarding the benefits of developing IP legislation. Concurrently, the French Government also provided support on the development of the Geographical Indication System in Laos, which included assistance in drafting and promulgating related laws and regulations. Moreover, IP professionals, supported by Japan’s Association for Overseas Technical Scholarship (AOTS), assisted foreigners in obtaining registrations for patents and trademarks in Laos.

In order to develop an IP regime in Laos, it is important to ensure that all established laws, regulations, and decrees are implemented. In addition, the dissemination of knowledge, particularly among politicians and high-ranking officials, will be useful moving forward. Furthermore, the importance of IP in economic development must be promoted within both the public and private sectors, while the general public must be made aware of relevant benefits for product and service quality and safety.

The Lao government recognizes the important role of IPR in the nation’s development. Consequently, it has sought to modernize and strengthen its IP administration. IP protection is seen as an incentive for investment and economic development.

Laos is currently a member of WIPO and the Paris Convention. In 2006, Laos joined the Patent Cooperation Treaty (PCT). As of 2010, the country is also preparing to join the Bern Convention for the Protection of Literary and Artistic Works.

There have been three key developments in IP legislation in Lao:

60 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/la.html, (accessed on March 14, 2011). 56

 The Prime Minister’s Decree on Trademark Registration No. 06/PM dated January 18, 1995, and the expanded regulation No. 1466/STEA-PMO amended on March 7, 2002. Both were intended to improve protection of trademarks.  The Prime Minister’s Decree on Patent, Petty Patent and Industrial Design No. 01/PM dated January 17, 2002, and the expanded regulation No. 322/STEA-PMO.  The Intellectual Property Law of the Presidential Office of Lao PDR No. 06/PO dated January 14, 2008.61

In 2010, Lao was in the process of completing a comprehensive law to protect patents, utility models, industrial designs and other areas of IPR in order to more fully meet its obligations under the 1979 Paris Convention for the Protection of Industrial Property, to which the country acceded in 1998.

Intellectual Property Office

In 1990, the government established the Department of Intellectual Property, Standardization and Metrology (DISM) within the Science, Technology and Environment Agency (STEA), which has since come under the National Authority for Science and Technology (NAST), attached to the Prime Minister’s Office. The DISM, which has branch offices in all provinces, consists of five divisions: the Industrial Property Division (IPD), the Copyright Division, the General Affairs Division, the Standards and Quality Division and the Metrology Division. The IPD is subdivided into four sections: Trademark and Geographical Indication, Patent and Petty Patent, Industrial Design and Plant Variety Protection.

Chart 14 Organization Chart of DISM

Director General

Deputy Director General Deputy Director General

Division

Division Division

GeneralAffairs

IndustrialProperty

Metrology Standard and Quality Quality and Standard

Source: Youtrichanthachak, Sida. “Digitalization and Dissemination of Intellectual Property (IP) Information and Utilization of Effective Search Tools.62

61 WIPO and UNESCAP, “Current Intellectual Property Situation in Laos,” October 2008, http://www.unescap.org/tid/projects/iprt_lao.pdf (accessed on March 14, 2011). 57

DISM has four main roles: 1) to administer IP matters in Lao; 2) to encourage and promote inventiveness, creativity, technology transfer and technological research; 3) to cooperate with international organizations and other countries in the field of IP; 4) to draft IP laws and regulations to ensure the protection of IPR.

In 2010, the IPD had roughly 15 employees, excluding staff in provincial offices. Each provincial office has at least two staff members, and some offices have trainees to assist with rising workloads.63 The number of patent examiners has remained constant, at two since 2006, whereas the number of trademark examiners fell to two persons in 2010. All examiners have bachelor’s degrees in non-science fields. Both trademark examiners have less than five years of experience, while the patent examiners have between 5 and 15 years. Although a computer system is important to the search and registration of trademarks, the IP office has only one IT staff person to support the system. More details are shown in Table 19 Table 21.

Currently, the limited staff suffices, given the small volume of applications received. The starting salary of patent and trademark examiners is above the country’s minimum wage at KIP 670,000, whereas the highest examiner salary is KIP 810,000.64 While these government salary rates are low compared to salaries in the private sector, job security for government workers is higher.

DISM is funded by, and sends revenues to, the central government. Its annual revenues in 2010 were KIP 80 million, an increase of 60% from total revenues in 2006. However, in the past its revenues always exceeded the budgets allocated from the government. The allocated budgets were viewed as inadequate to make necessary improvements to DSIM’s services.

Table 19 Industrial Property Division Personnel Number of staffs Type of personnel 2006 2007 2008 2009 2010 Patent, Petty Patent and Industrial 3 3 3 3 3 Design Section Trademark Section 7 8 9 8 7 IT staff 1 1 1 1 1 Total 11 12 13 15 15 *Patent examiners (assistant 2 2 2 2 2 examiners included) *Trademark examiners (assistant 3 3 3 4 2 examiners included) Source: NAST

62 World Intellectual Property Organization, http://www.wipo.int/edocs/mdocs/aspac/en/wipo_reg_ip_mnl_10/wipo_reg_ip_mnl_10_ref_u_lao.pdf (accessed March 14, 2011) 63 The USAID funded, “An Assessment of the Laos’s Intellectual Property System,” 68. 64 The minimum wage of the country is currently at KIP 348,000. Laos Voices, “Minimum wage increase unlikely to affect inflation,” April 13, 2011, http://laovoices.com/2011/04/13/minimum-wage-increase-unlikely- to-affect-inflation/ (accessed May 23, 2011) 58

Table 20 Number of Examiners by Years of Experience Less than 5 More than Office 5-10 years 10-15 years 15-20 years years 20 years Patent - 1 1 - - examiners Trademark 2 - 0 - - examiners Source: NAST

Table 21 Number of Examiners by Educational Profile Degree

Bachelor Master Doctoral Office High Non- Non- Non- school Science Science Science science science science Patent - - 2 - - - - examiners Trademark - - 2 - - - - examiners Source: NAST

Table 22 Range of Salary Earned by Patent and Trademark Examiner IP Examiners Starting Highest

Patent examiner KIP 400,000 KIP 600,000 Trademark examiner KIP 400,000 KIP 600,000 Source: NAST

Patent Applications

Since 2005, the IPD has received more than 100 patent applications in total. The Division has received 1 PCT application since 2007, the year Laos joined the treaty. Foreign applications comprised the majority, representing more than 90% of total applications over six years. Most of the domestic applications were for petty patents. As DISM is still awaiting results from international search reports, no patents have been granted by the office to date.

Table 23 Lao Patent Applications and Registrations

Applications Granted Refused Withdrawn

Year Patents Patents Patents Patents Domestic Foreign Total 2005 3 4 7 0 0 1 2006 2 11 13 0 0 1 2007 2 21 23 0 0 0 2008 1 37 38 0 0 0 2009 0 18 18 0 4 1 2010 0 20 20 0 0 1 Total 8 111 119 0 4 4 Source: NAST and DISM65 Note: Data excluded petty patents as there was no filing application.

Patent Procedure

Patents in Laos must fulfill the three general criteria of novelty, inventiveness and industrial application. To obtain patent protection, applications for registration must be submitted to the IPD. Priority is given to the first person who files an application for a particular invention. An individual or legal entity of a foreign country seeking to file a patent application in Laos must apply through a representative authorized and permitted by the DISM. The application for a patent or petty patent must be submitted in the Lao language. In the case that the applicant is a foreigner, the application can be submitted initially in English or French, but a Lao translation must be submitted within 90 days from the date of filing.

After filing the application, the IPD will conduct a formality examination only, and will then rely on foreign patent offices and the WIPO for a search and substantive examination. Patent registration takes approximately 50 months from filing date to granting; however, the registration period for petty patents takes only 12 months. The protection period for patents is 20 years from the filing date, with 10 years of protection provided for petty patents.66

The primary reasons for delays during the patent procedure are all related to IT and include an insufficient Internet connection speed, computer hardware package, and internal database. A secondary problem is a shortage of experienced and qualified examiners. A lack of trained, professional examiners and officials with science degrees inhibits the office’s efficiency. While the number of patent examiners has remained stable since 2006, the number of applications fluctuated over the period, affecting the ratio of applications per examiner. The ratio, however, has generally remained acceptable; therefore, the problem most likely stems from the education and experience of the examiners.

65 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/archive/fileadmin/ecapII/pdf/en/information/laos/lao_ip_statistics_2000_2007.pdf (accessed March 14, 2011) 66 Tri Viet & Associates, http://www.trivietlaw.com.vn/webplus/viewer.print.asp?aid=119&l=EN, (accessed on March 14, 2011). 60

Table 24 Number of Application per Patent Examiner 2006 2007 2008 2009 2010 No. of Application 13 23 38 18 20 Patent Examiners 2 2 2 2 2 Application/Examiner 6.5 11.5 19 9 10 Source: calculated from NAST data

Trademark Applications

In 2010, the office received 2,417 trademark applications, a 66% increase from the previous year. Registrations have followed a similarly dynamic trend. Total foreign applications have greatly exceeded domestic applications every year, accounting for 95.3% of all applications, on average. Interestingly, there were no withdrawn applications in Lao, and only six trademark applications were refused.

Table 25 Number of Trademark Applications and Registration (2005-2010)

Applications Granted Refused Withdrawn

Year Trademarks Trademarks Trademarks Trademarks Domestic Foreign Total Domestic Foreign Total 2005 70 1,714 1,784 42 996 1,038 0 0 2006 91 1,472 1,563 97 1,075 1,172 0 0 2007 81 1,683 1,764 58 1,366 1,424 0 0 2008 97 2,096 2,193 108 3,737 3,845 4 0 2009 88 1,508 1,596 80 936 1,016 1 0 2010 107 2,310 2,417 110 1,461 1,571 1 0 Total 534 10,783 11,317 495 9,571 10,066 6 0 Source: NAST and Youtrichanthachak, Sida. “Digitalization and Dissemination of Intellectual Property (IP) Information and Utilization of Effective Search Tools.67

Trademark Procedures

Laos has adopted the “first-to-file” system of trademark registration. Once the trademark owner files an application and the application has been received, the DISM will issue a filing number with filing date to the trademark owner. A formality examination will be conducted by trademark examiners to identify any prior registered marks that are identical with or similar to the claimed mark. If the application does not meet requirements, or if the mark conflicts with a previously registered mark, the Trademark Registry will inform the applicant to amend the trademark within 90 days of the date of the notice.

67 World Intellectual Property Organization, http://www.wipo.int/edocs/mdocs/aspac/en/wipo_reg_ip_mnl_10/wipo_reg_ip_mnl_10_ref_u_lao.pdf (accessed on March 15, 2011) 61

If the mark passes the formality examination, an officer will assign a trademark number and charge a fee to the mark owner. Next, a substantive examination of the trademark will be conducted in accordance with the Trademark Decree Articles 10 and 12. If the mark is not in order, an officer will notify the trademark owner of the objection to registering the trademark. The owner of the trademark must then correct the problem, or prepare further documentation, as required by the registration office, and re-submit the mark application. If the trademark examination is in proper format and passes the examination, the trademark will be registered and advertised in the Official Trademark Gazette. (Chart 15)

A Certificate of Trademark Registration is usually granted within six months of the application date. Renewal applications take three months to process. The official charge for registration of a trademark in Laos is KIP 1,120,000, and must be paid at the filing stage.

Once the trademark has been registered and published, the owner of any conflicting mark has the right to file an opposition that will be officially reviewed and judged by the DISM. The parties have the right to appeal to the DISM, the Organization for Settlement of Disputes, or the courts. The opposition can be based on the grounds of prior registration, prior application or non-use.

Primary reasons for delays during the trademark procedure, as in the case of the patent process, involve IT issues. Insufficient search tools pose the biggest problem, followed by slow internet connections and outdated computer hardware. The average ratio of applications per trademark examiner fluctuated, with the highest ratio in 2010 at 1,209 applications per examiner. The current number of trademark examiners is a pressing issue, as experienced examiners are often promoted into different offices, and new officers receive neither a formal training course nor a manual.

Table 26 Number of Application per Trademark Examiner 2006 2007 2008 2009 2010 No. of Application 1,563 1,764 2,193 1,596 2,417 Trademark Examiners 3 3 3 4 2 Application/Examiner 521 588 731 399 1,209 Source: calculated from NAST data

Chart 15 Lao Trademark Procedures

Trademark owner files application

Formal Examination Owner makes changes No as required

Allocate TM number, Substantive examination of Under examination in issue receipt and capture relation to Decree Article application data 10 and 12

Owner responds to No objection from examiner In order

Yes

In order Yes

Advertised registration in Refusal to register Official Gazette

Source: http://www.wipo.int/ip-development/en/pdf/asean/lao_pdr.pdf

Automation and Information Technology

With the support of WIPO and Japanese Funds-in-Trust, Laos uses the WIPO’s Industrial Property Automation System (IPAS) to access all IP offices for information on trademarks, patents, petty patents and industrial designs for search, examination, granting and publication. The system was developed by the Infrastructure Modernization Division of WIPO as part of the world IP infrastructure.68 However, the problem of the IPAS system is that it does not support the Lao language.69 The DISM also uses search tools from ESPACE(R) ASEANPAT database, Esp@cenet, IPDL, USPTO, PATENTSCOPE® and OHIM. Notwithstanding,

68 World Intellectual Property Organization, http://www.wipo.int/global_ip/en/activities/technicalassistance/ipas.html (accessed on March 16, 2011). 69 Sida Youtrichanthachak, “Digitalization and Dissemination of Intellectual Property (IP) Information and Utilization of Effective Search Tools, http://www.wipo.int/edocs/mdocs/aspac/en/wipo_reg_ip_mnl_10/wipo_reg_ip_mnl_10_ref_u_lao.pdf (accessed on March 15, 2011). 63

existing search tools are insufficient for searching prior art, particularly for trademark examinations.

The DISM’s IT system has developed significantly with assistance from international organizations, especially from WIPO. The DISM is equipped with ten computers, two servers and six scanners. The ratio of computers to servers, equipped with Windows 2003 and 2008, is relatively high.. Still, some of the computers are old, and the number of computers is insufficient for the 15 staff in the division. Specifically, five staff members lack computers at their work stations. Also, the Internet connection is extremely slow. Faster Internet service is available from private service providers, but DISM lacks the budget to subscribe to these services. When conducting a patent search online, it takes at least three hours to access the main webpage. As a result, Internet connection is the key problem leading to delays in the patent and trademark procedures.

Enforcement and Dispute Settlement

The Lao IP Law gives protection rights to IP owners and provides remedies for violations. The first step is an administrative remedy according to Article 115, which is an administrative process that is more efficient than seeking a judicial decision. The owner and violator can negotiate through an economic dispute resolution committee if the administrative remedy fails. If conflict persists, a court proceeding will be used to resolve the dispute, according to Article 117 of the IP Law.

Upon receiving a petition, the DISM will assign an official to collaborate with the Trade Department, Customs Department, Economic Police and other relevant bodies in discussing and dealing with the investigation. Based on the merits of the case in enforcement proceedings, the office will invite the concerned parties to hear the resolution and receive a written justification of the decision. If the parties disagree with the resolution, they may file an appeal with the court. In the past, most cases of trademarks infringement have been settled by DISM or higher authorities such as NAST and the Prime Minister's Office; only one case (cotton) has been resolved by the Economic Conciliation Arbitration under the Ministry of Justice, and no appeals have been filed to date.70

With the regional integration of IP systems and the increasing volume of trade and investment, it is expected that the number of property infringement cases will increase in Laos. To deal with this, several agencies have been given responsibility for the enforcement of IPR. These agencies include NAST, the People’s Court, the Public Prosecutor’s Office, the Customs Office and the Economic Police. Each government agency, however, has distinct responsibilities. NAST formulates enforcement policies and strategies whereas the Economic Police perform IP inspections. Another important agency is the Economic Arbitration Office under the Ministry of Justice, which is responsible for resolving disputes before they are filed in court.71 DISM is the focal point for receiving complaints and communicating them to the responsible authorities for further investigation.

70 IP expert’s opinion. 71 The USAID funded, “An Assessment of the Laos’s Intellectual Property System,” 53-54. 64

Recommendations

1. Laos still requires more assistance from, and experiential exchanges with, other country offices to improve the use of IT in its IP system. The main concerns include modernization of the IP System, and enhanced automation of the administration of trademarks, patents and industrial designs. Investments to ensure adequate administrative infrastructure for DISM, especially in IT solutions including enhanced Internet connectivity and IT equipment and staff, should be made.

2. Numbers of patent and trademark examiners need to be increased along with necessary trainings. A training manual should be created for both patent and trademark examiners.

3. The DISM should compile clear and streamlined office procedures for the administration of all Industrial Property matters in written manuals.

4. Ensure compliance with PCT legislation.

5. An extended training program is required to meet the needs of the various government and non-government stakeholders in the IP system, including substantive legal training for lawyers in the fields of trademarks, patents, utility models, and industrial designs, training in the drafting of IP legislation, and specialized training for examiners, copyright agents, judges and custom agents.

6. Increase public understanding and awareness concerning the benefits of IP protection as a mechanism to promote and encourage socio-economic development in Laos.

IV. MALAYSIA

Overview

Malaysia is a middle-income country with a population of 28.3 million. In 2010, it reported a GDP of USD 416.4 billion, and its per capita GDP, adjusted for purchasing power parity (PPP), was USD 14,700. The three sectors contributing most to GDP were services (49.3%), manufacturing (41.6%) and agriculture (9.1%).

Malaysia has had strong FDI, amounting to USD 77.4 billion in 2010. Inflation has remained low at 1.8%, and the real growth rate was 7.1% in 2010. The export value of Malaysian goods was USD 192.8 billion in 2010, while the import value was USD 149.2 billion, resulting in a positive trade balance.

Exports to Singapore, China and the U.S. accounted for almost 40% of total exports, and the imports from those countries accounted for 36.2% of total imports. Malaysia’s other key trading partners were Japan and Thailand, representing 9.8 and 5.4% of exports, and 12.5 and 6% of imports, respectively. Manufactured goods made up the majority of Malaysia’s total exports, alongside electronic equipment, petroleum, liquefied natural gas, wood, palm oil, rubber, textiles and chemicals. Among key imports were electronics, machinery, petroleum products, plastics, vehicles, iron and steel products.72

Legal Framework

Malaysia is party to the Paris and Berne Conventions, WIPO, PCT, Nice and Vienna Agreements and is party to the TRIPS Agreement by virtue of its membership in the WTO. As in several ASEAN countries, the issue of exclusivity of data submitted by pharmaceutical companies to health authorities as part of clinical trials remains controversial. The risk of drugs being used commercially without the consent of the rights holder, however, appears low since such a practice is prohibited in the TRIPS Agreement.

In 2011 Malaysia intends to accede to the Madrid Protocol and the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure. The treaty will allow the deposition of microorganisms, for the purpose of filing a patent in Malaysia, at an “international depositary authority.” Thus, local applicants will not need to deposit their microorganisms abroad, reducing costs and time involved in storing these biological materials.73

At the national level, Malaysia has a complete set of IP laws in the British tradition. As in other common law jurisdictions, the legislation is supplemented by the general doctrines and principles of common law and the law of equity, such as the tort of passing off and the

72 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/my.html (accessed January 27, 2011). 73 Malaysian Biotechnology Corporation, “Outsourcing of Biotechnology Patent Examination-cum-Training of Patent Examiners,” http://www.biotechcorp.com.my/Pages/IDABudapestTreaty.aspx?AudienceId=1&BreadcrumID=30%7C32 (accessed January 28, 2011). 66

equitable doctrine of confidential information. Legislation in the core areas of IP (patents, copyrights and trademarks) was passed in the 1980s, and additions encompassing areas pertaining to integrated circuits and industrial designs were passed in the late 1990’s.

Malaysia’s patent laws provide a 20-year term of protection for patents and a 10-year term for utility innovations. The owner of a utility innovation may extend the initial 10-year protection for two additional five-year terms, for a total protection period of 20 years, so long as he proves utilization of the protected material. Although there are provisions that allow utility innovation applications to be converted to standard patent applications if so desired by the applicant, the conversion rate has proven to be extremely low. Patentable subject matter in Malaysia is substantially the same as in the EPO.

In 2006 Malaysia joined the PCT and adopted an amendment to the Patents Act 1983. The most important addition to the act was section 35B, which states that “any applicant who files an application, other than an international application… with the Patent Registration Office may request that an international search be carried out on such application by the International Searching Authority.” This means that local applicants can ask for an International Search via the Patent Registration Office.74

Additionally, there have been several amendments of regulations intended to decrease patent pendency time and expedite the examination procedure.

 Reg. 27(1) – Request for substantive examination within 18 months of the filing date  Reg. 27C(4) – Observation/amendment by the applicant within two months of the date of mailing the substantive examination report  Reg. 10(2) – Statement justifying the applicant’s right to apply shall be a formal requirement under preliminary examination.75

Trademarks, both registered and unregistered, are protected under the Trademark Act 1976 as amended by Act A1138 of 2011, which provides a framework for trademark protection and enforcement. Trademarks are also protected through the Trade Descriptions Act 2011 when violations are related to the marks.76

Intellectual Property Office

The IP office reports to the Ministry of Domestic Trade, Co-operatives and Consumerism. It was created as a corporation with full financial autonomy in March of 2003 under the name “Intellectual Property Corporation of Malaysia” (IPCM). In 2005 the acronym was changed to MyIPO.

MyIPO is run by the Director General who reports to members of the MyIPO Board. This board consists of nine persons including executive branch government representatives,

74 Malaysian Intellectual Property Organization, “Law of Malaysia, Act A1264 Patents (Amendment) Act 2006,” http://www.myipo.gov.my/acts/Patent_A1264_2006.pdf (accessed January 28, 2011). 75 Ibid. 76 Humphreys & Co., "WTR Weekly Trademark Update," September 9, 2010, http://www.humphreys.co.uk/articles/trade_marks_1563.htm (accessed on February 20, 2011) 67

academics, IP experts, a chairman and the director general. All members are appointed by the Ministry of Domestic Trade. The corporation comprises eight divisions and a Centre.

 Patent Division  Management Services Division  Trade Mark Division  Corporation Secretary  Industrial Design Division  Copyright and Layout Design of  Geographical Indications Integrated Circuit Division Division  Intellectual Property Training Centre  Planning and International  MyIPO Southern Office (Johor Relation Division Bahru)  Information Technology  MyIPO Northern Office (Penang) Division  MyIPO East Coast Office (Kuantan)  Legal Advisory Unit  Sarawak Branch  Public Relation Unit  Sabah Branch  Internal Audit Unit

Chart 16 Structure of Intellectual Property Corporation of Malaysia

Minister of Domestic Trade, Co-operatives and Consumerism

Member of the Corporation

Corporation Secretary ------Internal Audit Unit Director General

Deputy Director General Deputy Director General (Industrial Property) (Corporate)

Patent Division Planning and International Management Services Formality Section Relations Division Division Examination Section Finance Section (Engineering) Administration and Examination Section Information Human Resource Section (Applied Science) Technology Division Copyright and Layout Trademark Division Legal Advisory Unit Design of integrated Formality Section Search and Examination Circuit Division Section Sabah Branch Appeal Section Intellectual Property Opposition Section Training Center Sarawak Branch Industrial Design Division Johor Branch Public Relation Unit

Geographical Pahang Branch Indications Division

Source: Intellectual Property Corporation of Malaysia (MyIPO)

Table 27 Number of Staff by Type Number Type of personnel 2004** 2006 2007 2008 2009 2010 Management and Professional 93 113 122 122 123 225 position (a) Supporting agents (b) 179 179 179 180 180 193 Total (a) + (b) 272 292 292 302 303 418 Trademark examiners* 18 18 18 18 18 Patent examiners 42 62** 62 62 70 79 IT staff 25 25 26 26 27 Legal officers 1 1 3 3 3 Others 152 152 159 160 208 Source: MyIPO * Note: For examiners in Search & Examination section only. ** Note: Preliminary assistant examiners are excluded from trademark and patent examiners.

Table 28 Revenue and Expenditure of MyIPO (RM) 2006 2007 2008 2009 2010 Total Revenue 34,949,130 38,093,730 45,422,615 40,123,610 42,070,202 From central government 2,040,660 810,000 4,500,000 1,200,000 1,110,000 From patent registration fee 9,841,205 9,834,858 11,010,855 10,766,391 12,115,549 From trademark registration 18,545,860 21,790,206 24,930,074 24,023,895 24,350,582 fee Industrial Design 1,627,503 1,845,583 1,933,645 1,889,045 1,869,700 Others 2,893,902 3,813,083 3,048,041 2,244,279 2,624,371 Total Expenditure 34,949,130 38,093,730 45,422,615 40,123,610 42,070,202 Personnel/ Salary 11,714,992 12,203,780 14,922,596 15,076,643 15,672,985 Operating 3,494,593 13,656,467 2,441,030 2,006,350 3,264,969 Investment - - - - - Supporting 10,819,845 11,639,200 12,382,213 16,229,612 22,630,429 IT 1,842,750 2,230,719 4,174,787 3,159,503 1,872,548 Public awareness 817,511 891,883 1,317,165 958,265 494,238 Source: MyIPO

Table 29 Number of Patent Examiners by Educational Profile Degree Bachelor Master Doctoral Office High school/ Non- Non- Non- Science Science Science Diploma science science science Patent - 69 - 5 5* - - examiners Trademark 16 - 7 - - - - examiners Source: MyIPO Note: * Master Degree in Intellectual Property

Table 30 Number of Examiners by Years of Experience

Less than 5 More than Office 5-10 years 10-15 years 15-20 years years 20 years

Patent examiners 31 32 4 12 -

Trademark examiners 5 17 - 1 - Source: MyIPO

IP registration fees constitute the major source of MyIPO’s funding. The office sends 30% of its revenues back to the government. (Table 28)

With 79 patent examiners, of whom five graduated with a Master’s in Intellectual Property, and with more than 60% of those examiners possessing five years of experience or more, MyIPO needs not employ outsourced patent examiners. Most trademark examiners have extensive experience: 17 have 5-10 years of experience and one examiner has 15-20 years. In early 2011, MyIPO recruited 16 additional patent examiners and 5 additional trademark examiners.

A patent examiner’s starting salary is about RM 2,685, whereas a highly experienced examiner receives RM 9,796. Trademark examiners receive slightly less at RM 2,443 for a starting position and RM 9,675 with more experience. These figures are reportedly reasonable and competitive (well above the public sector, though slightly below private salaries). MyIPO’s corporatization enabled the office to raise its salaries, boosting the staff in terms of both quality and quantity.

International assistance also played a role in promoting MyIPO’s capability and efficiency. Some of the training and cooperation MyIPO received include:

 Search and examination trainings from EPO, JPO & KIPO  Classification Training from WIPO  Free subscriptions to EPOQUENet (1 year) and GPI (2 years) from EPO 70

MyIPO also works on the applicant side by providing training for patent and trademark agents. The training costs approximately RM 3,400 per person, and includes coursework and exam training (RM 2,000), four paper examinations (RM 700), and a counter-filing fee of RM 700 (a discounted e-filing payment option is also available for RM 650). If the trainee passes the examination and wishes to become a registered patent agent, he/she must pay an additional fee of RM 2,670 to MyIPO.

The fee is considered reasonable, given that patent agents typically charge their clients at least USD 2,000 for a patent application, while only USD 300 of that sum is paid as a fee to MyIPO. Most candidates take the one-week course approximately one month before the examination, which is administered only one time each year. Financial support is available to interested parties in certain cases, and drafting classes for local inventors are also offered.

Patent Applications

Table 31 Application and Granted Patents and Utility Innovations (2001 - 2010)

Patent Applications in Malaysia

Application Granted Year Malaysia Foreign Total Malaysia Foreign Total

2001 271 5,663 5,934 18 1,452 1,470

2002 322 4,615 4,937 32 1,460 1,492

2003 376 4,686 5,062 31 1,547 1,578

2004 522 4,920 5,442 24 2,323 2,347

2005 522 5,764 6,286 37 2,471 2,508

2006 531 4,269 4,800 187 6,562 6,749

2007 670 1,702 2,372 338 6,645 6,983

2008 864 4,539 5,403 198 2,044 2,242

2009 1,234 4,503 5,737 270 3,198 3,468

2010 1,233 5,230 6,463 204 1,973 2,177

Total 6,545 45,891 52,436 1,339 29,675 31,014 Source: MyIPO77

From 2001 to 2005, domestic patent applications totaled, on average, 7.3% of total applications. By 2010, the proportion had increased to 18.3%, a substantial rise in patenting activity by Malaysians (Table 31). The office has attempted to facilitate a convenient process for local applicants, who reportedly prefer to file their patent applications in person, by

77 Intellectual Property Corporation of Malaysia, http://www.myipo.gov.my/en/resources/statistics/160.html (accessed January 28, 2011). 71

establishing three regional IP branches across the country. Because Malaysia did not join the PCT until 2006, all foreign applications came through the Paris Convention route, although this situation has changed since. As shown in Table 32, the number of PCT applications received (MyIPO as the Receiving Office) has increased steadily. In 2010, PCT applications accounted for approximately 5.17% of the total. The largest sources of foreign applications in 2009 were the United States (32.7%), Malaysia (27.4%), and Japan (16.6%).

The number of granted patents in technical fields corresponds to the industries in which Malaysia is most active, particularly chemistry and metallurgy (Table 33).

Table 32 PCT Applications Received from August 2006 to 2010

PCT Applications

Year 2006 2007 2008 2009 2010 Total

Applications 34 93 200 224 334 885 Source: MyIPO78 Note: MyIPO as the Receiving Office

Table 33 Patents Granted Based on Field of Technology

Field of Technology for Granted Patents

2006 2007 2008 2009 2010

Human Necessities 948 1,179 423 656 352

Performing Ops; Transport 1,155 1,213 421 633 379

Chemistry and Metallurgy 1,275 1,748 451 837 585

Textiles; Paper 101 109 33 53 22

Fixed Constructions 197 221 98 119 75

Mechanical Engineering 448 407 159 185 120

Physics 1,042 883 293 488 269

Electricity 1,583 1,223 364 497 320

Total 6,749 6,983 2,242 3,468 2,122 Source: MyIPO79

78 Ibid. 79 Ibid. 72

Chart 17 Top Five Countries for Patent and Utility Innovation Applications in 2009

1,500

1,000

500

0 USA Malaysia Japan Germany Switzerland

Source: MyIPO80

Patent Procedures

There are five stages for patent application and registration in the national phase. The first is to submit a patent application with the Patent Registration Office in the English language or in Bahasa Malaysian. Foreign applications must be filed through a registered local patent agent. Malaysia, like many other countries, uses a “first-to file” system.

Preliminary examination constitutes the second stage. A patent application will be examined to see whether or not it meets the formal requirements. Then, it will be passed on to a public inspection stage 18 months after the filing date. The patent application will not be published in this stage, but it will be made available to anyone who demands an inspection (a prescribed fee applies) online or using the MyIPO Public Search Room.

The next stage is a formal request for substantive examination. An applicant must request for the examination within 18 months of the filing date. The office recently reduced this period, from two years, in order to expedite the registration process. If a patent application is of foreign origin, the Malaysian procedure offers applicants two options. If the patent has already been granted in one of several other offices (Australia, Japan, South Korea, the USA, the UK, or the EPO), the applicant can ask for a full substantive examination, or they may request the performance of a modified substantive examination that does not require a prior art search. If an application is successful, the Patent Office will issue a Certificate of Grant of a Patent and publish this in the Government Gazette. However, there may be various objections to the application during the examination stage, and the applicant should respond to the arguments against granting the patent.81 In order to maximize process efficiency and consistency, MyIPO utilizes a standard language of formed paragraphs in notifying applicants on the status of their claims.

Malaysia’s patent laws permit compulsory licensing. This will be decided on a case-by-case basis by a board of IP experts appointed by the Government.

80 Ibid. 81 Henry Goh & Co. Sdn. Bhd, Q&A Patents, Trademarks, Industrial Designs and Copyright, p.9 , January 2011., http://www.henrygoh.com.my/downloads/qanda-my-en.pdf (accessed on April 22, 2011) 73

In theory, the average time to register a patent is 26 months via the PCT route, and up to 38 months for Paris Convention applications. For those applying on a fast track basis where there is a clear-cut case without objections, the process could close in as few as 20 months. In practice, using the number of patents granted in 2009, it takes an average 5.41 years to complete the process, perhaps due to the fact that most applications were submitted via the Paris Convention route. Also, if we disregard five patents that took between 8 and 15 years from application to granting, the average time required for the remaining applications is approximately 4 years.

Table 34 Number of Applications per Patent Examiner 2006 2007 2008 2009 2010 No. of Application 4,800 2,372 5,403 5,737 6,463 Patent Examiners 62 62 62 70 79 Application/Examiner 77 38 87 82 82 Source: Calculated using MyIPO data

The inadequacy of existing search tools is the most important problem leading to delays during the patent procedure, followed by incomplete or poorly prepared applications. Despite MyIPO’s vigorous training, poor drafting of patent specifications and applications with patentability problems are two of the most common reasons that patent applications fail to be registered.

Focusing on the ratio of applications per patent examiner, for the period 2008-2010, on average, each patent examiner handled 84 applications per year. The ratio is considered to be acceptable as those examiners have extensive experience and receive trainings periodically. Nonetheless, the examination process is unnecessarily long; an office action is typically issued 15-20 months from the date of the request for examination, and re-examination after a response to an office action can take 10-15 months from receipt of the response. These extended waiting periods can dishearten applicants, who may ultimately abandon their applications mid-review. In order to alleviate these issues it is imperative that the office continually revamp examiner-trainings to ensure they are relevant and specific to current business needs.

Chart 18 Patent Registration Procedure in Malaysia Filing of Application

Application Accorded Filing Date

Response filed (Compliance)

Preliminary Application Preliminary Examination Examnination Refuse Adverse Report

Compliance

Application Laid-Open for Public Inspection

Request not filed Application Deemed Request for Substantive Withdrawn Examination

Request filed

Substantive Examination Application Substantive Examination Adverse Report Refuse

Compliance

Registration (Certificate of Grant Issued)

Advertisement in Goverment Gazette

Source: Malaysian Biotechnology Corporation82

Trademark Applications

From 2000 - 2010, the proportion of domestic applications, in line with Malaysian economic growth, had gradually risen from about one-third of the total applications to roughly one-half, rising an average of 7.6% per year over the ten-year period.83 While foreign registrations accounted for 60% of the total registrations in 2010, the number of domestic registrations also increased over time, from about 25% in 2000 to 40% in 2010. However, the registration numbers for both domestic and foreign applications dropped substantially in 2009 and

82 Malaysian Biotechnology Corporation Sdn Bhd., Intellectual Property Rights, http://www.biotechcorp.com.my/Pages/IntellectualProperty.aspx?AudienceId=3 (accessed January 28, 2011). 83 Cumulative annual growth rate 75

2010.84 During this 10-year period, total applications grew at an average of 3.4% per year, while registrations grew at an average of 23.2% per year. The significant growth in registration numbers may imply higher efficiency of MyIPO. The three main countries submitting foreign applications in 2010 were the USA (51%), Japan (30%) and China (19%). The three main countries granted foreign registrations in 2010 were the USA (51%), Japan (29%) and Germany (20%). (Table 35)

Table 35 Trademark Application and Registration in Malaysia

Applications Registrations Year Domestic Foreign Total Domestic Foreign Total 2000 6,303 12,500 18,803 449 1,328 1,777

2001 6,525 10,078 16,603 1,570 5,341 6,911

2002 7,661 8,785 16,446 4,056 7,072 11,128

2003 8,327 9,439 17,766 3,014 9,108 12,122

2004 10,406 10,337 20,743 3,243 8,473 11,716

2005 10,479 11,668 22,147 3,683 7,771 11,454

2006 11,209 12,840 24,049 5,651 10,108 15,759

2007 12,289 13,605 25,894 8,108 17,382 25,490

2008 12,562 13,472 26,034 9,049 18,798 27,847

2009 12,810 11,260 24,070 5,438 9,534 14,972

2010 13,009 13,260 26,366 5,797 8,548 14,345

Total 189,085 226,366 577,873 64,095 149,834 346,202 Source: MyIPO

Trademark Procedures

The Malaysia Trade Marks (Amendment) Regulation 2011 became effective on February 15, 2011. The amendment brought increases in several fees, including 30-60% higher trademark application fees, ex-parte hearing fees, and ‘subsequent mark in a series’ fees. Overall, trademark filing expenses include a RM 370 application fee (e-filing: RM 330), and a RM 650 fee for advertisement and issuance of the certificate (e-filing: RM 600).

In addition, because of the amendment, applicants can now formally request expedition of examination provided the request is filed within four months of the application filing date and an additional fee is paid. The grounds on which such requests will be considered are: 1) National or public interest; 2) Evidence of potential infringement or ongoing infringement proceedings; 3) Registration is a condition to obtaining monetary benefits from the

84 MyIPO illustration stated that the registration dropped in 2009 due to lower response for gazette. 29, 256 were ready for gazette, but less than 50% responded. 76

government or institutions recognized by the registrar; and 4) Other reasonable grounds. The regulation changes will only affect applications filed on or after February 15, 2011.85

Using this special procedure, the office can issue the certificate of registration six months and three weeks after the filing date.

In theory, assuming no oppositions arise, the normal registration process should take 12-18 months. Using 2009 data, it takes approximately 2.7 years to register a trademark. With only 18 trademark examiners over the past five years (2006-2010), MyIPO’s major problem is an insufficient number of examiners, which has led to delays in the trademark procedure. As the number of applications has increased over time, so too has the number of applications per examiner. In 2006, one trademark examiner was responsible for 1,336 applications; in 2010 this number totaled 1,465, an increase of 10%.

Some applicants requested that clearer directions and explanations on objection from the IP office would help to speed up the application process.

Regardless, it is important to note that a considerable part of any delay results from the applicant’s side (e.g. incomplete or poorly prepared applications). Most trademark applicants do not use agents, and usually fail to conduct a prior search, despite the examiners’ recommendation. The most common reason that trademark applications fail to be registered is that they do not conform to the requirements of registration, as required under the law.

To effectively address these issues, the office should ensure that examiners are properly trained on their specific functions and fully aware of office standards and policies, and that applicants are provided detailed instructions and clear process timelines.

As of December 2011, the pendency period for trademark registration was 12 months from the date of application (for clear cut cases) in line with MyIPO’s intention to shorten the pendency period by amending the Trademark (Amendment) Regulations 2011 (effective from 15 February 2011).86 MyIPO also increased the number of trademark examiners in the Search & Examination section in 2011 in order to speed up the process of trademark registration.

Table 36 Number of Applications per Trademark Examiner 2006 2007 2008 2009 2010 No. of Application 24,049 25,894 26,034 24,070 26,366 Trademark Examiners 18 18 18 18 18 Application/Examiner 1,336 1,439 1,446 1,337 1,465 Source: Calculated using MyIPO data

Chart 19 Malaysia Trademark Application Procedure

85 Henry Goh & Co Sdn Bhd, http://www.henrygoh.com/downloads/tm-regulations.pdf (accessed on March 7, 2011) 86 Intellectual Property Corporation of Malaysia, http://www.myipo.gov.my/images/pressrelease/pendency.pdf (accessed on January 9, 2012) 77

Source: MyIPO

Automation and Information Technology

The MyIPO now provides online services in many areas, such as online search, filing and application status enquiry. This online filing system, however, was only established in February of this year, and various issues are still being addressed. These platform glitches include incomplete records, deactivated actions (renewal and PCT applications), and incorrect fee schedules. With time and incremental improvements, the system should prove beneficial.

Any applicant can easily conduct a search. An online quick search can be accessed without charge at https://iponline.myipo.gov.my/ipo/main/search.cfm; however, the applicant must 78

register as a member to conduct advanced searches, which entail service fees. The applicant can search patent and trademark information by filling out search criteria, and can also search other IP offices including Australia, China, Japan, Korea, UK, USA, EU and WIPO. In addition, applicants can file an application online using documents in digital format.

Other international search tools employed by MyIPO include Esp@cenet, IPDL, USPTO, PATENTSCOPE®, E-search and MyISS; the latter two make up the internal database. MyIPO has also received a one-year free trial of the search system called EPOQUENet and GPI from EPO. During that period, MyIPO will be equipped with ten lines for GPI and five lines for EPOQUENet.

For trademarks, the existing problem is incomplete information of old trademark applications. Domestic trademark applications from 1930-1997 are not fully digitized, and electronic copies of these data cannot always be read. MyIPO’s Trademark division suggested that a central database of all trademark precedents would further benefit trademark examiners. Consequently, MyIPO is currently developing a comprehensive system for trademark information called “Integrated Trademark System,” or ITMS. It is an in-house system adapted from the EPO format. The system is expected to be completed in 2012, and is intended to decrease the trademark registration time to only nine months.

MyIPO’s annual IT budget during 2006-2010 was RM 2.7 million, on average. The office is equipped with modern technology and equipment, including 450 computers, 70 servers, 200 printers, and 115 scanners. The majority of its computers are equipped with Intel Core i3 or i5 processors. The internet speed at headquarters is 10 Mbps and the speed at branches is 2 Mbps. The specification of IT infrastructure of MyIPO is very high.

Still, the inadequacy of available search tools is a crucial problem for both the patent and trademark divisions. Moreover, representations of some old trademarks in the database are of poor quality. Some representations are not easily categorized using the Vienna Codification, leading to inaccuracy and inconsistency during search and examination procedures.

Enforcement and Dispute Settlement

In general, IPR owners in Malaysia have various methods to enforce their rights. These include civil action, criminal action, and administrative action. Civil action and criminal action can be taken in trademark infringement cases. Patent infringements, however, are not considered criminal, but civil crimes. Apart from judicial measures, it is possible to take administrative measures in certain cases.

According to the Patent Act 1983 of Malaysia, the patentee has the right to institute Court proceedings against any person who has infringed or is infringing the patent. The offender can be sentenced to a fine of up to RM 15,000. The responsibility of enforcement falls primarily on the Enforcement Division of the Ministry of Domestic Trade, Cooperative and Consumerism (MDTCC). The Enforcement Division detects, deters and detains counterfeiters according to complaints filed by IPR owners. The Customs Department further serves an enforcement role.

IP disputes can be settled by other forms of conflict resolution. Malaysia has established the Regional Arbitration Centre for alternative dispute resolution methods, such as arbitration and mediation. While such methods are easier and far less expensive than court hearings, they are often still unpopular as both parties must agree voluntarily to use them, and they do not entail the power to enforce rulings.87

Recommendations

1. In order to expedite the registration procedure, MyIPO should increase the number of staff at all levels, and provide several trainings on search and examination in new technologies such as computer related inventions, biotechnology and nanotechnology. Simultaneously, MyIPO should cooperate with the private sector to continually update knowledge in emerging industries.

2. Trainings of Trainers are needed for senior examiners so that they can provide junior examiners with basic knowledge, and be less dependent on assistance from international organizations. Standardized materials and manuals, aligning with USPTO or EPO, should be provided.

87 P. Kandiah, “IP Enforcement in Malaysia,” http://www.21coe-win-cls.org/english/activity/pdf/2/90-94.pdf (accessed April 22, 2011). 80

V. MYANMAR

Overview

As of 2010, Myanmar had a population of 53.4 million people with a per capita GDP of USD 1,100 when adjusted for purchasing power parity. Real GDP growth in 2010 was reported at 3.1%. The composition of GDP by economic sector in 2010 reflects Myanmar’s significant dependence on agriculture (43.2%) and relatively minor involvement in industry and manufacturing (20%). Services accounted for 36.8% of the total economy.88

The government changed the official English name of the country from "the Union of Burma" to "the Union of Myanmar" in 1989; however, the name Burma is still widely used.

Exports amounted to USD 7.84 billion in 2010, whereas imports were about USD 4.53 billion. Myanmar’s main export markets were Thailand (46.6%), India (13%) and China (5.7%). Major import sources were China (33.1%), Thailand (26.3%) and Singapore (15.2%). Key exports were natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems. Main imports were fabric, petroleum products, fertilizer, plastics, machinery, transport equipment, cement, construction materials, crude oil and food products. US economic sanctions prohibit the import of goods of Burmese-origin into the United States. While US exports to Myanmar (other than financial services) are permitted, very little trade flows in this direction.

Legal Framework

Myanmar, although a member of neither the Paris Convention nor the Madrid Agreement, has been a member of the WTO since 1995 and is thus party to the TRIPS Agreement. Myanmar also joined WIPO in 2001, but has struggled to draft and implement legislation compliant with the TRIPS Agreement.

The original Myanmar Patents and Designs Act was enacted in 1939, and six years later was replaced with the Myanmar Patents and Designs Act of 1945. As that Act was later revoked, there is no current legislation specifically pertaining to patents and designs.89 Patents and designs are now protected under Section 54 of the Specific Relief Act (1877) and the Registration Act (1908).90

As with patents and designs, there are no detailed laws dealing with trademarks. The Penal Code 1861, Section 478 provides only two lines defining a trademark, saying that ‘a mark used for denoting that goods are the manufacture or merchandise of a particular person is called a trademark.91 In this interim period, trademarks may be registered under section 18(f)

88 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html, (accessed on March 30, 2011). 89 U Tin Ko Win, “Legal Status of Intellectual Property Rights in Myanmar,” http://www.unescap.org/tid/mtg/ip_myan.pdf (accessed on March 30, 2011). 90 Myanmar Trademark and Patent Law Firm, http://www.myanmarpatent.com/patent.htm (accessed on March 30, 2011). 91 U Tin Ko Win, “Legal Status of Intellectual Property Rights in Myanmar,” http://www.unescap.org/tid/mtg/ip_myan.pdf (accessed on March 30, 2011). 81

of the Registration Act by means of declaration, which is a solemn statement of facts made by the trademark owner.

A new IP law is being drafted by The Office of the Attorney General (OAG) in compliance with the TRIPS Agreement, with completion scheduled for 2013.92

Intellectual Property Office

There is no IP office in Myanmar. The Myanmar Scientific and Technological Research Department (MSTRD) in the Ministry of Science and Technology (MOST) is the main government agency responsible for IP management. Within the MSTRD is the IP Section, which employs 20. (Table 37) The support staff in the IP Section is responsible for coordination of IP matters, particularly for patents and designs among separate domestic agencies, and among ASEAN and international offices. Meanwhile, the Ministry of Commerce is responsible for the coordination of trademarks.

Trademarks and patents can be registered with the Myanmar Registry Office of Deeds and Assurances, which is under the Ministry of Agriculture and Irrigation. There is no application examination, and thus, no patent or trademark examiners.

Table 37 Number of staffs in the IP section Number Type of personnel 2006 2007 2008 2009 2010

Administrators 2 3 3 3 4

IT staff 2 2 3 4 4

Legal officers - - 1 1 -

Supporting staff 5 6 7 9 10

Others 2 2 2 3 2

Total 12 14 16 20 20

Source: Ministry of Science and Technology

Myanmar has received some international assistance on IP. In 2005, WIPO sponsored a Patent Information and Patent Searching Training Course in Myanmar. There were also technical collaborations with other foreign agencies, such as JICA and KOICA.

92 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/ASEAN_IP_Legislations_Myanmar (accessed on March 30, 2011). 82

Trademark Applications

Table 38 Statistics on Application and Registration of Trademarks (2005 - 2010) Year Application Granted Domestic Foreign Total Domestic Foreign Total

2005 2,446 1,330 3,776 2,446 1,330 3,776 2006 2,637 1,518 4,155 2,637 1,518 4,155 2007 1,747 906 2,653 1,747 906 2,653 2008 2,857 1,796 4,653 2,857 1,796 4,653 2009 3,961 1,931 5,892 3,961 1,931 5,892 2010 3,821 2,149 5,970 3,821 2,149 5,970 Total 17,469 9,630 27,099 17,469 9,630 27,099 Source: The Ministry of Agriculture and Irrigation

The number of trademark applications in Myanmar grew at about 10% from 2005-2010. A majority of the applications were domestic; on average domestic applications accounted for 64.46% of the total, and all applications were granted trademark registration.

Procedure

As there are no specific laws regarding the subject matter, patents and trademarks can be registered as stated in Section 18(f) of the Registration Act 13 (1908). However, no patent registration system is in place.

The first step in the trademark registration procedure requires an applicant to issue a formal statement called a “Declaration of Ownership” to the Office of the Registrar of Deeds and Assurances. After that, an application for registration must be filed within four months from the date of the Declaration. There is no formality examination, opposition, nor publication of a Gazette/ Journal/ Booklet, apart from checking that applications conform to the Registration Act. Once the registration is completed, it is optional but recommended that the owner publishes a Cautionary Notice in a local newspaper to establish ownership of the trademark and ward off potential infringers.93 The registration process takes approximately 4-6 weeks from the filing date to complete. It is advisable that the trademark owner publish a notice of trademark ownership in the local newspaper every two years since an official patent and trademark search system does not exist, and any searches must be done by examining newspapers.

93 Myanmar (Burma) Trademarks and Service Marks, http://www.tillekeandgibbins.com/publications/Articles/ip_registration/tm_myanmar.htm (accessed on May 18, 2011). 83

It should be noted that the protection period of patents and trademarks is not mentioned in the law; however, trademarks can be renewed by re-registration or republication three years after the first filing.94

A trademark can be registered even if it is not used. In general, the trademark procedure only takes one month or less, as it does not entail an examination stage.95

The common reasons that trademark applications fail to be registered are unqualified marks and applicants who exceed the four-month period for filing for registration after the Declaration.

Automation and Information Technology

No patent and trademark search system is available for the public in Myanmar. Consequently, applicants need to search through newspapers, the Internet or law firms’ databases. There is, however, a central database that is used for trademark searches and for procedural administration. All trademark application documents are kept in both hard and soft copy.

There are eight computers with two servers in the IP section office. The majority of computers have Intel Pentium 4 processors at 2.8 GHz. The network capacity of the office is poor; the office Internet speed is only 256 Kbps.

In preparation for the establishment of an official IP office, there is an urgent need for the Myanmar government to improve its basic IT infrastructure; for example, it should add more workstations and develop a functional network with high-speed Internet.

Enforcement

To date, IP rights in Myanmar are protected under application of general laws including the Penal Code and some civil laws like the rights of the trademark owner. Existing laws that can be used to enforce IPR include the following;  The Myanmar Copyright Act (1914)  The Myanmar Merchandise Marks Act (1889)  The Registration Act (1908)  The Television and Video Law (1996)  The Computer Science Development Law (1996)  National Drug Law (1996)  Traditional Drug Law (1996)  Motion Picture Law (1996)  The Electronic Transactions Law (2004)

The Ministry of Science and Technology is a focal point for most IP matters. The Attorney General’s Office, the Ministry of Science and Technology and other related ministries work

94 Myanmar Trademark and Patent Law Firm, http://www.myanmarpatent.com/trademark.htm#trademark search (accessed on March 30, 2011). 95 Expert opinion. 84

together to enforce IPR issues. Any disputes related to trademarks are adjudicated by relevant Court and Registration Offices in conformity with the decree on Courts.

Recommendations

1. Myanmar needs new legislation on patents and trademarks in order to build its IP system to international standards. It needs to align with international IP conventions and treaties such as the TRIPS Agreement, and organize a specialized IP office dedicated to IPR. These actions would dramatically improve not only the efficiency of the IP office, but also the procedures for the registration and enforcement of IPR in Myanmar.

2. Myanmar is the only country in ASEAN that is largely non-compliant with TRIPS provisions. The registration of patents and trademarks in Myanmar does not meet the international standard, which would require new legislation on patent and trademark law.

3. Myanmar needs to develop an information technology infrastructure and system to effectively handle IP applications.

4. An extended training program is needed to meet the needs of various IP professionals, including substantive legal training for lawyers in the fields of trademarks, patents, utility models, and industrial designs, as well as training in the drafting of IP legislation and specialized training for examiners, IP agents, judges and customs agents.

5. Myanmar needs to pass a specific trademark law and more stringently enforce IP rights. The current principles of common law in place are not sufficient to deal with the main problems of trademark registration and protection.

VI. THE PHILIPPINES

Overview

In 2010, the Philippines GDP was USD 353.2 billion and real growth was measured at 7.3%, rising rapidly from 1.1% in 2009. Per capita GDP, adjusted for purchasing power parity, was approximately USD 3,500. The sectors that contributed most to the Philippines economy were services (54.8%), industry (31.3%) and agriculture (13.9%). The overall trade balance of the Philippines was slightly negative in 2010, with exports of USD 50.72 billion and imports of USD 59.9 billion.

Key sources of imports were Japan (12.5%), the United States (12%), China (8.8%), Singapore (8.7%) and South Korea (7.9%). The two most important export markets for the Philippines were the United States and Japan, accounting for 18% and 17% of all Philippine exports, respectively. The next largest recipients of Filipino exports were the Netherlands (9.8%), Hong Kong (8.6%) and China (7.7%).

Legal Framework

The Philippines is a signatory to most of the world’s major IP treaties, including the Paris and Berne Conventions, the Rome Convention, the Budapest Treaty, WIPO Convention, PCT, WCT and WPPT. It is also a WTO member, and thereby party to the TRIPS Agreement.

At the national level, Filipino legislation on IP is comprehensive. The fundamental IP laws are found in the Republic Act No. 8293, The Intellectual Property Code of the Philippines (January 1998). A corresponding set of rules and regulations dealing with inventions, trademarks, industrial designs, and utility models was enacted in December 1998. Four other Republic Acts of significant importance since 2001 were the Electronic Commerce Act (June 2000), the Act on the Protection of Layout Designs of Integrated Circuits (August 2001), the Act on the Protection of Plant Varieties (June 2002), and the Act on Optical Media.

Rules and regulations on trademarks, service marks, trade names and marked or stamped containers were amended by Office Order No. 17 (1998), Office Order No. 08 (2000), Office Order No. 20 (2001), Office Order No. 40 (2002), Office Order No. 39 (2002) and Office Order No. 49 (2006).96

In 2008, the Intellectual Property Code was amended by the Republic Act No. 9502 to expand the definition of patentable and non-patentable inventions to cover drugs and medicines. This amendment led to greater access to foreign medicines at economical prices,97 but sparked concerns in the private sector that it would adversely impact the patentability of pharmaceutical products and processes, limit IP rights for pharmaceutical innovators and violate the TRIPS agreement. The core change was in Section 22 of the IP Code as follows:

96 The Intellectual Property Office of the Philippines, http://www.ipophil.gov.ph/main2.php?contentid=14 (accessed March 29, 2011). 97 Ignacio Sapalo, “Philippines: Changing the Law to Reduce Cost of Medicines,” September 1, 2008, http://www.managingip.com/Article/1999472/Philippines-Changing-the-law-to-reduce-cost-of-medicines.html (accessed March 22, 2011). 86

“The following shall be excluded from patent protection: Discoveries, scientific theories and mathematical methods, and in the case of drugs and medicines, the mere discovery of a new form or new property of a known substance which does not result in the enhancement of the known efficacy of that substance, or the mere discovery of any new property or new use for a known substance, or the mere use of a known process unless such known process results in a new product that employs at least one new reactant.

For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of a known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

Some IP practitioners have questioned whether this clause meets the requirement of Article 27 on Patentable Subject Matter of TRIPS, which states: “…patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application ...” The IPOPHL, however, maintains that the law is fully compliant with the country’s TRIPS obligations.

As of 2011, the Republic Act No. 9502, specifically the Implementing Rules and Regulations (IRR), was in the process of being further revised on the matters of dispute settlement practices.98

The Intellectual Property Office

The Intellectual Property Office of the Philippines (IPOPHL) was created by Republic Act No. 8293 in January 1998. It replaced the Bureau of Patents, Trademarks, and Technology Transfer (BPTT) created in 1967.

The year 1998 marked the beginning of the IPOPHL as an autonomous organization. It received a government subsidy, which was progressively reduced, until 2005. Since 2006 IPOPHL has been a self-sustaining organization with its own management and financial structure.

IPOPHL’s autonomous status enabled the office to pursue several efficiency measures under its application backlog reduction policy; these centered around flexible management and included hiring new examiners trained in important emerging technology fields (e.g. nanotechnology and biotechnology) and carefully allocating and managing examiner workloads.

IPOPHL has six bureaus as follows:

 The Bureau of Patents  The Bureau of Trademarks

98 Asian Patent Attorneys Association 58th Council Meeting, http://www.apaa2010.kr/meeting/down/Patents_Committee_PDF/COUNTRY_REPORTS_Patents_2010.pdf (accessed March 22, 2011). 87

 The Bureau of Legal Affairs  The Documentation, Information and Technology Transfer Bureau  The Management Information Services and Electronic Data Processing Bureau  The Administrative, Financial and Human Resource Development Service Bureau

IPOPHL also established IP Satellite Offices (IPSO) – branch offices - in eight cities including Cebu, Davao, Legaspi, Angeles, Baguio, Lloilo, Cagayan de Oro and General Santos to provide IP services across the country.99

Essential to its 2011 Strategic Roadmap, the IPOPHL has begun working toward its 2020 Vision of becoming a 3D IP office, highlighted by a system that is demystified, development- oriented and democratized. Unique, strategic examples of each of these three organizational pillars, respectively, include: “engaging online social networks to promote the use of the IP system and services of IPOPHL,” “supporting local IP’s through business development and commercialization assistance programs,” and by “developing a market-oriented balanced scorecard for IPOPHL through effective institutional planning, performance monitoring and benchmarking.”100

The IPOPHL staff comprised approximately 248 people in 2010, most of whom were patent examiners in the Bureau of Patents and administrative personnel. In 2011, 15 new staff will be trained to become patent examiners. There were 52 patent examiners and 29 trademark examiners, a slight decrease from 2006. The total number of staff also has declined since 2006.

99 The Intellectual Property Office of the Philippines, Annual Report 2008-2009, 1-5. 100 The Intellectual Property Office of the Philippines, http://www.ipophil.gov.ph/whatsnewfile/02bd3c8b_IPOPHL%20Roadmap%202011%5B1%5D.pdf (accessed June 22, 2011) 88

Chart 20 Structure of the Intellectual Property Office of the Philippines

IPOP

Operation, IP Policies & Management & Support International Relations Services

Management Bureau of Bureau of Information Service Trademarks Legal Affairs

Bureau of Documentation, Financial, Patents Information & Management & Technology Transfer Administrative Service Bureau

Source: Intellectual Property Office of the Philippines101

Table 39 Number of IPOPHL staff Number of staff Type of personnel 2006 2007 2008 2009 2010 Bureau of Trademarks 43 43 40 35 36 - Trademark examiners (excluding preliminary 34 34 32 28 28 assistant examiners) Bureau of Patents 70 69 65 61 63 - Patent examiners (excluding preliminary assistant 56 55 53 51 50 examiners) Bureau of Legal Affairs 27 25 25 25 23 Documentation, Information and 25 25 25 23 25 Technology Transfer Bureau Management Information Service 27 27 26 22 23 Financial Management and 68 67 64 60 60 Administrative Service Others 20 18 15 15 18

101The Intellectual Property Office of the Philippines, http://www.ipophil.gov.ph/main.php?contentid=4 (accessed March 3, 2011) 89

Number of staff Type of personnel 2006 2007 2008 2009 2010 Total 280 274 260 241 248 Source: IPOPHL

Table 40 Number of Examiners by Educational Profile Degree

Bachelor Master Doctoral Office High Non- Non- Non- school Science Science Science science science science Patent - 31 2 3 14 - - examiners Trademark - 4 12 - 12 - - examiners

Source: IPOPHL

Almost all of the patent examiners, 48 of 50, in IPOPHL have at least a bachelor’s degree in science; some go on to obtain a master’s degree in business administration (MBA). Trademark examiners mostly have degrees in non-science fields. Some 42.9% have a master’s degree.

Table 41 Number of Examiners by Years of Experience Office Less than 5 5-10 years 10-15 years 15-20 years More than years 20 years Patent - 22 8 3 17 examiners Trademark 2 17 3 4 2 examiners Source: IPOPHL Note: the number of examiners in the table above is slightly inconsistent with the total number of examiners noted previously.

Almost 45% of patent examiners have five to ten years of experience. The rest have more than ten years. Similarly, most trademark examiners have more than five years of experience. Only 7.1% have less than five years.

The salary range of patent and trademark examiners in Philippines is relatively high. The starting salary of both patent and trademark examiners is approximately PHP 20,352, and the highest salary as a chief examiner is PHP 55,587. Based on data from the Bureau of Labor and Employment Statistics of the Philippines, the starting salary of examiners is nearly the same as that of programmers and electronic engineers, which are considered good average salaries at approximately PHP 20,000 per month. This is also fairly competitive for trademark examiners, who usually possess a non-science degree. On the other end of the experience 90

spectrum, the examiner’s highest salary of PHP 55,587 is comparable to that of professionals in the legal and finance sectors who receive an average monthly salary of PHP 55,626.102

The IPOPHL has successfully employed outside experts to help the office identify its key stakeholders and to facilitate a series of workshops geared toward restructuring office processes and procedures in order to most effectively serve the needs of its various clients. The office reported that these engagements have been extremely productive in streamlining and improving IPOPHL’s services.

Patent Applications

The number of domestic patent applications decreased slightly from 2000 to 2010. The cumulative annual growth rate of the total applications in this period was -0.7%. The beginning of the period saw a substantial decrease in the number of foreign patent applications in 2001 and 2002. This can be largely attributed to the PCT coming into force in the Philippines. Under the Paris Convention, applications had to be filed abroad in other Convention member countries no later than 12 months from the first filing date. Under the PCT, however, entry into the national phase takes place 31 months after the filing date. This led to a substantial rise in the number of PCT applications by 2004. (Table 42)

The number of invention patent applications increased steadily during the period 2003 to 2010. Foreign applications, accounting for 93.7% of the total applications in the past ten years, outnumbered domestic applications every year. While the percentage of domestic patent applications has been constantly low, domestic utility model (petty patent) applications consistently represent 90% or more of the total utility model applications per year.

During this ten-year period, granted foreign patents accounted for most of the granted patents at 98.3%. In 2008, the number of granted inventions dropped drastically, possibly due to the amendments of the Republic Act No. 9502, which may have had an impact on patent approval decisions. The effect of the amendments was also apparent in the 9.5% drop in the number of application in 2009. The situation changed considerably on the granting side; the number of granted inventions doubled from 838 inventions in 2008 to 1,679 inventions in 2009. This was due to the change made by the Bureau of Patents on the granting procedure to simultaneously issue the notice of allowance and the certificate of the grant.

Table 42 Applications and Granted Inventions, 2000 - 2010

Applications and Granted Inventions in Philippines Application Granted Year Domestic Foreign Total Domestic Foreign Total 2000 154 3,482 3,636 8 566 574 2001 135 2,470 2,605 7 1,082 1,089 2002 149 769 918 12 1,112 1,124 2003 141 1,801 1,942 13 1,160 1,173 2004 157 2,538 2,695 18 1,434 1,452

102 “What is the Average Salary in the Philippines?” http://www.gopinoy.com/advice/salary-guide/what-is-the- average-salary-in-the-philippines.html (accessed May 25, 2011) 91

2005 210 2,762 2,972 15 1,638 1,653 2006 223 3,038 3,261 24 1,191 1,215 2007 225 3,248 3,473 29 1,785 1,814 2008 216 3,095 3,311 41 797 838 2009 172 2,825 2,997 22 1,657 1,679 2010 167 3,224 3,391 13 1,140 1,153 Total 1,213 18,192 19,405 144 8,208 8,352 Source: IPOPHL103

Table 43 Applications and granted utility models from 2005 to 2010

Applications and Granted Utility Models in Philippines

Application Granted Year Domestic Foreign Total Domestic Foreign Total

2005 519 27 546 296 14 310

2006 519 22 541 282 18 300

2007 395 32 427 715 58 775

2008 512 33 545 405 52 457

2009 496 48 544 405 52 457

2010 579 35 614 326 48 374

Total 3,020 197 3,217 2,429 242 2,673 Source: IPOPHL104

Patent pendency is estimated to have decreased in recent years due to IPOPHL’s backlog reduction policy. The average pendency period fell from 4.9 years in 2008 to 4.7 years in 2009. Similarly, the pendency period of utility model applications dropped from 11.4 months in 2008 to 10.8 months in 2009.105

According to IPOPHL’s definition, any applications submitted more than four years prior to the current date are considered backlogs. In 2010, there were 13,330 pending applications, of which 1,718 were backlogs; the rest were submitted in the year 2007 or later. To ensure a timely patent registration process, IPOPHL hired and trained 15 new patent examiners in 2010 to handle examinations.

103 The Intellectual Property Office of the Philippines, http://www.ipophil.gov.ph/main.php?contentid=49 (accessed March 3, 2011) 104 The Intellectual Property Office of the Philippines, http://www.ipophil.gov.ph/main.php?contentid=49 (accessed March 5, 2011) 105 The Intellectual Property Office of the Philippines, Annual Report 2008-2009, 14. 92

Patent Procedures

Patent applications must be filed through the Receiving Section under the Bureau of Patents of the Intellectual Property Office of the Philippines. IPOPHL uses the “first-to-file” system, and uses an English-language application. After receiving an application, the formality examination, search and classification of the technology of the application will take place. Subsequently, the result will be published in the IPOPHL Gazette 18 months after the filing date. An initiative of its end-to-end office review, and in order to avoid unforeseen delays at the end of this waiting period, IPOPHL now prepares publication materials two months in advance. The applicant must request the substantive examination within six months of the publication date. Utility model applicants are not required to request a substantive examination. If the applicant does not make a request within the time limit, the application will be automatically withdrawn. If there is no rejection, the application will be granted and published in the Gazette. The protection term for inventions is 20 years, and seven years for utility models.106 The whole patent procedure typically takes about four to five years. To streamline the procedure, IPOPHL now employs a standard language of formed paragraphs in processing applications.

IPOPHL typically allocates 150-180 applications to an examiner, depending on the field, to finish within six months. Therefore, on average, one examiner works on 30 applications per month or 360 applications per year. Unless applications are of a new technical field, this is manageable. Thus, a lack of qualified examiners in emerging fields, such as biotechnology and nanotechnology, is the most urgent problem. Despite extensive experience, IPOPHL patent examiners are not familiar with the new fields, making it almost impossible for them to adequately examine these applications. IPOPHL addressed this problem by hiring new graduates with training in the required fields.

An inadequate number of examiners is no longer a primary problem for IPOPHL, but approximately eight more examiners are needed due to a forecasted increase in patent applications as a result of IPOPHL’s heavy marketing activities.

106 The Intellectual Property Office of the Philippines, http://www.ipophil.gov.ph/main2.php?contentid=19 (accessed March 23, 2011). 93

Chart 21 Patent Application Flowchart

APPLICATION

FORMALITY EXAMINATION

PUBLICATIION OF UNEXPECTED APPLICATION IN THE IPO GAZETTE

REQUEST FOR SUBSTANTIVE EXAMINATION (WITHIN 6 MONTHS FROM THE DATE OF APPLICATION)

SUBSTANTIVE EXAMINATION

APPLICANT IS NOTIFIED OF REASONS FOR REFUSAL

OPINION AND/OR AMENDMENT

DECISION TO GRANT A PATENT FINAL REFUSAL BY EXAMINATION

PUBLICATION OF PATENT IN APPEAL TO DIRECTOR OF PATENT THE IPO GAZETTE FINAL REFUSAL BY DIRECTOR ISSUANCE OF PATENT CERTIFICATION APPEAL TO DIRECTOR GENERAL

FINAL REFUSAL

REFUSAL

COURT OF APPEALS

APPEAL TO SUPREME COURT

REFUSAL

Source: Intellectual Property Office of the Philippines (IPOPHL)

Beyond this, the Philippines office is taking the USPTO’s lead and conducting an end-to-end process review of its current policies and procedures to further improve office efficiency; these include the close monitoring of examiners by division heads, and a streamlining of the certificate notification process whereby the office director must sign and approve each

certificate only once, after all processing has been handled. The latter strategy, alone, reduced this part of the process from 6-12 months to a mere two.

Apart from these internal problems, incomplete applications can lead to further process delays via several rounds of application amendments. Consequently, some applicants may lose interest in pursuing the registration, and eventually withdraw their applications.

Table 44 Number of Application per Patent Examiner 2006 2007 2008 2009 2010 No. of Applications 3,802 3,900 3,856 3,541 4,005 Patent Examiners 56 55 53 51 52 Application/Examiner 68 71 73 69 77 Source: calculated from IPOPHL data. Number of applications includes patent and utility model applications.

Trademark Applications

The number of trademark applications grew at an annual growth rate of 4.7% during 2000- 2010, whereas the number of trademark registrations grew at 14.7%. Domestic trademark applications increased by 7%, and foreign applications by 2.3%. The trend for domestic applications is on the rise. Domestic and foreign trademark registrations grew at 26.4% and 9.3%, respectively. Registration of both foreign and domestic trademarks, however, declined substantially in 2008 and 2009, but increased in 2010.

From 2005-2010, few trademark applications were refused or withdrawn, representing 1.9% and 0.7% of total applications, respectively. Some applicants failed to submit responses to IPOPHL and, consequently, abandoned their applications. Many refused cases were due to applicant failures to search the IPOPHL database for conflicting marks prior to filing.

Table 45 Trademark Application and Registration by Origin

Applications Registrations Year NS Foreign Local Total NS Foreign Local Total

2000 1 5,648 4,975 10,624 2 2,306 545 2,853

2001 - 4,536 5,125 9,661 3 3,145 477 3,625

2002 2 4,740 6,281 11,023 4 3,091 661 3,756

2003 5 4,969 6,847 11,821 3 2,563 611 3,177

2004 1 5,272 6,870 12,143 5 5,099 1,694 6,798

2005 1 5,681 7,047 12,729 - 6,816 3,208 10,024

2006 2 6,169 8,323 14,494 2 7,634 5,030 12,666

2007 - 6,391 8,687 15,078 1 10,195 7,433 17,629

2008 1 6,978 8,874 15,853 1 7,286 6,588 13,875

Applications Registrations Year NS Foreign Local Total NS Foreign Local Total

2009 3 6,079 8,833 14,915 - 5,408 4,903 10,311

2010 1 7,080 9,763 16,844 - 5,603 5,675 11,278

Total 17 63,543 81,625 145,185 21 59,146 36,825 95,992 Source: Intellectual Property Office of the Philippines (IPOPHL) Note: NS means ‘not specific.’

Table 46 Refused and Withdrawn Trademark Applications by Origin Refused Withdrawn Year Domestic Foreign Total Domestic Foreign Total 2005 29 11 40 19 16 35 2006 274 82 356 103 61 164 2007 330 70 400 95 60 155 2008 274 52 326 92 17 109 2009 333 91 424 56 29 85 2010 182 40 222 42 25 67 Total 1,422 346 1,768 407 208 615

Source: Questionnaire

Trademark Procedures

Registration of trademarks and service marks is governed by the “Trademark Regulations” as amended by Office Order No.49 (2006). Trademarks and service marks are protected by Philippines laws for 10 years from the date of issue.

When a trademark application is submitted to IPOPHL, it first goes through examination, which takes approximately 4 to 6 months from the filing date. IPOPHL then issues a Notice of Allowance and publication for purposes of opposition; this occurs within 5 to 7 months of the filing date. Then the applicant pays the publication fee and IPOPHL publishes the application in the Official Gazette to allow for opposition. Any opposition must be made within 30 days from the release of IPOPHL’s Official Gazette. If no opposition is filed, IPOPHL then issues a Notice of Issuance; this takes place two to three months from publication of the application. The applicant then pays the issuance and publication fees within two months from mailing date of notice of issuance. IPOPHL then issues the certificate of registration. Normally, the average time for the entire trademark procedure is about ten months.107

107 CVCLAW Center, http://www.cvclaw.com/trademarks.php (accessed May 31, 2011) 96

In practice, it can take up to 18 to 24 months to complete a trademark registration. Reportedly, the backlog is caused by many factors. The important problem leading to delays during the trademark procedure involve incomplete or poorly prepared applications. Moreover, applicants sometimes fail to submit responses to official actions in time.

In addition, since there are many requests for application amendments from trademark examiners, the system should facilitate electronic communication between examiners and applicants in order to expedite the process.

As shown in Table 47, the number of applications per trademark examiner gradually increased since 2006. The annual average ratio was 495 applications per trademark examiner. However, this number also depends on other variables such as the examiner’s experience and competence. The number of trademark examiners dropped by five persons to only 29 examiners in 2010, from 34 in 2006. This led to the increase in the number of applications per examiner.

Table 47 Number of Application per Trademark Examiner 2006 2007 2008 2009 2010 No. of Application 14,494 15,078 15,853 14,915 16,844 Trademark Examiners 34 34 32 28 29 Application/Examiner 426 443 495 532 580 Source: calculated from IPOPHL data

Chart 22 Philippines Trademark Procedures

Source: IPOPHL

Automation and Information Technology

The patent search tool used in the Philippines is the Philippine Patent Online Search System (PhilPAT), which is available to the public. Users can search patents based on specific information such as titles, keywords and patent numbers. PhilPAT is under the IPOPHL’s Industrial Property Digital Library for Patents (IPDL-Patents) Project to upgrade IP technology. The office has also implemented the PCT-EDIS to enable access to PCT data from the WIPO server. In addition to these systems, IPOPHL is currently using the EPO’s GPI on a trial basis, and has also considered employing Thomson Reuters; but as the latter system proved too expensive for its limited value-added, the office looks to more fully utilize (or join) the GPI moving forward.

In addition to these search tools, IPOPHL developed an information management system focused on the reclassification of patent documents in accordance with the International Patent Classification (IPC) system. As of December 2009, more than 7,500 documents were classified related to industries such as food processing, pharmaceuticals, electronics,

nutraceuticals and home furnishings. In addition, the office has installed, with the assistance of the JICA, the PACSYS package to facilitate the patent administration system.108

Currently, IPOPHL is developing its own integrated IP management system (IIPMS) based on WIPO’s Industrial Property Automation System (IPAS), customized to its IP business and administrative process and integrated with its existing systems. The IPAS allows for fully automated IP processes and easily adapts to changes in laws, rules, and regulations. A final outcome of the system will be a more efficient and transparent IP system that will enable the IPOPHL to follow best practices and international standards in delivering timely and quality services. The system is expected to be finished by the end of 2012.109

While patent applications cannot be filed online, trademark applications may be filed at https://trademarks.ipophil.gov.ph/tmonline/, called ‘TM Online’ or the Trademarks Online Filing System. TM Online is an electronic system for filing applications for the registration of trademarks, service marks, geographical indications, and other marks of ownership. There are three Office Orders related to the streamlining of the online trademark filings: 1) Office Order 140: Streamlining of Trademark Registration; 2) Office Order 141: Amendment of TM Regulations on Publication in the IPOPHL e-Gazette and Rule 414 on TM Applications Filed Online; and 3) Office Order 142: Internal Implementing Guidelines for Office Order No. 140, Streamlining of Trademark Registration. Nevertheless, only corporate clients, via the Banco de Oro's debit payment, can use the system. This limits individual applicants who do not use law firms’ services.

IPOPHL trademarks related e-services also include TM Search and TM Gazette. Prior to filing a trademark application, the trademark database can be searched on TM Search. TM Gazette is the IPOPHL e-Gazette that publishes the marks applying for protection. The marks will be published in the e-Gazette Trademarks after publication fees are paid in full by the applicants.

IPOPHL is well equipped with approximately 339 computers, 20 servers, 168 printers and 41 scanners. Most computers in IPOPHL have Intel Core 2 Duo processors, and the internet bandwidth is 4.5 Mbps.

Table 48 Annual IT Budget during 2007-2009 Year Annual IT Budget (million pesos) 2007 70 2008 35 2009 30 Source: IPOPHL

Enforcement and Settlement

108 The Intellectual Property Office of the Philippines, Annual Report 2008-2009, p.17. 109 Marcial Corazon, “Accelerating & Innovating Into 2012,” a presentation at WIPO Regional Workshop on Digitization and Dissemination of Intellectual Property Information (IP) Information and Utilization of Effective Search Tools, December 7, 2010, Makati City Philippines. 99

According to the Republic Act No. 8293 of the IP Code, IPOPHL itself has no direct enforcement rights; rather, it is responsible for administering IPR policies which are enforced by the Supreme Court and the Regional Trade Courts, the Philippines National Police (PNP), the Bureau of Customs (BOC) and the National Bureau of Investigation (NBI). These agencies’ activities have led to a number of operations to combat counterfeit goods.

Recently, IP enforcement efforts have increased. There were many developments of IPR enforcement, especially the enactment of the President’s Executive Order No.736 in June 2008. The Order set up the National Committee on Intellectual Property Rights (NCIPR) as a permanent unit to promote and intensify IPR enforcement in the Philippines.110 With cooperation from a variety of government agencies, operations seized counterfeit goods worth over four billion pesos in 2010.111

In the case of patent infringement, the offender shall be punished by imprisonment for a period of not less than six months, but not more than three years and/or a fine of not less than PHP 100,000, but not more than PHP 300,000.112 Criminal penalties for trademark infringement include imprisonment from two to five years and a fine ranging from PHP 50,000 to PHP 200,000.113

Administrative enforcement as an alternative measure can be effective, and the Bureau of Legal Affairs, as part of the IPOPHL, is responsible for implementing mediation for inter- partes cases or launching arbitration procedures for IP dispute resolution. The office’s alternative dispute resolution initiatives, including hiring mediators and establishing a mediation office, have been strongly supported by the Supreme Court.

Recommendations

1. The handling of PCT applications should require less manpower due to the existence of the international search reports, written opinions, and preliminary examination reports. The lighter load will likely free resources, which should be redirected to address the substantial backlog of patent applications.

2. More examiners are needed.

3. To expedite the trademark and patent application processes, examiner-applicant electronic correspondence should be allowed.

4. A dedicated server is needed for the GPI system.

110 NCIPR, 2009 Accomplishment Report, http://www.ipophil.gov.ph/document/5caa99ad_NCIPR_2009_ACCOMPLISHMENT_REPORT_B.pdf (accessed March 24, 2011). 111 Summary of IP Enforcement Data, http://www.ipophil.gov.ph/document/c9a3ab7b_Stat2010.pdf; (accessed on March 24, 2011). 112 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/archive/archive/how_to_enforce_your_ipr/philippines.html (accessed on March 24, 2011). 113 Ibid. 100

VII. SINGAPORE

Overview

Singapore’s GDP in 2010 reached USD 292.4 billion; with only 4.74 million people, per capita GDP, adjusted for purchasing power parity, was roughly USD 57,200—the sixth highest in the world. Recovering from a contraction of 1.3% in 2009, the GDP growth rate reached 14.7% in 2010.

Singapore benefits from a large amount of foreign direct investment (FDI). In 2009 Singapore attracted FDI of USD 52.9 billion, or about 18% of GDP. Strong IPR protection has helped attract the more than 1,500 United States firms currently operating there.114

Major export markets for Singapore in 2010 were Hong Kong (11.6%), Malaysia (11.5%) and the United States (11.2%,) with a total value of USD 351.2 billion, whereas main sources of imports were the United States (14.7%), Malaysia (11.6%) and China (10.5%), with a total value of USD 310.4 billion in 2010. It should be noted, however, that re-export activities increase Singapore trade figures significantly.

The services sector was the main component of Singapore’s economy, representing 72.8% of GDP, especially business services, transport and storage, and hotels and restaurants, followed by industry at 27.2% (Singapore was inactive in the agricultural sector).115

Legal Framework

Singapore is party to most IP treaties, including the Paris and Berne Conventions, the WCT, WPPT, PCT, Madrid Protocol, Nice Agreement, Budapest Treaty, and the UPOV Convention. Additionally, Singapore is a member of the WTO and thus party to the TRIPS Agreement.

National legislation includes acts concerning copyrights, geographical indications, integrated circuits, trademarks, designs and patents. The Singapore Patent Act was promulgated in 1994, and subsequently amended in 1995, 2002 and 2005. The latest major amendments to the Act were issued in 2007 to align the law with two changes in PCT regulations. All of the amendments of Patent and Trademark legislation are shown below.116

 Patents Act (Chapter 221), effective February 23, 1995  Patents Act (Cap 221, 2005 Ed)  Patents (Amendment) Act, 1995, effective November 24, 1995  Intellectual Property Office of Singapore Act, 2001, effective March 30, 2000  Patents (Amendment) Act, 2001, effective August 31, 2001

114 Department of Statistics, Singapore, http://www.singstat.gov.sg/stats/themes/economy/biz/foreigninvestment.pdf (accessed March 28, 2011). 115 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html (accessed March 28, 2011). 116 Patrick Mirandah Co., http://www.mirandah.com/Patent_System_in_Singapore.aspx (accessed March 27, 2011). 101

 Patents (Amendment) Act, 2004, effective July 1, 2004  Trademark Act, amended by Act no. 3 of 2007, effective June 2, 2007

Intellectual Property Office

The Intellectual Property Office of Singapore (IPOS) has been under the Ministry of Law since 2001. It is the main government agency for four purposes: advising the government on IP matters; administering the national IP laws; promoting IP awareness; and providing development infrastructure for the IP system in Singapore.

IPOS is an autonomous agency of the Ministry of Law under the governance of a director general, two deputy directors-general, and 16 senior managers. There are five divisions and 19 departments and registries with about 170 staff in 2010.117 The Registries Division is responsible for granting rights for all IP in Singapore including patents, trademarks, designs, and plant varieties. The division also includes the Computerization Department and the Customer Service Department. The Computerization Department oversees the strategic use of information technology for all users of IP systems. The Customer Service Department maintains and improves all operational procedures in the area of customer service.

IPOS is a self-sustaining body. Its operating income comes from revenue generated by registration fees. The largest share of registration fees, approximately 56.1% of total in 2010, was derived from patents. Employee expenses, 47.8% of total expenditures, represented the majority of operating costs. More details of the IPOS’ income and expenses are provided in Table 49.

Table 49 IPOS Income and Expense (USD)

2009 2010 Operating income Registration fees 33,111,052 30,271,373 - Patents 18,358,620 16,971,380 - Trademarks 7,680,231 7,587,421 - Designs 603,919 518,713 - Madrid 6,363,980 5,086,534 - Patent agent 71,320 75,070 - Hague 32,982 32,255 Other fees and charges 346,210 202,281 Total 33,457,262 30,473,654

Operating expenditure Employee benefits expense 12,563,922 13,165,579 - Wages and salaries 10,873,891 11,277,828 - Employer’s contribution to defined contribution 1,244,577 1,316,012 scheme

117 Liew Woon Yim, Asian Symposium on Intellectual Property Protection & Cooperation, http://www.jpo.go.jp/torikumi/ibento/ibento2/pdf/asia_sympo_siryo/singapore_e.pdf (accessed on March 27, 2011). 102

- Staff welfare 267,073 267,073 - Staff training 178,381 178,381 Maintenance of office premises and computers 4,620,173 5,243,764 Rental of office premises 4,720,452 3,428,767 General and administrative expenses 5,949,879 3,398,947 Depreciation expense 3,193,990 2,298,700 Total 31,048,416 27,535,757 Operating surplus 2,408,846 2,937,897 Source: IPOS Annual Report 2009/2010 p.70-88.

Patent Applications

The overall number of patent applications increased from 2005 to 2007, and then dropped slightly in 2008, partly due to the global economic downturn. Domestic patent applications grew at a cumulative annual growth rate of 9.7% during this period, indicating progress in the nation’s technology development and IP interests. Nevertheless, domestic patent applications made up only 7.7% of total applications. (Table 50)

The top five domestic filers generated 44.5% of all Singaporean applications, and two filers – the Agency for Science, Technology and Research (208 applications) and Chartered Semiconductor Manufacturing Ltd. (92) – substantially outpaced the rest. The vast majority of applications come via the PCT every year. In 2009 the United States had the highest number of applications, especially from Qualcomm Incorporated (407 applications), followed by Japan, Singapore, Germany and Switzerland. (Chart 23 and Table 51)

From 2005 to 2009 there were 2,459 granted patents out of 3,562 domestic applications, or about 69%. The proportion was 75% for foreign patents. Most of the granted patents were in Class C (Chemistry; Metallurgy), Class G (Physics) and Class H (Electricity).118 (Table 52)

118 Classified by the International Patent Classification (IPC) System 103

Table 50 Applications and Granted Patents (2005 to 2009) Year Application Granted Domestic Foreign Total Domestic Foreign Total Non-PCT PCT 2005 572 1,834 6,199 8,605 557 7,120 7,677

2006 626 1,615 6,923 9,164 434 6,959 7,393

2007 729 1,813 7,413 9,955 476 7,001 7,477

2008 808 1,562 7,322 9,692 512 5,774 6,286

2009 827 1,654 6,255 8,736 480 5,129 5,609

Total 3,562 8,478 34,112 46,152 2,459 31,983 34,442

Source: IPOS Annual Report 2009/2010 p.47-50.

Chart 23 Five Leading Countries Filing Patent Applications in Singapore

4,000

3,000 2729 2,000

827 240 1,000 711 400 400 356 510 110 108 0 USA Japan Singapore Germany Switzerland

National PCT

Source: IPOS Annual Report 2009/2010 p.54-55.

Table 51 Top Five Domestic and Foreign Filers According to Patent Application in 2009

Domestic Applications Foreign Applications Name Amount Name Amount Agency for Science, Technology and 208 Qualcomm Incorporated (US) 407 Research Chartered Semiconductor Interdigital Technology Corporation 92 119 Manufacturing Ltd (US) Nanyang Technological University 24 F. Hoffmann-La Roche AG (CH) 111

Creative Technology Ltd 23 Lam Research Corporation (US) 108

National University of Singapore 21 Novartis AG (CH) 97 Source: IPOS Annual Report 2009/2010 p.52.

104

Table 52 Patents granted based on International Patent Classification System (IPC)

Field of Technology for Granted Patents

2008 2009

Class A – Human Necessities 1,285 1,295

Class B – Performing Operations; Transporting 986 960

Class C – Chemistry; Metallurgy 1,760 1,681

Class D – Textiles; Paper 47 51

Class E – Fixed Constructions 184 134

Class F – Mechanical Engineering 289 233

Class G – Physics 1,703 1,443

Class H – Electricity 1,537 1,443 Source: IPOS Annual Report 2009/2010 p.63.

Patent Procedure

IPOS is unique in ASEAN in that it has no patent examiners. Applications are processed either by outsourcing substantive examinations or through a certification process that uses patents granted by other patent offices as the basis for granting local patents.

Outsourcing of patent examinations is done primarily for domestically filed applications not utilizing the PCT route. IPOS has agreements with the Hungarian, Austrian and Danish patent offices to conduct substantive examinations of such patent applications. The examination results produced by these offices serve as the patentability decisions of the IPOS.

Alternatively, international applications and domestic applications submitted through the PCT route may make use of the IPOS certification process. In such cases, an applicant would need to provide IPOS with proof of a patent issued by a patent office with ISA designation that corresponds with the patent application in file with the IPOS. If the IPOS is able to match the granted patent with the corresponding application on file, the IPOS certifies the application and grants a patent for Singapore.

Otherwise, the patent procedure comprises the normal steps—submission, date of filing, search and examination, and grant. Since 2003, applicants have been able to submit an application online via ‘ePatents’, or to submit paper copies at the Registry of Patents. If the applicant files earlier in a Paris Convention or WTO country, the applicant may claim this earlier application as priority within 12 months of the filing date of the earlier application. The Registry of Patents will perform a preliminary examination. If the application complies with all requirements, the search and examination can then be processed. IPOS offers three

105

variations of the process: an all-local approach119, an all-foreign approach120 and a combination of local and foreign approaches121.

The publication of the application typically takes place 18 months after the priority date or the date of filing in the Patents Journal, and a search report is not compulsory for publication. If there is no objection, the patent will be granted. The national term of a granted patent is 20 years from the filing date. It can be extended if there is 1) an excessive delay on the part of IPOS, 2) an unreasonable delay from another foreign patent office, or 3) an unreasonable delay for the approval of bringing pharmaceutical products to the market. For revocation or reexamination, a request must be filed with IPOS.

Since 2004, applications may follow one of two examination tracks. The Fast Track, which is used by default, requires that a fee for the patent grant be paid within 42 months of the filing date. The Slow Track requires that the payment occur within 60 months. A request for moving from the former to the latter must take place prior to month 39.122 From first filing to final approval, average patent registration times range widely, from three to six years. As patent registration at IPOPHL depends almost entirely on foreign offices’ proceedings, no measures to significantly decrease registration times are currently foreseeable.

IPOPHL applicants’ first challenge arises in deciding between pursuing a local (outsourced) and a foreign registration. Both processes are complicated, and distinctions between the two are not straightforward to many applicants. Local-route applicants may face another major problem – significant discrepancies exist between the three partner offices (Austria, Hungary and Denmark), not only in procedures (i.e. case handling), but also in office competencies. Furthermore, as IPOS recently lost IP Australia as an outsourcing partner (its only international partner), patent applicants may no longer perceive local Singaporean-issued patents as having international-standard status.

Under the IPOS’ current “self-assessment” system, by which applications are not rejected by unsatisfactory substantive examination results (i.e. an unpatentable invention may still be granted a patent if the applicant successfully fulfills all formal procedural obligations), few applications fail to be registered. Flexible formal requirements (most application deadlines can be extended) further substantiate this fact.

Trademark Application

The number of foreign trademark applications was much higher than that of domestic applications during the 2000-2008 period. A 2004-2007 influx of foreign applications reached a peak in 2006, but started to decline in 2007 and 2008.

119 All-local approach, the applicant can request either a search-then-examination or a combined search-and- examination process. 120 All-foreign approach, the applicant can present the search and examination results of the grant of a corresponding international application; therefore, it is not necessary for the Registry of Patents to do a further search and examination. 121 Combination approach, the applicant can request for an examination relying on the search results of the grant of a corresponding international application. 122 Intellectual Property Office of Singapore, http://www.ipos.gov.sg/leftNav/pat/Applying+for+a+Patent+in+Singapore.htm (accessed on March 27, 2011). 106

Domestic applications, on average, accounted for 19.3% of the total number of trademark applications, whereas domestic registrations accounted for 16.6% of the total number of registrations in this period. Overall, the number of domestic and foreign applications grew at a rate of -2.6% and -2.5%. On the registration side, the number of domestic registrations grew at a much higher rate (7.6%) than that of foreign registrations (2.6%). (Table 53)

Table 53 Number of Trademark Applications and Registrations in Singapore Year Application Registration Domestic Foreign Total Domestic Foreign Total 2000 5,187 17,062 22,249 1,970 13,052 15,022 2001 3,281 16,992 20,273 2,487 14,225 16,712 2002 3,343 16,732 20,075 3,388 19,553 22,941 2003 4,254 17,032 21,286 5,735 28,790 34,525 2004 4,839 18,409 23,248 4,063 17,238 21,301 2005 5,067 21,919 26,986 4,154 17,534 21,688 2006 4,852 24,364 29,216 3,865 22,055 25,920 2007 4,602 19,781 24,383 5,393 25,238 30,631 2008 4,209 13,964 18,173 3,544 16,073 19,617 Total 39,634 166,255 205,889 34,599 173,758 208,357 Source: IPOS

Table 54 Percentage of Local Based and Foreign Based Trademark Application

No. of applications by No. of applications by Year Total local-based entities foreign-based entities

4,336 (25%) (by application) 13,068 (75%) (by application) 17,404 (by application) 2010 6,407 (21%) (by class) 24,704 (79%) (by class) 31,111 (by class) 15,446 (by application) 4,110 (27%) (by application) 11,336 (73%) (by application) 2009 22,214 (79%) (by class) 28,262 (by class) 6,048 (21%) (by class)

4,209 (23%) (by application) 18,173 (by application) 13,964 (77%) (by application) 2008 28,161 (82%) (by class) 6,049 (18%) (by class) 34,210 (by class) 4,602 (19%) (by application) 19,781 (81%) (by application) 24,383 (by application) 2007 5,411 (17%) (by class) 26,749 (83%) (by class) 32,160 (by class)

2006 4,852 (17%) 24,364 (83%) (by application) 29,216 Source: IPOS123

Most trademark applications are filed in Class 9, with an average of 3,200 applications each year. The second highest number of trademarks is filed in Class 42, with an average of 1,460

123 Intellectual Property Office of Singapore, http://www.ipos.gov.sg/topNav/pub/sta/tra/No.+of+Trade+Mark+Applications+in+Singapore.htm (accessed March 25, 2011). 107

applications each year.124 The fewest applications are filed in Class 15 (musical instruments), with an average of only 33 applications annually. (Table 54)

Trademark Procedures

It takes approximately six to twelve months to register a trademark in Singapore. The term of protection is 10 years from the date of application, and can be renewed. Singapore allows registrations of trademarks, certification marks, and collective marks.

Once an application is accepted, it goes through a formality examination by the Registry of Trade Marks to ensure all the required information has been submitted and fees have been paid. Then, trademark examiners will conduct a search and examination to ensure the mark is distinctive from other registered marks and conforms to the law. Next, the mark will be published in the Trade Marks Journal, open to opposition by any interested party. If there is no opposition, or once opposition is resolved, the mark will be registered and a registration certificate will be issued. (Chart 24)

Before filing an application for the registration of a trade mark in Singapore, it is advisable to first conduct a search of the existing trade marks in the records maintained by the Registry of Trade Marks. This is to ensure that there is no prior trade mark that is identical or similar to the one intended for registration, particularly in the area of business. As the IPOPHL’s exceedingly strict examination of distinctiveness and conflicting marks often results in application complications, and even rejections, this prior search is very important. The search can be conducted through the IPOS Public Search Area or via eTradeMarks.

Automation and Information Technology

IPOS provides three public sources for IP information search that cover both existing and published applications.

The first source, ‘ePatents’, provides only patent-related information as a one-stop service for patent applicants. The applicant can submit an application online via Online Internet Service (OIS). The applicant can also search patent information and journals. Data on patents from 1937 are available on the website free of charge for personal users. The database of this website contains Singapore patents only. The applicant can select searchable criteria by using simple search, advanced search or specification search. Patent records, especially for older information, are not always comprehensive.

Trademark users can access ‘e-Trademarks’ through the websites listed below. The system is meant to be as a one-stop solution providing electronic filing of trademark transactions.

124 Class 9 are Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signaling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; automatic vending machines and mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment and computers; fire-extinguishing apparatus. Class 42 are Scientific and technological services and research and design relating thereto; industrial analysis and research services; design and development of computer hardware and software. 108

 http://tmsearch.ipos.gov.sg/eTMSearch/eSearchOption.jsp for an online trademarks search. This website is a search engine providing general information on marks and classification. There are three main options for the trademark registration search: Similar Mark Search, Online Trade Marks Search and Classification of Goods and Services.125  http://www.ipos.gov.sg/main/oursvcs/EZIP/etm/intro.html for online submission of trademark applications.

Another search tool is ‘Surf IP’ which provides searches on patents, trademarks and industrial designs through www.surfip.gov.sg. The data on this website is derived from several foreign IP offices; USPTO, IPOS, WIPO, EPO, SIPO (China), CIPO (Canada), KIPO (Korea), Patentmaps (PM), TIPO (Taiwan), UK-IPO, TIPIC (Thailand) and JPO (Japan). The applicants are able to select different types of searches by entering only a word or sentence, or by searching from title, abstract, claims, description, applicant, and inventor name.

125 ‘Classification of Goods and Services’ search function allow users to check the classification of product by choosing 34 Goods and Services under the Nice Agreement to which Singapore is a signatory (“Nice Classification”). The class headings of the Nice Classification give general information about the types of goods and services which belong to each class. A specification indicating the class heading does not amount to a claim for all the goods or services in that class. This list is not exhaustive and serves as a quick reference to help you locate the correct class. 109

Chart 24 Singapore Trademark Procedures

Stage Registry Applicant Opponent

Submission of Trade Mark Application

Application will be checked for completeness and Inform applicant in writing if To make amendment or correct deficiency there is amendment required or Formality Examination whether representation of the mark provided is spot otherwise application is withdrawn deficiencies spotted acceptable. A Trade Mark no. and date of application will be allocated

Reject the application if the mark Search Search for the conflicting mark, geographical To modify/amend Trade Mark and names, and conformance to the International conflicts with the search criteria submit new application Classification of goods and Services

Examination Examine if the Trade Mark is registrable in Inform applicant of objections, if To overcome any objections raised accordance with the Trade Mark Act any, and allow applicant to revert. by the Registrar of Trade Mark Upon acceptance, the application will be published Publication in the Trade Mark journal which may be accessed by any member of the public Notice of opposition Opponent files Notice of Any interested party may oppose Opposition the registration of the mark within Opposition 2 months of the publication Applicant to serve a counter-statement. Proceedings Otherwise, application is deemed withdrawn Opponent to file evidence in support of this opposition. Otherwise, Outcome of hearing in opposition is deemed withdrawn favor of the applicant A hearing before the Registrar takes place followed by a decision at the hearing. If opposition is dismissed in favor of the applicant, the applicant proceeds to registration. Otherwise the application be refused

Successful Registration Application Refused

Source: Intellectual Property Office of Singapore, http://www.ipos.gov.sg/NR/rdonlyres/44095045110 -6D97- 43E5-91D1 -948F670B9031/452/tmapp_flowchart.gif

Enforcement

IPOS is the leading government agency in policy-making and drafting legislation dealing with IP enforcement. Several other agencies, however, are in charge of other aspects of IPR enforcement. These include Customs, the Police, the Immigration and Checkpoints Authority, the Ministry of Law and the Attorney General’s Chambers as the public prosecutor.126

Patent and trademark infringement can be penalized via civil action. For patent infringement, civil remedies include an injunction to stop the infringing activity and an award of damages based on the profits gained by the infringing party and/or losses suffered by the rights holder. For trademark infringement, civil remedies include a sanction to stop the infringing action and to demand the profits gained by the infringing party or damages for the loss suffered. There is no specialized court for IP. All civil actions are initiated in the Subordinate Courts or the High Court, and appealed to the Court of Appeals.127

However, IPOS offers alternative dispute resolution through the Hearings and Mediation Division. The stakeholders will be asked to consider negotiation, Case Management Conferences (CMCs)128 and pre-hearing reviews. Most patent disputes are resolved by hearings whereas most trademark disputes are resolved by CMCs and pre-hearing reviews.129

Recommendations

1. IPRs are clearly well-protected in Singapore through modern administrative procedures and effective enforcement mechanisms. However, IPOS’ practice of outsourcing all search and examination work to three different offices creates the risk disparity between the results of examinations and the final decisions on granting patents. All search and examinations should be outsourced to one international office.

2. Provide a local appeal procedure so that any adverse decision of the contracting patent office can be appealed to IPOS, with a further right of appeal to the Singapore Court.

3. The technical expertise of the IPOS should be strengthened through recruitment and/or training.

4. The two-track system leads to a long pendency period in light of the rapid obsolescence of certain technologies, especially in those fields in which Singapore specializes.

5. The IPOS should abandon the “self-assessment” system, granting patents only to those applications receiving positive examination results.

126 Liew Woon Yin, Asian Symposium on Intellectual Property Protection and Cooperation, http://www.jpo.go.jp/torikumi/ibento/ibento2/pdf/asia_sympo_siryo/singapore_e.pdf (accessed March 27, 2011). 127 ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/archive/archive/how_to_enforce_your_ipr/singapore.html (accessed March 27, 2011). 128 IPOS implemented Case Management Conferences (CMCs) as a formal dispute resolution for every case since 2009. 129 IPOS, Annual Report 2009/2010, 64.

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6. IPOS should review its current trademark registrability standards and consider adopting a more straightforward examination process for the benefit of trademark applicants.

7. The Singaporean administration may want to consider an IPOS under the Ministry of Trade and Industry, as opposed to its current organization within the Ministry of Law, as this refocused office might better serve the country’s development agenda (i.e. an office set up to serve industry via IP policy and implementation could more efficiently respond to business trends and needs.

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VIII. THAILAND

Overview

The total GDP of Thailand in 2010 was USD 580.3 billion, resulting in a per capita GDP of USD 8,700, adjusted for purchasing power parity. After Singapore and Malaysia, Thailand has the third highest per capita GDP in ASEAN. The main components of Thailand’s economy are industry (45.6%), services (44%) and agriculture (10.4%).

With exports reaching USD 191.3 billion and imports at USD 156.9 billion in 2010, Thailand’s trade balance was positive. Primary export destinations include the United States (10.9%), China (10.6%) and Japan (10.3%). On the import side, products are mainly arriving from Japan (18.7%), China (12.7%), and Malaysia (6.4%).

Thailand’s main exports are textiles, footwear, fishery products, rice, rubber, jewelry, automobiles, computer parts and electrical appliances. Key imports include capital goods, intermediate goods, raw materials, consumer goods and fuels.130

Legal Framework

Thailand is party to the Berne Convention and is a member of WTO and thereby party to the TRIPS agreement. Additionally, Thailand became a signatory to the PCT in September 2009. Thailand is now studying the impacts of accession to the Madrid Protocol. A working group of legal experts from both government and the private sector has been established to oversee accession to the Protocol.131

Thailand has promulgated laws dealing with patents, first in 1979 with the Patent Act BE 2522, then with subsequent amendments in 1992 and 1999 by the Patent Act No. 2 and No. 3, respectively. In the field of trademarks, new legislation was enacted in 2000 (Trademarks Act No. 2, BE 2543). There is an intention, with redrafting ongoing, to amend the Patent Act as well as the Trademark Act. A chronology of Thailand’s IP history is presented as follows:

1914 The Trademarks and Trade Names Act, B.E. 2457 (1914) was promulgated. 1936 The Trademark Act, B.E. 2474 (1931) 1961 The Trademark Act (No. 3), B.E. 2504 (1961) 1963 In 1923 a unit dealing with patent law was established as a division of the Department of Commercial Registration. 1978 The Copyrights Act, B.E. 2521 (1978) 1979 The Patents Act, B.E. 2522 (1979) 1991 The Trademark Act B.E. 2534 (1991) was promulgated, repealing the Trademark Acts of 1931 and 1961.

130 Central Intelligence Agency. https://www.cia.gov/library/publications/the-world-factbook/geos/th.html (accessed March 25, 2011). 131 Department of Intellectual Property. http://www.ipthailand.go.th/ipthailand/index.php?option=com_content&task=view&id=613&Itemid=331 (accessed March 25, 2011).

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1992 The Department of Intellectual Property (DIP) was established to take the principal role in registering IPR in accordance with Thai law. The Patents Act (No. 2), B.E. 2535 (1992) 1997 The Central Intellectual Property and International Trade Court was founded. 1999 The Patents Act (No. 3), B.E. 2542 (1999) [the current patent law, amending the Patents Act, B.E. 2522 (1979)] and The Protection of Plant Varieties Act, B.E. 2542 (1999) 2000 The Trademarks Act (No. 2), B.E. 2543 (2000) [the current trademark law] and The Protection of Layout-Designs of Integrated Circuits Act, B.E. 2543 (2000) were promulgated. 2002 The Trade Secrets Act, B.E. 2545 (2002) 2003 The Protection of Geographical Indications Act, B.E. 2546 (2003) 2005 The Manufacture of Optical Discs Act, B.E. 2548 (2005) 2009 Accession to the Paris Convention for the Protection of Industrial Property and the Patent Co-operation Treaty (PCT) in December 2009.

Intellectual Property Office

In 1992, with the passage of Patent Act No. 2 (B.E. 2535), the Department of Intellectual Property (DIP) was created as a part of the Ministry of Commerce. The DIP is responsible for: 1) Performing work in connection with the protection of intellectual property rights under the IP law. 2) Performing work in connection with the protection of IP. 3) Performing work in connection with registration for protection of IPR under international agreements or cooperation. 4) Promoting the protection of IPR both domestically and overseas. 5) Conducting reforms and revisions for legislation related to the protection of IP. 6) Performing work in connection with the suppression of intellectual property infringement. 7) Promoting activities leading to the creation, management and commercial exploitation of IP. 8) Handling the settlement of IP disputes. 9) Performing such other activities as prescribed by law to be under the responsibility of the Department of Intellectual Property.

The DIP structure is illustrated in Chart 25.

The DIP is not an autonomous body and does not have the authority to manage its own budget. In 2010, the government allocated THB 226.1 million for DIP operations, whereas the revenue of the DIP, from registered fees, booklets and other sources, neared THB 385 million. Until now the DIP’s revenues have always been much greater than the budget allocated from the government. Repatriation of these funds should be reconsidered, as there are still a great number of projects yet to be undertaken by the office that will require sufficient funds to be successful (i.e., increasing the workforce, establishing measures for efficient and effective enforcement of IP, IT system upgrades, etc.). The office reportedly seeks to undergo a clean-sweep of its processes in order to increase application turnover and, consequently, is currently struggling with existing channels to corporatize its operations. The forthcoming ASEAN Economic Community may well be an effective medium through which to facilitate future efforts toward autonomy. Accordingly, the office has commissioned

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Chulalongkorn University to conduct a study on office corporatization, and to engage ASEAN and other international organizations in supporting the office in progressing toward this goal. Thai officials affirmed that government bureaucracy will pose the greatest challenge to the DIP moving forward.

Table 55 Budget of the DIP by Type (THB)

Budget of the DIP (THB Million)

Type of Budget 2007 2008 2009 2010 2011

Personnel 76.9 80.4 92.1 95.5 100.6

Operating 61.6 68.4 115.2 110.0 105.1

Investment 15.4 32.7 20.7 14.9 19.6

Supporting 0.5 2.7 2.6 2.6 2.7

Others 4.0 5.4 13.8 3.1 88.2

Total 158.3 189.5 244.4 226.0 316.2 Source: Annual Report 2008, 2009, 2010, Department of Intellectual Property, Ministry of Commerce of Thailand

Chart 25 Structure of the Thai Department of Intellectual Property

e art ent of Intelle t al Pro ert

Office of the Office of Secretary Prevention and Trademark Suppression of Office Intellectual Property Rights Intellectual Property Intellectual Property Management Legal Office Promotion and Office Development Division

Administration System Design Office PCT Receiving Enhancement Office Group

Source: Adjusted from Annual Report 2010, Department of Intellectual Property, Ministry of Commerce of Thailand

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Table 56 Revenue and Budget of the DIP

Revenue of the DIP (THB Million)

Type of Revenue 2006 2007 2008 2009 2010

Registered Fee 336.2 357.9 360.2 349.9 383.8 Booklets and 2.1 2.0 1.6 1.4 1.3 Others Total Revenue 338.3 359.9 361.7 351.3 385.0 Source: Annual Report 2008, 2009, 2010, Department of Intellectual Property, Ministry of Commerce of Thailand

Table 57 presents the total number of staff employed by the DIP. The year 2009 marked a significant development in the Thai Patent Office as the number of patent examiners almost doubled from 24 in 2001 to 41 in 2009 (with 42 in 2010). However, not all the examiners worked on invention applications. In fact, in 2010 only 17 examiners were substantive examiners, responsible for invention applications. These examiners work in three main groups: biotechnology and pharmaceutical products; chemistry; and engineering, electrical and physics. The rest, including assistant examiners, worked on design patent and petty patent applications.

The number of trademark examiners in 2001 was 24, but has declined to 18 in 2010.

Table 57 Number of Personnel in the DIP

Number of personnel in the Thai Department of Intellectual Property

Type of Personnel 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Government Officials: Patent Examiner 24 24 29 29 29 29 29 29 41 41 Trademark Examiner 21 21 18 18 18 18 18 20 16 18 Administration 13 13 13 15 15 15 15 16 15 16 position Legal Officer 18 18 26 26 26 26 26 26 32 32 Supporting Staff & 83 82 114 112 111 111 110 107 128 122 Others Subtotal 159 158 200 200 199 199 198 198 232 230 Permanent Contract 45 45 45 43 42 42 39 38 36 36 Employees Temporary Contract 86 101 116 133 ------Employees Government - - - - 134 134 137 138 139 139 Employee Total 290 304 361 376 375 375 374 374 407 405 Source: Annual Report 2008, 2009, 2010, Department of Intellectual Property, Ministry of Commerce of Thailand

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Most patent examiners have a degree in science; 11.9% possess a bachelor’s degree and the rest have a master’s degree in non-science. Most of the examiners have experience of less than 10 years; 23.8% have 10 to 15 years of experience and 11.9% have 15 to 20 years of experience. (Table 58 and Table 59)

Slightly more than half (55.6%) of the trademark examiners graduated with a bachelor‘s degree. The rest have a master’s degree. All of these degrees are in non-science fields. More than half of the trademark examiners have more than 10 years of experience. (Table 58 and Table 59)

Table 58 Number of Examiners by Educational Profile Degree

Office Bachelor Master Doctoral Non- Non- Non- Science Science Science science science science Patent 37 - - 5 - - examiners Trademark - 10 - 8 - - examiners Source: DIP

Table 59 Number of Examiners by Years of Experience Less than 5 More than Office 5-10 years 10-15 years 15-20 years years 20 years Patent 27 10 5 - examiners Trademark 2 6 5 5 - examiners Source: DIP

The starting salary of both patent and trademark examiners is THB 12,000. For a junior level with experience between 0-5 years, this is much better than the minimum salaries in many fields, including engineering, human resources, and finance and accounting. The maximum salary of THB 50,000 for a senior level with 5-10 years is considered low, compared to the previously mentioned fields, in which salaries often reach six figures.132

Patent Applications

In Thailand, a patent is categorized as either an invention or a design, while utility models are referred to as petty patents. During 2000 to 2010, on average, most of the patents were designs, whereas only 15.3% were inventions. Overall, the numbers of domestic patent applications are much lower than that of foreign applications. Applications originating from

132 Adecco. Thailand Salary Guide 2011, p.1.

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Thailand amounted to approximately 38.4% of total applications (Table 60). From 2005 onward, the volume of patent applications has been relatively stable at around 10,000 per annum.

Total applications fell by 43.1% in 2010 due to Thailand’s joining of the PCT in January of that year. The drop occurred mostly in foreign invention applications.

Table 60 Number of Patent Application in Thailand Number of Patent Application in Thailand Total of Patent Invention Design Year Thai Foreign Subtotal Thai Foreign Subtotal Thai Foreign Subtotal 2000 2,500 5,246 7,746 561 4,488 5,049 1,939 758 2,697 2001 2,504 5,490 7,994 534 4,798 5,332 1,970 692 2,662 2002 3,030 4,696 7,726 615 3,874 4,489 2,415 822 3,237 2003 3,426 5,148 8,574 802 4,141 4,943 2,624 1,007 3,631 2004 3,428 5,514 8,942 819 4,554 5,373 2,609 960 3,569 2005 4,258 6,627 10,885 891 5,449 6,340 3,367 1,178 4,545 2006 3,564 6,257 9,821 1,040 5,221 6,261 2,524 1,036 3,560 2007 3,478 6,861 10,339 945 5,873 6,818 2,533 988 3,521 2008 3,637 6,924 10,561 902 5,839 6,741 2,735 1,085 3,820 2009 4,196 5,534 9,730 1,025 4,832 5,857 3,171 702 3,873 2010 3,539 2,000 5,539 891 1,034 1,925 2,648 966 3,614 Total 37,560 60,297 97,857 9,025 50,103 59,128 28,535 10,194 38,729 Source: DIP Website

Table 61 Number of Patent Registration in Thailand

Number of Patent Registration in Thailand Total of Patent Invention Design Year Thai Foreign Subtotal Thai Foreign Subtotal Thai Foreign Subtotal 2000 164 580 744 45 371 416 119 209 328 2001 418 1,098 1,516 58 738 796 360 360 720 2002 635 1,831 2,466 39 1,063 1,102 596 768 1,364 2003 797 1,529 2,326 56 950 1,006 741 579 1,320 2004 867 1,177 2,044 57 659 716 810 518 1,328 2005 505 817 1,322 62 491 553 443 326 769 2006 568 1,310 1,878 118 1,003 1,121 450 307 757 2007 662 1,162 1,824 118 830 948 544 332 876 2008 781 1,404 2,185 62 904 966 719 500 1,219 2009 768 1,242 2,010 59 787 846 709 455 1,164 2010 889 1,215 2,104 48 724 772 841 491 1,332 Total 7,054 13,365 20,419 722 8,520 9,242 6,332 4,845 11,177 Source: DIP Website

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Table 62 Statistics of Petty Patent Application and Granted Statistic of Petty Patent Application and Granted Application Registration Year Thai Foreign Total Thai Foreign Total 2000 555 61 616 108 17 125 2001 745 66 811 341 51 392 2002 1,148 74 1,222 376 13 389 2003 1,290 54 1,344 476 11 487 2004 1,390 64 1,454 364 28 392 2005 1,561 91 1,652 592 17 609 2006 1,968 94 2,062 750 41 791 2007 1,354 81 1,435 852 50 902 2008 1,423 92 1,515 638 73 711 2009 1,416 51 1,467 451 43 494 2010 1,238 90 1,328 634 51 685 Total 14,088 818 14,906 5,582 395 5,977 Source: DIP Website

Based on available data, from 2000 to 2010 the average pending rate of patent applications was approximately 7.2% per year, while the rate for petty patent applications was about 5.4% per year. Since the rejected and abandoned numbers are not available, the pending rate calculated here will most likely be overestimated.133

Patent Procedure

All types of patent applications must be filed at the Registration Section of the Patent Office in the Department of Intellectual Property, or via registered mail to the office. When a patent application for an invention has been filed and a fee paid, and after the preliminary examination is complete, the responsible officer will publish the application for 90 days. If there is no opposition, the applicant must request an examination within five years of the publication date. The Patent Office Department will do a prior art search and then grant the patent if the application qualifies. To accelerate the search and substantive examination process, applicants can request IP Australia to conduct the examination; however, as this alternative approach requires a hefty additional fee, it is not very popular, accounting for only five applications per year. In the case of a patent on product design, the applicant is not required to request an examination; the office will do the examination automatically, 90 days after the publication. Every granted patent must be signed by the Director General within three days of the receipt of application; this policy, in the absence of the Director General, results in unnecessary process pendency. Patents receive 20 years of non-renewable protection, counted from the filing date. A petty patent is protected for six years and is renewable for two years, up to a maximum of ten years from the filing date.

133

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Thailand became the 142nd contracting state of the PCT on December 24, 2009. The implementation of the PCT is not retroactive, and applies only to PCT applications filed on or after December 24, 2009. Thailand’s DIP officially opened the PCT Thailand Receiving Office on September 29, 2009, and as of October 2010, the office has received 42 PCT applications.

A PCT application seeking protection in Thailand has 30 months after the filing date of the PCT to file a national phase application. All the necessary documents must be translated into the Thai language. Currently, international applications filed by nationals or residents of Thailand can use the following offices as a competent ISA and IPEA: the Japanese Patent Office, European Patent Office, Korean Intellectual Property Office, State Intellectual Property Office of the People’s Republic of China, and the United States Patent and Trademark Office.

Chart 26 Flow Chart of Patent for Invention Application

Source: Annual Report 2009, Department of Intellectual Property, Ministry of Commerce of Thailand

PCT allows 8 to 18 months to complete the national filing. This should benefit Thai patent applicants as they can receive a 90% discount for the PCT application fee as well as a 75%

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discount for the EPO examination fee.134 In addition, the applicants are able to evaluate their applications, using the examination results of an international examination, to decide whether it is worthwhile to file the application in the national phase in other countries. However, a problem is expected due to the time limitation; having to wait for the PCT examination results (the 28th month), foreign PCT applicants will have only two months to prepare necessary documents and translate their applications into Thai when filing in the Thailand national phase. This time restraint is typically difficult to meet. Although there is a grace period that allows a delay in submission of the translated applications, legitimate reasons (i.e. beyond translation issues) are required.

In theory, the patent procedures should take an average of 33 months. In reality, this could take up to five to six years or more. Patent applications in physics and biotechnology fields can reportedly take 5-9 years. The primary problem causing the delay is an insufficient number of examiners, and as the government limits the size of the office’s staff, this barrier currently appears insurmountable. During 2001 to 2008, on average, a patent examiner is responsible for 561 applications per year, including invention, design and petty patent applications. The situation improved in 2009 and 2010 due to additional examiners and fewer applications, a result of the PCT; applications per examiner in 2009 and 2010 were 273 and 164, respectively. However, this average may be underestimated because, as mentioned above, there were only 27 examiners who examine invention patent applications. Taking into account only invention patent applications and the related examiners, the average applications per examiner was 421 in 2008 and 254 in 2009, before a drastic decrease in applications in 2010 which led to an average of 71. Before 2010, each invention examiner would have to finish roughly more than one invention application for every working day in a year. To alleviate the backlog problem, the DIP also outsources some patent search and substantive examinations to competent outside agencies, with additional fees incurred on applicants.

Incomplete and poorly prepared applications are also important factors. A majority of domestic applicants, such as small inventors, prepare their applications themselves, rather than hiring a law firm to do the job, as they cannot afford to pay the associated high fee. For cases in which applicants do not have sufficient knowledge to prepare applications, patent examiners often need a long period of time to examine and provide feedback and suggestions. Another problem occurs with foreign applications; although most of the foreign applicants only need to submit their translated examination results or foreign-granted patent documents, the translations are often poor, making the applications unclear and difficult to examine. Most foreign applications are in English language; this causes another serious issue for examiners, who have great difficulty in reading the applications’ technical descriptions.

In the past, the DIP has provided several remedies to alleviate the domestic problem. These include organizing patent agent training courses for the public, whose members must pass a test and be registered to become a patent agent, and the signing of 15 MOUs with government agencies and educational institutions which provide patent agent training for their personnel in an attempt to create patent agents who can charge inexpensive fees. Both methods helped to alleviate the problem, but they did not eradicate it; despite the trainings, these patent agents often still lack necessary skills and experience. Most of the trained agents do not become full-time patent agents. Presently, the DIP offers a patent training course for about THB 80,000 for 100 hours.

134 It is worth noting that this discount is made possible by a government incentive to encourage Thai locals to file patent applications; if the office were to be corporatized, the application fee would likely need to be increased to support the independent office, and this may deter locals from filing for patent protection.

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A lack of experienced examiners also leads to delays in the patent registration procedure. Table 59 shows that more than 60% of the examiners have less than five years of experience.

Other problems include insufficient search tools and a lack of qualified examiners. The DIP is not currently hiring new examiners, and the office is skeptical of new technology training initiatives for seasoned employees. Firstly, these examiners are often unwilling or unable to abandon established habits; also trainings take time away from staff members’ already overbooked schedules. The office desires to bring in young examiners freshly trained in emerging fields; however, under limitations imposed by the present administration, this is not possible.

Trademark Applications

In Thailand, the number of domestic trademark applications has always exceeded that of foreign applications. According to Table 63, domestic applications accounted for about 65.7% of the total trademark applications. In terms of total trademarks registered, domestic registrations accounted for 60.7%. On average, in the past ten years, 60% of registered trademarks were domestic.

Table 63 Trademark Application and Registration in Thailand Trademark Application and Registration in Thailand Application Registration Year Domestic Foreign Total Domestic Foreign Total 2000 15,495 11,560 27,055 7,686 6,531 14,217 2001 16,712 9,407 26,119 11,453 8,484 19,937 2002 21,518 8,591 30,109 13,281 9,865 23,146 2003 23,335 9,714 33,049 11,440 6,543 17,983 2004 26,414 10,554 36,968 15,918 7,614 23,532 2005 24,275 12,148 36,423 18,497 8,948 27,445 2006 21,171 12,401 33,572 15,595 8,520 24,115 2007 20,140 13,415 33,555 14,769 9,871 24,640 2008 21,950 13,472 35,422 12,574 9,367 21,941 2009 24,733 11,354 36,087 11,981 10,502 22,483 2010 24,781 12,875 37,656 13,268 8,562 21,830 Total 240,524 125,491 366,015 146,462 94,807 241,269 Source: Department of Intellectual Property, Thailand

Trademark Procedures

Trademarks, service marks, certification marks and collective marks may be registered. Well- known marks are also protected. The trademark application process takes roughly 10-15 months, but can take up to 12-18 months from the date of application filing. As in other countries, protection starts on the application filing date. The term of protection is 10 years

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and can be renewed for another 10 years indefinitely, so long as the owner of the trademark still exercises his/her right to renew within the terms prescribed by the law.

The mark of an application that is found to meet all the distinct properties and registration criteria will be published in the Trademark Gazette for 90 days. If there is no objection, the mark is granted registration.

The primary problem reported to cause delays in the trademark procedures was an insufficient number of examiners. With only 18 trademark examiners in 2010, each examiner faced 2,092 applications per year. This is over 800 applications more than the average in 2001, when there were 21 examiners.

Incomplete or poorly prepared applications were the second most common cause of delay. In many cases, marks were not sufficiently distinctive from existing trademarks. Applicants also often failed to comply with the registration instructions.

Other less common problems were insufficient search tools and computer hardware and internet problems.

Currently, a newly drafted law to improve the DIP’s trademark capabilities awaits endorsement by the Parliament. Beyond reducing the trademark publication period from 90 to 60 days, the amendment would clear the way for the registration of certain non- conventional trademarks including scent and sound marks.135

Automation and Information Technology

The Department of Intellectual Property has begun the development of an IP information technology system (Phase II) to provide information and registration through the Internet. Patent examiners at the DIP utilize many search databases, including JPO (Japan), KIPO (Korea), EPO, USPTO, SIPO (China), WIPO, Australia and Germany, as well as its internal database. Applicants can search patent information online at http://patentsearch.moc.go.th free of charge. The search results show patent data including an abstract and drawing. Moreover, applicants can purchase a Thai gazette CD-ROM with patent information from November 2006 to present for 250 Baht from the DIP.

Trademark applications can now be filed online at www.ipthailand.org. The online system allows applicants to fill and submit an online form as well as attach the trademark files they want to register. The system allows two methods of fee payment: online via United Overseas Bank (UOB) (Thai) and via a UOB counter. The applicant can register, pay the fee, check the application status and search the trademark database.

In terms of hardware, each of the DIP’s 450 staffers has a computer work station typically equipped with an Intel Core 2 Duo processor, the office is supported by 50 servers. The internet bandwidth is fast and stable with the capacity of a 10 Gbps fiber optic network.

The internal database at the DIP needs a major transformation. In the past, the DIP outsourced its database system creation and maintenance to IT companies. Each project must be finished within one year. Problems often occur due to insufficient budgets, inadequate

135 Expert interview

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time (one year), and the poor quality of work provided by outsourced firms. The office is currently working with local universities to improve in-house patent search processes. Presently, WIPO has agreed to help install the Industrial Property Automation System (IPAS) system (version IPAS Java) in order to modernize IP services toward a paperless system. It is projected that the system will be complete in 2014. Additionally, DIP receives the two-year free trial of EPOQUENet from EPO; however, the office reports that examiners require training from the EPO if they are to effectively employ this complicated system.

Chart 27 Trademark Procedure

Filing of Application

Preliminary Examination

Substantive Examination

Voluntary Correction of Registration Rejection Agreement Application Order Order

Agreement Failed Appeal to the Agreement No (Registering Firstly Commission Successful Appeal Filed Application (within 90 days)

Publication Opposition Appeal ( 90 days) Appeal Successful dismissed

No counter- Counter- statement statement (within 90 days) Discharging the Application Registrar's No Decisions Opposition

No Appeal to the Appeal Commission (within 90 days)

Judicial Review (within 90 days)

Discharging the Registration Application Source: Annual Report 2009, Department of Intellectual Property, Ministry of Commerce of Thailand

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Enforcement and Dispute Settlement

The main IPR enforcing bodies in Thailand are the Central Intellectual Property and International Trade Court (CIPITC), the Royal Thai Police (Economic and Technological Crime Suppression Division, Central Investigation Bureau; Metropolitan Police Bureau; and Provincial Police Bureaus 1-9), and the Department of Special Investigation (DSI). Further, the Department of Intellectual Property (DIP) itself has a responsibility to implement relevant laws of enforcement, and cooperate with other organizations on the oversight of IPR enforcement.

Thailand has created a number of entities to deal specifically with IP enforcement. The Headquarters for Economic Investigations and Inquiries was established in 1992. To prepare the courts for impending legal disputes, an Intellectual Property and International Trade Court was instituted in 1997, followed in 1999 by the Office of Intellectual Property and International Trade Litigation. In 2002, the Special Investigation Department was established to handle the unique challenges of IPR enforcement. In January 2009, the Commission on Intellectual Property Infringement Prevention and Suppression was established with the duties of formulating policies and strategies on the prevention and suppression of IP infringement, and of directing, inspecting and monitoring work performance of governmental agencies and related bodies. The name of the commission was later changed to the National Intellectual Property Policy Commission.136

Following the DIP’s establishment of the Prevention and Settlement of Intellectual Property Disputes Office in 2002, many disputes have been referred to the Office for Mediation and Arbitration. During the period October 2009- September 2010, 41 IP disputes were successfully mediated by the office, and the office has successfully settled more than 300 disputes since its establishment.137 About 98% of IP disputes were settled by mediation. This is because mediation is a simple process without the involvement of an arbitrator or the courts, and is therefore typically less expensive. It is important that the office recruit a separate staff to handle these mediation hearings, so as not to take already limited work time away from examiners.

A criminal action in a trademark case can lead to penalty fines from THB 200,000 to THB 400,000 and/or imprisonment of two to four years. The penalty fines are similar in the case of patent infringement, but imprisonment can be from six months to two years.

Recommendations

1. A ministerial order is required to allow PCT applications to submit an application first in the original language in the national phase so as to meet the deadline, and then later submit the translated application in the Thai language.

2. It is clear that the number of examiners is too few for Thailand’s workload, and efforts should be made to recruit additional patent examination staff. However, the DIP head counts, like all other governmental agencies, have been frozen by the Office

136 Department of Intellectual Property, Annual Report 2009, 61. 137 Department of Intellectual Property, Annual Report 2010, 70.

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of Civil Service Commission, and its budget controlled by the government. Its staff salaries must comply with the government employee scale. These factors make it difficult for the DIP to increase the number of examiners and attract highly qualified candidates. It is recommended that the DIP become an autonomous body in order to solve the significant backlog problem.

3. The training of the examining staff should be strengthened. Language training should also be provided to examiners in order to speed up examinations, and also to allow examiners to cultivate knowledge from training programs provided by English- speaking experts. Moreover, there should be trainings that allow examiners to gain knowledge about leading technologies in each field.

4. Clear instruction manuals for each search tool are needed to help examiners in the search and examination process. A well drafted patent application model should be utilized to help applicants in drafting applications.

5. Streamlined, technical assistance from the major IP offices, including information sharing on office-relevant best practices, interactive on-site learning (i.e. examiner training by EPO representatives at the DIP office), and tailor-made IT and database solutions. Furthermore, the office suggested that the USPTO and EPO should shift their Southeast Asian focus, away from demanding enforcement and toward enhancing administrative capability.

6. University-office collaboration is essential for furthering Thailand’s innovation capacity. The DIP should provide IP awareness training and education, and guidance in an IP manual for university researchers, while clarifying and simplifying application requirements, in order to encourage and enable professors to file more, and better, patent applications.

7. Communication between the office and university and private sector stakeholders would allow for a productive, multidisciplinary approach to discovering and responding to constant technological changes.

8. An IP curriculum developed by universities in collaboration with the DIP will increase local IP awareness.

9. Process improvements should be addressed within the DIP to ensure optimal efficiency. For example, after a paper application is filed at the front desk of the DIP, it is transported to a secretarial desk where it must be manually transposed into electronic form, increasing chances for error while allocating limited time and resources on this superfluous worker – the office should consider streamlining this process.

10. The office should draft a revised application review handbook of standardized technical language and formatting requirements, clearly outlining all regulations in detail. These regulations should be consistently adhered to by examiners, and made available to applicants to assist them in preparing their IP applications. This measure would result in a more accurate and efficient application review process.

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IX. VIETNAM

Overview

Vietnam is undergoing a rapid economic transformation, becoming increasingly market- oriented. The country’s induction into the WTO in 2007 has encouraged strong annual growth in international trade and foreign direct investment (FDI) activities as well as indigenous entrepreneurship. Vietnam felt the impact of the global economic crisis in 2009, but the country recovered quickly in 2010.

Vietnam’s GDP in 2010 amounted to USD 278.1 billion or about USD 3,100 per capita when adjusted for purchasing power parity. Vietnam’s real growth in 2010 was 6.8% and inflation was 11.1%. Contributions to GDP by sector were 20.5% from agriculture, 40.2% from industry and 39.2% from services. In 2010, FDI was approximately at USD 60 billion. Economic activities related to FDI directly employ hundreds of thousands of skilled and experienced workers.

Vietnam had an overall negative trade balance in 2010, with exports worth USD 70.76 billion and imports worth USD 81.73 billion. Vietnam’s major import sources were China (16.42%), Singapore (9.61%) and Japan (8.96%), whereas the largest recipient of Vietnamese exports was the United States. Leading exports are crude oil, marine products, rice, coffee, rubber, tea, garments and footwear. Key imports include machinery and equipment, petroleum products, fertilizer, steel products, raw cotton, grain, cement and motorcycles.138

According to Benoit Battistelli, president of the European Patent Office, “Vietnam is a typical example of dynamic development in the ASEAN region. IP has risen as an economic tool. Vietnam’s recent experience shows that patents are an effective tool for encouraging innovation and enhancing competition and economic development.”139 There is no doubt that activities dependent on the protection of IP will play an important role in Vietnam’s economic future.

Legal Framework

Vietnam has ratified many of the major international IP treaties, including the Berne and Paris Conventions, WIPO Convention, PCT, Geneva Convention, Rome Convention, Brussels Convention, Madrid Agreement and Madrid Protocol. Vietnam joined the WTO in 2006.

Vietnam’s legal system uses the 1995 Civil Code, amended in 2005. Vietnam’s current IP Law was issued in 2005 and amended in 2009 to improve the IP system and to comply with TRIPS. In addition, there are several Governmental decrees and Ministerial circulars guiding the implementation of IP provisions of the Civil Code and the IP Law.

138 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/vm.html (accessed February 14, 2011). 139 “Ha Noi Talks about Patent Protection,” Vietnam news, January 13, 2011, http://www.dztimes.net/post/business/ha-noi-talks-about-patent-protection.aspx (accessed February 14, 2011).

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As of 2010-2011, Vietnam is in the process of constructing a national IP strategy plan to build a more standardized law that supports IP rights and creations. Also, there are several draft decrees and directives pending approval in 2011.

Intellectual Property Office

The Intellectual Property Office of Vietnam was created by decree in 1982, and has been developed in successive steps since that time. In January 1982, the State Committee promulgated Decree No. 125/HDBT on the organization of the State Committee for Science and Technology, which declared the establishment of the National Office of Invention – the predecessor of the National Office of Industrial Property - now referred to as the National Office of Intellectual Property (NOIP).

NOIP is subordinate to the Ministry of Science and Technology (MOST). The Director- General and the Deputies Director-General of the NOIP are appointed by the Minister to serve five-year terms. The Director-General then appoints the heads of divisions and bodies within NOIP. The NOIP organization comprises 19 divisions including two branch offices in Ho Chi Minh City and Da Nang. (

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Chart 28)

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Chart 28 Organization Chart of the NOIP

Director General TA QUANG MINH

Deputy Director Deputy Director Deputy Director General General General HOANG VAN TAN PHAM PHI ANH TRAN HUU NAM

General Legislation and Invention Division Trademark Division Administrative Policy Division No. 1 No. 1 Office

International Registration Division Invention Division Trademark Division Cooperation Division No. 2 No. 2

Organizational Industrial Design Invention Division Geographical and Personnel Division No. 3 Indication Division Division

Enforcement and IP Information Appeal Division Centre

Supporting and IT Division Consulting Centre

Research and Training Centre

Branch Office in Ho Chi Minh City

Branch Office in Da Nang City

Source: NOIP

NOIP is a semi-autonomous organization. Of the entire application fee, 85% is collected by the office whereas 15% is sent back to the government. The Ministry of Science and Technology provides additional funding to the office.

Under various frameworks of bilateral and multilateral cooperation, Vietnam received many training courses for NOIP officials. For example, with assistance from WIPO, EPO, USPTO, JPO, SIPO and KIPO, NOIP was able to organize trainings on patent and trademark search and examination for more than 100 staff members in 2010.140 Two academic institutions, in

140 National Office of Intellectual Property of Vietnam, Intellectual Property Activities – Annual Report 2010, p.19.

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Hanoi and Ho Chi Minh, and supported by NOIP’s expertise, provide patent agent training courses lasting six months at a fee of USD 200.

The total number of staff increased from 253 in 2008 and 2009, to 294 in 2010. The year 2010 alone marked a sizeable change in the number of NOIP staff, with 41 staff added to the office, a 16.2% increase from the previous year. About half of those were new patent and trademark examiners. Of the NOIP’s total staff, 53 were patent examiners and 63 were trademark examiners.

An examiner’s salary is not competitive compared to the private sector. The range for patent and trademark examiners’ salary is between USD 300 –1,000. However, there is an incentive for examiners called the “point system.” The target point for each examiner is determined to be one point per month. The point is determined by each examiner’s activities. For example, if the examiner conducts the formality examination, the examiner will receive 0.1 points. If the examiner does not reach the target, his salary will be decreased. (Vietnam examiners receive two types of salary. The first is the government salary that cannot be changed unless permitted by the government. This amounts to one-third of the whole salary. The other part is the additional, adjustable salary from the NOIP.)

Table 64 Type and Number of Staff in the NOIP Number Type of personnel 2008 2009 2010 General Administrative Office 31 31 34 International Cooperation Division 10 11 11 Legislation and Policy Division 15 12 12 Invention Division 1, 2, and 3 45 44 56 Trademark Division 1 and 2 54 56 59 Industrial Design Division 11 11 12 Geographical Indication Division 5 7 13 Registration Division 29 31 32 Enforcement and Appeal Division 5 5 7 Organizational and Personnel Division 3 3 3 IT Division 13 12 19 IP Information Centre 17 15 17 Branch Office in Ho Chi Minh City 9 9 11 Branch Office in Da Nang City 6 6 6 Total 253 253 29 *Patent examiners (excluding preliminary 41 41 53 assistant examiners) *Trademark examiners (excluding preliminary - 52 54 63 assistant examiners) Source: NOIP

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All of the patent examiners at the NOIP possess a science degree, 73.6% bachelor, 20.8% master and 5.7% doctoral. Most of the examiners (67.9%) have less than five years of experience, whereas 28.3% have more than 10 years of experience. (Table 65 and Table 66)

Most of the trademark examiners, 65.1%, have a non-science degree. Nearly all possess a bachelor’s degree. About 28.6% of the trademark examiners have 5-10 years of experience, and 23.8% have more than 10 years, whereas 47.6% have less than five years. (Table 65 and Table 66)

Table 65 Number of Examiners by Educational Profile Degree

Bachelor Master Doctoral Office Non- Non- Non- Science Science Science science science science Patent 39 - 11 - 3 - examiners Trademark 22 36 - 5 - - examiners

Source: NOIP

Table 66 Number of Examiners by Years of Experience Less than 5 More than 20 Office 5-10 years 10-15 years 15-20 years years years

Patent 36 2 9 1 5 examiners Trademark 30 18 5 2 8 examiners

Source: NOIP

Patent Applications

Table 67 reflects recent growth in resident applications. Foreign applications have always made up more than 90% of the total patent applications. The trend for foreign applications as a percentage of total applications, however, is downward. In 2010, foreign applications accounted for only 91.4%, compared to 96% in 2001. This being said, more than 96% of total patents granted are foreign patents, and there has yet to be any major increase in the number of domestic patents granted.

Unlike other ASEAN countries, the number of patent applications far outnumbered that of the utility model applications. (Table 68) From 2005-2010, taking into account refused and withdrawn applications, an average of 11.19% of the applications were pending.

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Table 67 Applications and Granted Patents (2001 – 2010)

Patent Applications in Vietnam

Application Granted Year Vietnam Foreign Total Vietnam Foreign Total 2001 52 1,234 1,286 7 776 783 2002 69 1,142 1,211 9 734 743 2003 78 1,072 1,150 17 757 774 2004 103 1,328 1,431 22 676 698 2005 180 1,767 1,947 27 641 668 2006 196 1,970 2,166 44 625 669 2007 219 2,641 2,860 34 691 725 2008 204 2,995 3,199 39 627 666 2009 258 2,632 2,890 29 677 706 2010 306 3,276 3,582 29 793 822 Total 1,665 20,057 21,722 257 6,997 7,254 Source: NOIP and Annual Report 2009, 26-28.

Table 68 Applications and Granted Utility Solutions (2001 – 2010)

Utility Solutions Applications in Vietnam Application Granted Year Vietnam Foreign Total Vietnam Foreign Total 2001 35 47 82 17 9 26 2002 67 64 131 21 26 47 2003 76 51 127 28 27 55 2004 103 62 165 44 25 69 2005 182 66 248 41 33 74 2006 160 76 236 45 25 70 2007 120 100 220 49 36 85 2008 116 168 284 48 27 75 2009 133 120 253 45 19 64 2010 215 84 299 35 23 58 Total 1,207 838 2,045 373 250 623 Source: NOIP and Annual Report 2009, pp.29-30.

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Chart 29 Top Five Countries for Patent and Utility Solution Applications in 2010

1,000 800 600 400 200 0 USA Japan Vietnam Germany Taiwan

Source: Annual Report 2010, 46.

As shown in

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Chart 29, the largest sources of applications in 2010 were the United States (832 applications), Japan (823 applications), and Vietnam (521 applications).

Patent Procedures

The patent procedure in Vietnam is similar to procedures in other ASEAN countries. The first stage entails filing the Vietnamese language application with the National Office of Intellectual Property of Vietnam (NOIP), or with one of its twobranch offices. The second stage is a formality examination that is supposed to take place within one month of the filing date. After it is accepted, the application is published in the Official Industrial Property Gazette Volume A, within 19-20 months from the filing date. The PCT application is supposed to be published within two months of the acceptance date.

Subsequently, an applicant or a third party must file a request and pay a fee for the substantive examination within 42 months of the filing date for invention patents, and 36 months for utility solutions. This examination will take place approximately 9-18 months after the request date. If an applicant does not request the examination within the time limit, the application will be withdrawn. In this stage, examiners can refer to the examination results issued by EPO, USPTO, JPO, and etc. to expedite the process. As there are no guidelines for patent examinations stated in the IP law, the examinations differ between patent examiners. If the application is granted, the granted patent is published in the Official Industrial Property Gazette Volume B, and is recorded in the National Register of Inventions. If the application is refused, the applicant can appeal for amendments within two months of the date of refusal.141

In 2010, there were 53 patent examiners handling 3,666 patent applications, including utility solution applications. Therefore, each staff person worked on an average of 69 applications per year, a decrease of 23.2% from 2008 as a result of the additional 12 patent examiners. (Table 69)

The process for patent applications begins when the receiving division forwards the application to the patent division, at which point the Director distributes the specific application to an examiner with related knowledge and experience. After examination, the application will be returned to the registration division. The whole patent procedure usually takes approximately 24-36 months. Unfortunately, there may be delays caused by late examinations or late requests from applicants themselves.142 Some applications are not filed through PCT; this extends examination time in the national phase.

Table 69 Number of Applications per Patent Examiner 2008 2009 2010 No. of Applications 3,483 3,143 3,666 Patent Examiners 41 41 53

141 National Office of Intellectual Property of Vietnam, “Patent Examination Procedure,” http://www.noip.gov.vn/web/noip/home/en?proxyUrl=/noip/cms_en.nsf/(agntDisplayContent)?OpenAgent&UN ID=56102697F6E208DD4725767B001FE339 (accessed February 17, 2011). 142 Expert opinion

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Application/Examiner 85 77 69 Source: calculation using the data from NOIP. Number of applications includes both patent and utility model applications.

The human resource problem that is most challenging to NOIP is the number of patent examiners and their lack of experience. Reportedly, a lack of experienced examiners is the most important factor leading to delays in the patent procedure. Despite the fact that all the examiners have a degree in science, most of the patent examiners still have relatively few years of experience; 67.9% have less than five years. It is important that staff competency be improved. Examiners often leave the division to become patent attorneys, are promoted to higher positions, or rotate to other divisions. As the government inhibits NOIP from raising examiners’ salaries, numerous trainings, especially technical exercises on formality and substantive examinations, are required to improve new examiners’ knowledge and skills.

Government-restricted salaries also inhibit NOIP from recruiting highly-trained English speakers; consequently, the English language is another key problem, especially for the examiners. Insufficient search tools and an inadequate Internet system further cause delays in the patent procedure. More search tools and databases are needed.

Beyond these office dilemmas, poorly written and incomplete applications also serve to slow the application review process. Even if the applications are prepared or translated by patent attorneys, these agents may have insufficient knowledge of English, Vietnamese, or both.

NOIP’s adoption of the standard language of formed paragraphs for application processing is a positive step toward increased office efficiency. In order to expedite the patent application process, public communication on IP application procedures should be improved to create public awareness on IP as well as the patent filing procedure. More training for patent agents, which are currently available through NOIP for around USD 50 and consulting and support services for applicants, should be provided. NOIP might utilize its Information Center as the contact point for clients seeking consultations and support on IP filing procedures before submitting patent applications.

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Chart 30 Patent procedures FILING

Amended Non-Amendment Application Formal Request for Examination deems as Applications have Amendment withdrawn the deficiency Un-Appeal against

Appeal Appeal Notice of NOIP Most Valid Against Against Un-Valid Refusal of

Application (level2) Application Acceptation of Application Appeal Court

Publication of Accept of Valid

Application Application No Request for Application deems Substantive as withdrawn Examination Request for Amended Substantive Examination

Application Non-Amendment Application deems Substantive Needs Request for Examination Amendment Amendment as withdrawn

Fails to

Appeal Notice of Appeal Satisfy the Against Refusal of Against NOIP Most Protection (level2) Criteria Granting the

Criteria Satisfy the Protection Patent Appeal Court

Request for Decide for Granting the Payment of Fees Patent for Invention Application deems Non Payment of Fees as withdrawn

Grant of Patent Publication of Patent for Invention, Register for Invention

Source : Integrated from Triviet Lawyers & Attorneys143

Trademark Applications

The number of trademark applications in Vietnam has been rising, with domestic applications contributing more than 75.9% in 2010, compared to 59.2% in 2000. The same is true for the

143 Triviet Lawyers & Attorneys, http://www.trivietlaw.com.vn/webplus/viewer.print.asp?aid=46&l=EN (accessed February 17, 2011).

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number of registrations, where domestic trademark registrations accounted for 74.5% of the total in 2010, much higher than the percentage in 2000, at only 49.5%. (Table 70)

The three main countries submitting trademark applications in 2010 were Vietnam (21,204 applications), USA (1,579 applications) and Korea (1,143 applications).144

Table 70 Number of applications by type (foreign and domestic) from 2000 onward

Year Application Registration Domestic Foreign Total Domestic Foreign Total 2000 3,483 2,399 5,882 1,423 1,453 2,876 2001 3,095 3,250 6,345 2,085 1,554 3,639 2002 6,560 2,258 8,818 3,386 1,814 5,200 2003 8,599 3,536 12,135 4,907 2,243 7,150 2004 10,641 4,275 14,916 5,444 2,156 7,600 2005 12,884 5,134 18,018 6,427 3,333 9,760 2006 16,071 6,987 23,058 2,505 6,335 8,840 2007 19,653 7,457 27,110 10,660 5,200 15,860 2008 20,831 6,882 27,713 15,826 7,464 23,290 2009 22,378 6,299 28,677 16,231 6,499 22,730 2010 21,204 6,719 27,923 12,313 4,207 16,520 Total 145,399 55,196 200,595 81,207 42,258 123,465 Source: NOIP Annual Report 2010

Trademark Procedure

Trademarks, service marks, collective marks and three-dimensional marks may be registered and protected for ten years. The trademark procedure in Vietnam takes approximately 15-18 months.

Trademark applications can be filed at the NOIP office and at either of its branch offices in Ho Chi Minh City and Da Nang. Since Vietnam is party to the Madrid Agreement and the Madrid Protocol, trademark applications can be filed as an international application with the International Bureau of the World Intellectual Property Organization (WIPO).

Currently, a reviewed trademark application must be signed by three different people, including the head of the office. If the director is away, a backlog of applications will necessarily ensue. The current policy should be amended to allow for more flexibility in the approval process in order to decrease applicants’ waiting times.

Vietnam has adopted the first-to-file system, giving priority to the earliest filed complete application. Well known marks are protected in Vietnam against signs that are likely to cause confusion in the relevant public sector, regardless of whether or not the mark is registered.

144 National Office of Intellectual Property of Vietnam, Intellectual Property Activities – Annual Report 2010, p.53.

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Under the civil procedures or by a recognition decision of the NOIP, such well-known marks are recorded in NOIP’s well-known mark list.

In 2010, the average number of trademark applications per staff was 443, with 27,923 applications and 63 examiners, a 16.7% improvement in the number of examiners over the previous year. (Table 71)

Table 71 Number of Applications per Trademark Examiner 2008 2009 2010 No. of Application 27,713 28,677 27,923 Trademark Examiners 52 54 63 Application/Examiner 533 531 443 Source: K.I.Asia calculation using the data from NOIP

Delays in the trademark application procedure have been due to a shortage of examiners, incomplete or poorly prepared applications, and inadequate search tools. Although the number of applications per trademark examiner was improved after the addition of nine new examiners in 2010, most of the examiners still have relatively few years of experience and need further training. (Table 66) Due to the lack of trademark examiners, existing examiners must take longer than the prescribed time to conduct each examination. Therefore, it is recommended that trademark applicants conduct their own trademark searches before filing.

Additionally, examiners have suffered from inconsistency in classifying goods and services and in assessing the registrability and availability of an applied trademark. Even though most countries use the International Classification 9th Edition (the Nice Classification), each country follows different criteria when implementing the classification. As a result, a list of goods and services that is accepted in one country may be refused in other countries. This has caused some mark registrations to be invalidated.145 In order to alleviate these problems, applicants should conduct pre-filing trademark searches through NOIP’s online and offline databases. Applicants and their agencies need to keep track of their application process and follow up with responsible examiners on the status of their application.

145 Expert Opinion

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Chart 31 Vietna ’s Trade arks Registration Pro ed re

1 month Filing Amendment

Request for Formality Application No amendment is Examination having defects Amendment made or satisfied

2 months

Application

undue form undue

is made is in

3 months st nd

Refusal of 1 NOIP 2 MOST Application Appeal Appeal

Acceptance of

Application Court

1 month Acceptance of Application Publication of Application 2 months Amendment

Substantive Application needs to Examination be amended Request for Written No response is

Opinion made or satisfied

protectionare

protectionare met Criteriafor

not met not 2 months

Criteriafor

months st nd Refusal of 1 NOIP 2 MOST

12 Application Appeal Appeal

Notice of Court

Allowance Acceptance of Granting

Payment of Fee of 1 month Fee is

unpaid Application is abandoned

1 month Grant of a Publication TM of Registered Applicant NOIP Other Authority Registration 2 months TM NOIP: National Office of Intellectual Property MOST: Ministry of Science and Technology

Source : Integrated from D&N International146 Note: Comparable to the chart from the official NOIP

146 D&N International, http://dnlaw.com.vn/index.php?f=ipresource&do=categories&id=6 (accessed February 17, 2011).

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Automation and Information Technology

The NOIP office now has 300 computers, some of which are PCs with Core 2 Duo processors; the rest are laptops with Dual Core processors, all running off of 20 servers. Available internet connections include a leased line of 15 Mbps and 2 ADSL connections with speeds of 1000 Mbps and 45 Mbps, respectively.

NOIP patent documents are primarily stored in CD-ROM and DVD formats to facilitate searches by patent examiners. NOIP has around 34 million documents in CDs, DVDs, and over 6,000 patent optical disks from Japan, the United States, EU, etc. in storage. Examiners can also perform a search through the Internet. However, because of the instability of the network connection, examiners mainly use information from optical disks.

Additionally, under NOIP’s Intellectual Property Information Center, there exists the IP Digital Library (IPDL), which collects information on published IP applications and granted patents, industrial designs and trademarks. The information shows the bibliographies (including abstracts) of pending and granted Vietnamese patent applications, and can be searched electronically. Users can also find information on Vietnamese IP via links to IPDLs in other countries such as Japan, Australia, Korea, the United States, Europe and WIPO. This digital library system, completed in 2009, was created with assistance from Japan under the Japan-Vietnam Cooperation Project for Utilization of Intellectual Property Information in Vietnam.147

Nevertheless, domestic patent and trademark databases are limited. Some domestic prior art is not available in electronic format, as the database is neither regularly nor fully updated.

Other search tools include an Internal Database, Esp@cenet (developed by the European Patent Office), IPDL, USPTO, PATENTSCOPE® and ROMARIN. Though the office desires the support of commercial database systems, it is concerned, much like its neighboring offices, over the high costs of such systems.

Enforcement and Dispute Settlement

Many government authorities are involved in IP enforcement, including the Ministry of Trade (Market Management Authority), the Ministry of Science and Technology (MOST) (Specialized Inspectorate), the Ministry of Culture, Information, Sport and Tourism (Specialized Inspectorate), the Ministry of Public Security (Economic Police), the Ministry of Finance (Customs Offices) and the People’s Courts. The Specialized Inspectorate of MOST is the main authority handling all infringement cases.148 The role of NOIP in enforcing the law is to coordinate with relevant authorities in conducting the state management of,

147 National Office of Intellectual Property of Vietnam, “Japan Assists Vietnam in the Field of Property,” http://www.noip.gov.vn/web/noip/home/en?proxyUrl=/noip/cms_en.nsf/(agntDisplayContent)?OpenAgent&UN ID=89915C81C41D0F3F4725767B00058568 (accessed February17, 2011). 148 Rouse, “Alert 379 - Vietnam - New Decree on Administrative Enforcement Clarifies and Strengthens Vietnam's IP Regime,” http://www.iprights.com/content.output/1003/1003/Resources/Alerts/Alert%20379%20- %20Vietnam%20- %20new%20decree%20on%20administrative%20enforcement%20clarifies%20and%20strengthens%20Vietna m's%20IP%20regime.mspx (accessed February 13, 2011).

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protecting, supervising, inspecting and handling infringements of IPR. The Enforcement and Appeal Division of NOIP is in charge of handling appeals and opposition to the NOIP’s decisions.

The NOIP also plays an important role as a state management agency in dealing with IP disputes. If there is an appeal on the NOIP’s decision relating to IPR establishment within the time limit, the NOIP must settle the appeal in accordance with the provisions of the law on complaints. In case of a dispute between an IPR holder and third parties, if the holder files to accuse a third party of infringing their IP rights, the NOIP will, in cooperation with relevant authorities, supervise, inspect and handle the infringement. The NOIP will then serve as a professional IP office, advising and deciding whether or not the third party has violated the right of the IPR holder. NOIP also advises the courts in IP disputes. In practice, NOIP works with these departments by preparing and disseminating the national policies and regulations on IPR enforcement.149

Vietnam has issued a number of decrees and circulars reviewing the proper protocol for enforcement of IPR. Essentially, there are three ways in which IPR may be enforced; through administrative action, civil action (or litigation) or criminal prosecution. However, there is no specific court for IP. A study found that administrative procedures were the most effective and popular method in suppressing an IPR infringement, while civil action is used in only a few cases.150 This is due to the fact that Vietnamese courts still lack enough officials well trained in IP law.

In 2009, some articles on IPR infringement in the Criminal Code were amended to fulfill international commitments and to improve the feasibility of legal provisions on IPR enforcement by criminal measures.

The main practitioners of these IP laws are at different levels of the courts and administrative agencies. Divided by areas, the Court and its governing bodies span the following:

 District Courts with judges specialized in civil, economic, criminal and labor matters  Provincial Courts (specialized courts: civil, economy, criminal, administrative, labor)  Appeal Courts (Hanoi, Ho Chi Minh City, Da Nang City)  Supreme People’s Court

Agencies responsible for administrative procedures against infringement are:  The Customs  The Market Control Organization  The Economic Police  The Specialized Inspectorate (of Science and Technology and of Culture, Information, Sport and Tourism)  The People Committees at provincial and district levels

Administrative penalties for violators of IPR may include a fine, revocation of a business license, and forced removal of offending elements from products (depending on the essence

149 The ASEAN Project on the Protection of Intellectual Property Rights (ECAP III), http://www.ecap- project.org/archive/archive/how_to_enforce_your_ipr/vietnam.html (accessed February 17, 2011). 150 Ibid.

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and extent of the violation). The offender may be subject to confiscation of material, evidences, and implements used for the infringement. The offender will pay the amount of actual damages, not to exceed VND 500 million. If the value of the goods cannot be calculated, the offender will pay no more than VND 90 million.

In the civil court, IPR are treated as civil rights akin to the ownership of tangible property. Thus, holders of IPR may demand the court to force a person who violates ownership rights to cease such violations, pay compensation for any damages, and fulfill other civil responsibilities.

Recommendations

1. There is a need for better examination methodology guidelines for patent and trademark examiners. Regular reviews of the examination process are also recommended.

2. Human resources development, especially trainings for patent and trademark examiners regarding the IP process, IP Law, technical knowledge and innovations management, is necessary to improve the IP staff’s competency, to accelerate the IP process, and to increase the reliability of IP standards.

3. Even though the number of computers and servers in NOIP’s offices are sufficient to maintain the operation, feedback from IP officials indicates that the bandwidth and speed are not satisfactory; consequently, the Internet connection should be improved.

4. Apart from the Internet connection, NOIP’s storage system should not rely solely on compact digital disks since several factors might damage those disks. The Office should develop a complete electronic database.

5. Initiatives to strengthen cooperation with relevant local authorities, as well as regional and international IP organizations, should be stepped up.

6. NOIP should consider amending its policy on trademark application sign-off, which currently requires three signatures, to allow for more flexibility in the approval process and, thus, decrease applicant wait times.

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X. PEOPLE’S REPUBLIC OF CHINA

Overview

With a population of 1.3 billion and a fast-growing economy, China has become a major user and producer of IP. China’s GDP was about USD 9.87 trillion in 2010 and USD 8.95 trillion in 2009, making it the third largest economy in the world after the European Union and United States of America (USD 14.89 trillion and USD 14.72 trillion, respectively). Per capita GDP was about USD 7,400, adjusted for purchasing power parity. The main components of China’s economy are industry (46.8%) and services (43.6%), while the agricultural sector accounted for only 9.6%. In 2010, China saw a growth 10.3%, increasing from 9.1% in 2009. Of particular importance for IP is the fact that China has some 650,000 scientists working in research, and is producing about 300,000 graduates per year in science, technology, engineering and mathematics.151 In the past 20 years, Chinese spending on research has grown at nearly 20% per year and the theme of the government’s national science and technology plan for 2006-2020 is “indigenous innovation.”152 China’s share of the world’s published scientific articles has risen from 0.2% in 1998 to 7.4% in 2006, when it overtook Japan.153 Although quality concerns remain, it is clear that China is becoming an increasingly important producer of IP.

As a major manufacturing center, companies in China, both foreign and domestic, also depend on foreign innovations. Foreign companies, in particular, produce patented products and use international trademarks. In 2010, the stock of foreign direct investment in China was USD 574.3 billion, increasing 20% from 2009. Exports were approximately USD 1.51 trillion and imports were at USD 1.31 trillion, leading to a positive current account balance in 2010. China’s key export destinations were the United States (20% of exports), Hong Kong (12%), and Japan (8.3%). The largest sources of imports were Japan, at 12.3% of all imports, followed by Hong Kong at 10%, and South Korea at 9%. Some 85% of China’s exports were manufactured goods and the majority of its imports consisted of electrical products and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics and organic chemicals.154

Legal Framework

Since China began transforming its economic policy in 1979, the Chinese government has realized the importance of protecting IP rights and thus has actively participated in international cooperation programs to promote domestic innovation. China is now party to IP treaties including the Paris and Berne Conventions, the PCT, the Madrid Protocol, UPOV, the Budapest Treaty, the Locarno Agreement and the TRIPS Agreement as a WTO member.

151 Debbie Andalo, http://www.guardian.co.uk, March 15, 2006 152 Declan Butler, Nature News http://www.nature.com/news/2008/080723/full/454382a.html 153 Ibid. 154 Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html (accessed on March 1, 2011).

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The Patent Law of the People’s Republic of China was promulgated in 1984. It was amended in 1992, and again in 2001 when it became compliant with the TRIPS Agreement and brought into line with international standards. The latest amendment of the patent law came into effect in 2009. This amendment clarified the law and enforcement of judicial and administrative decisions. These amendments made the following adjustments:

 The patent law no longer requires first filing in China. Patent applicants can now file applications abroad. However, the applicant must undergo a ‘security review’ by the State Intellectual Property Office (SIPO) before filing overseas. This security review is intended to protect China’s national security interests.

 Another significant change is permission for double filing. The new law allows applicants to submit both a patent application and a utility model application for the same invention on the same day. If one of these is granted, the other will be abandoned, as the law permits only one patent per invention. Double filing can be an advantage to owners as they can secure protection for utility models before an invention patent is granted.155 Double filing, however, is not an option with PCT applications.156

 The new law introduces a new disclosure requirement for inventions made from genetic resources.157 Article 5 of the law states that “no patent right shall be granted for any invention-creation which is completed on the basis of genetic resources of which the acquisition or use breaches the stipulations of related laws and regulations.” This means the applicant must disclose the direct or original source of the genetic resources in the application, and must also verify the legal acquisition of such genetic resources.158

China’s trademark law was first adopted in 1982. The law was revised in 1993 and 2001 to cover collective marks, certification marks and three-dimensional symbols to comply with TRIPS. The Regulation for the Implementation of the Trademark Law of the People’s Republic of China went into effect on September 15, 2002. Rules for Trademark Review and Adjudication were promulgated in 1995 and revised in 2002 under Order No. 3 of the State Administration for Industry and Commerce (SAIC). In 2003, the SAIC issued additional measures and provisions, including the following:

1) Measures for the Implementation of International Registration of Marks under the Madrid Agreement; 2) Measures for the Registration and Administration of Collective Marks and Certification Marks; and 3) Provisions on the Determination and Protection of Well-known Marks.

155 Jeff Nelson and Ying Tuo, “Tips and Strategies for Prosecuting Patents in China,” April 2007, http://www.aipla.org/learningcenter/library/papers/roadshows/IPinChina/Documents/Nelson%20Paper.pdf (accessed on April 20, 2011). 156 Nick Redfearn, “China’s New Patent Law Will Require Double Filing, New Legal Review,” issue 28, May 14, 2010, http://www.cpaglobal.com/newlegalreview/4450 (accessed on March 8, 2011). 157 The Patent Law does not provide a definition of genetic resources. However, according to the Convention on Biological Diversity (CBD), genetic resources refer to any material of plants, animal and micro-organisms containing a genetic functional unit, and is of actual or potential value. 158 Wenting Cheng, “Third Revision of Patent Law in China (Part II),” October 1, 2009, http://www.ip- watch.org/weblog/2009/10/01/third-revision-of-patent-law-in-china-part-ii/ (accessed on March 8, 2011).

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With these additions, much of China’s legal framework on IP is considered modern and reflective of current international practices.

Intellectual Property Office

The State Intellectual Property Office (SIPO) is the Chinese patent office, reporting directly to the State Council. The main office is in Beijing, but there are regional branches in every province. SIPO comprises seven functional departments:

1. General Affairs Department 2. Legal Affairs Department 3. Protection and Coordination Department 4. International Cooperation Department 5. Patent Affairs Administration Department 6. Planning and Development Department 7. Human Resources Department

Also, there are local administrative authorities in 31 provincial governments that work primarily to resolve local patent disputes in cases of infringement. However, they are not involved in patent examination.159

SIPO has a dual role. First, SIPO is in charge of the coordination of IP policy vis-à-vis the international environment, and represents China in international organizations like WIPO and the WTO. Second, SIPO serves an operational function in the administration of patent rights, including patent examination and registration. SIPO is not responsible for granting patents in Hong Kong or Macao, which have their own patent offices. These offices, however, may still rely on SIPO for the administration of substantive examinations. When applying for a patent in Hong Kong or Macao it is necessary to apply in Beijing, or at the EU or UK Patent Offices, and request an extension to those territories.160

In 2009, SIPO employed 3,074 staff, 81% with master’s degrees and 12% with doctoral degrees. Of these, 2,050 are examiners, and 96% of new examiners hired this year graduated with master’s degrees or above. SIPO also plans to continue expanding its staff of examiners.161

The China Trademark Office (CTMO), a special body separate from SIPO, is administered by SAIC; nonetheless, SIPO maintains authority over policy issues related to trademarks. The Trademark Office is in charge of registration and administration of trademarks nationwide, according to the Trademark Law of the People’s Republic of China. Local administrative authorities for industry and commerce (AICs) supervise the use of trademarks and deal with infringements.

The Trademark Office consists of 16 divisions: General Affairs, Application Acceptance Division, Examination Divisions (five), International Registration Division, Opposition

159 The State Intellectual Property Office, http://www.sipo.gov.cn/sipo_English/about/Administration/200804/t20080416_380178.html (accessed on March 8, 2011). 160 http://www.ipd.gov.hk/eng/intellectual_property/patents/how_to_apply.htm 161 The State Intellectual Property Office, 2009 Annual Report, 48.

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Division (two), Archives Management Division, Modification and Renewal Division, Legal Affairs Division, Case-handling Advisory Division, Supervision Division and Computer Management Division. The Trademark Office had 210 staff in 2009, including 144 examiners.

Chart 32 Structure of China Trademark Office

State Administration for Industry and Commerce (SAIC)

Trademark Office (CTMO)

General Affairs Division Trademark Supervision and

Administration Division

Application Acceptance Division Trademark Information and Archives Management Division

International Registration Division Trademark Examination Quality Control Division Legal Affairs Division

Trademark Modification and Computer Management Division Renewal Division

Opposition Division (I-III) Geographical Indication Examination Division

Examination Division (I –VIII)

Integrated from China Trademark Office162

Patent Applications

The number of patent applications SIPO receives has risen steadily by about 20% per year since 2006. SIPO received 976,686 patent applications in 2009, and the number exceeded one million patent applications in 2010. Domestic applications have greatly outnumbered foreign applications every year, with the number of domestic applications eight times that of foreign applications in 2010. In 2010, the largest share of foreign applications came from Japan with

162 The State Intellectual Property Office, http://202.108.90.115/english/orgranization/structure.asp (access on March 11, 2011)

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approximately 33.9% of foreign applications, followed by the United States and Germany, with 25.34 and 10%, respectively.

163 Table 72 Applications and granted patents (2006 – 2010)

Patent Applications and Granted

Application Granted Year Domestic Foreign Total Domestic Foreign Total

2006 470,342 102,836 573,178 223,860 44,142 268,002

2007 586,734 107,419 694,153 301,632 50,150 351,782

2008 717,144 111,184 828,328 130,647 10,954 141,601

2009 877,611 99,075 976,686 234,282 15,419 249,701

2010 1,109,428 112,858 1,222,286 740,626 74,199 814,825

Total 3,761,259 533,372 4,294,631 1,631,047 194,864 1,825,911 Source: SIPO

As a designated PCT receiving office, SIPO received more than 8,000 PCT applications in 2009, while about 50,000 applications entered into China's national phase. Of these, 7,225 were in Chinese and 775 were in English. In 2009, SIPO received 99,075 foreign applications seeking registration in China. This means that PCT applications represent 8.07% of the total foreign applications in China. SIPO is also designated as an International Searching Authority (ISA) and an International Preliminary Examining Authority (IPEA). As such, SIPO performed 6,776 searches and 420 preliminary examinations in 2009.164

China’s international PCT patent filings increased approximately 56% in 2010, ranking the country fourth in the world on such filings, trailing only the United States, Japan and Germany. This rapid growth shows that Chinese companies are increasingly seeking patent protection aboard.165

163 For more details, please see the State Intellectual Property Office at http://www.sipo.gov.cn/sipo_English/statistics/ 164 The State Intellectual Property Office, 2009 Annual Report, 49. 165 China Patent Information Center, http://www.cnpat.com.cn/EnNews.aspx?NewsId=1338 (accessed on March 11, 2011).

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Chart 33 Ten leading countries filing patent applications in China

Number of patent application based on country in 2010

40000 30000 20000 10000 0

Source: SIPO

China categorizes patents into ‘services’ and ‘non-services’.166 Services are divided into four types:

1. Colleges and universities 2. Scientific research institutions 3. Enterprises 4. Organizations

The service types of domestic applications account for about 55% of total domestic applications. Of these, domestic patent applications from enterprises represented the highest number, at almost 400,000 applications. The Chinese enterprise applying for the highest number of patents was ZTE Corporation, the Chinese telecom equipment provider, which filed more than 5,500 applications in 2009, followed by Huawei Technologies, the telecom solutions provider. Sony Corporation, submitting the most applications of any foreign enterprise, filed around 2,000 applications in the same year.

Table 73 Distribution of domestic and foreign patent applications according to service and non-service in 2009

Domestic Foreign Types of Patents Service Non-service Total Service Non-service Total

Amount 483,051 394,560 877,611 95,231 3,844 99,075

Percentage 55.04 44.96 100 96.12 3.88 100 Source: the State Intellectual Property Office, 2009 Annual Report, p.35.

166 According to the EPO, a ‘service invention’ is an invention by an employee of a company made in execution of his tasks as opposed to a ‘non-service invention’ made by an individual inventor.

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Chart 34 Distribution of domestic patent applications according to service category in 2009

Scientific Research Service Institutions Organizations 4% 1% Colleges and Universities Enterprises 13% 82%

Source: 2009 SIPO Annual Report, p.37.

Table 74 Top five domestic and foreign enterprises according to patent application in 2009

Domestic Applications Foreign Applications Name Amount Name Amount

ZTE corp. 5719 Sony Corporation 2088

Huawei Technologies 2868 Panasonic Corporation 1825 Hongfujin Precision Industrial 2306 Koninkli Philips Electronics N.V. 1601 (Shenzhen) Co.,Ltd Shanghai Zhangjiang Creative 1623 Samsung Electronics Co.,Ltd 1351 Industry Development Co.,Ltd China Petroleum and Chemical 1463 Toyota Motor Corporation 1201 Corporation Source: 2009 SIPO Annual Report, p.39.

Patent Procedure

China provides three types of patent rights:

1. Invention Patents are granted for 20 years from the filing date with proof of novelty, inventiveness, and clear industrial application. Patents can be excluded for the same reasons as indicated in the European Patent Convention. Software cannot itself be patented unless combined with a computer or technique intended to solve a technical problem.

2. Utility Model Patents are granted for a term of 10 years from the filing date.

3. Design Patents are also granted for a term of 10 years from the filing date, and perform a function similar to a design patent in the United States.

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China uses the ‘First-to-File’ principle instead of the “First-to-Use” or “First-to-Invent” Principles. This means the right to patent protection belongs to the applicant who files a patent registration first, regardless of whether he is the real owner. Therefore, if the real owners of inventions are slow to file for patent protection, they risk having their patent rights taken by others.

Generally, the basic steps of the patent procedure are similar to practices in other countries. If applicants are foreigners, their applications can be filed only by official patent agencies designated by the Patent Administration Department under the State Council. These agencies have to pass a qualifying examination and must have at least two years of experience. In 2009, 627 patent agencies passed an annual review by SIPO. In order to reexamine these patent agencies each year, SIPO launched an online examination called ‘the Patent Bar Examination’ that was first used in 2010.167

After a preliminary examination, SIPO publishes the application in the Invention Patent Gazette, and the applicant has up to three years from the date of application to request a substantive examination. Applicants must provide relevant prior art, including searches by foreign patent authorities. However, substantive examinations are not necessary for utility models and designs. Only preliminary examinations are required. Based on EPO information in 2009, the whole patent examination usually took 25.8 months for invention patents, 5.8 months for utility models and 5.5 months for designs.168

When an examiner decides to grant a patent, the patent will be published, and become valid as of the date of filing. If a disagreement arises between the examiner and the applicant, the applicant may appeal for a reexamination by a semi-independent Patent Re-examination Board (PRB). If still dissatisfied, the applicant may request legal proceedings in the People’s Courts, but such proceedings must be initiated within three months of the PRB’s decision. A third party may also request that the PRB revoke or invalidate a patent. A decision made by the PRB decision may be appealed in the Civil Divisions of the People’s Courts.

167 The State Intellectual Property Office, 2009 Annual Report, 27. 168 European Patent Office, http://www.epo.org/searching/asian/china/faq.html (accessed on March 9, 2011).

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Chart 35 Chinese Patent Granting Procedure (as of 2001) Application

Formality Check

Classification

Laid-open publication (18 months after filing date)

No request for examination

Request for examination Withdrawal of application (within 3 years of filing)

Examination

Notification of pending refusal Decision to grant patent Decision of refusal

Publication of granted Appeal to Re-examination patent Board

Invalidation Appeal to Beijing High Court

Decision to revoke Decision to maintain

Appeal to Beijing High Court

Source: http://www.epo.org/searching/asian/china/grant.html

Typically, the whole patent procedure takes three to five years. Applicants can expect an average grant lag (the period of time between initial filing and final grant) of 4.7 years. While this average is comparable to the EPO, it is greater than that at the USPTO169, and many applicants see it as a key problem. Applicants also complaints about their inability to amend claim scopes or add new claims during prosecution. 170

169 Liegsalz, Johannes / Wagner, Stefan (2011): Patent Examination at the State Intellectual Property Office in China, European School of Management and Technology, Berlin. 170 Practitioner opinion

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Furthermore, a recent study by the European School of Management and Technology has suggested the possibility that SIPO’s patent-granting process is prone to discrimination against not only foreign applicants, but also non-priority applications. After conducting a rigorous statistical analysis of the 443,533 patent applications filed at the China office between 1990 and 2002, Liegsalz and Wagner found that Chinese applicants enjoy faster patent-grants relative to their non-Chinese (and especially non-Asian) counterparts, and that these differences are even more pronounced when domestic applicants’ patents are aligned with the country’s key economic growth sectors.171 While the authors could not claim with certainty that nationalist discrimination was to blame for their findings (one alternative possibility was that domestic applicants’ filing advantages were the natural result of language proficiency)172, the possibility they propose warrants careful consideration and further research – as the Chinese market becomes increasingly important to foreign firms, these firms may alter their IP strategies to file first not in their home countries, but at the SIPO; accordingly, it is crucial that the Chinese office uphold its TRIPS obligations by ensuring fair and equal treatment to all applicants.

Trademark Applications

In 2009, China received 808,546 trademark applications and approved 818,633 trademark registrations. Total trademark applications grew at an average annual growth rate of 16% from 2000 to 2009. The number of domestic applications grew at 8.9%, while the number of foreign applications increased even more rapidly at 16%. Domestic trademarks made up 89.2% of all applications and 87.1% of all registrations. Total trademark registrations during these years grew at 20.7% on average.

Table 75 Total Trademark Applications and Registration by Residents and Non- residents (2000-2009)

Application Registration Year Resident Foreign Total Resident Foreign Total 2000 181,717 30,885 212,602 129,441 21,520 150,961 2001 229,775 30,149 259,924 167,563 24,986 192,549 2002 321,034 43,914 364,948 169,904 29,005 198,909 2003 405,620 41,034 446,654 206,070 27,060 233,130 2004 527,591 54,214 581,805 225,394 32,528 257,922 2005 593,382 65,766 659,148 218,731 34,402 253,133 2006 669,276 72,666 741,942 228,814 38,193 267,007 2007 604,952 76,406 681,358 215,161 33,036 248,197 2008 590,525 78,563 669,088 342,498 46,617 389,115 2009 741,764 66,782 808,546 737,228 81,405 818,633 Source: World Intellectual Property Indicators 2010

171 Liegsalz, Johannes / Wagner, Stefan (2011): Patent Examination at the State Intellectual Property Office in China, European School of Management and Technology, Berlin. 172 Ibid.

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Trademark Procedures

Trademarks, service marks, collective marks, geographical indications, and certification marks may be registered. Well-known trademarks are also protected for ten years from the date of approval of the registration. The process of renewing a trademark registration must begin no less than six months before the expiration date.

One to two months after the acceptance of the application for trademark registration, CTMO will issue an official filing receipt. After the formality check, the application will go through the substantive examination, after which it will be published in the China Trademark Gazette within about 36 months of the date of filing. The opposition period extends three months from the date of the publication. During this period, any person may file an opposition to registration of any trademark that has, after examination, been conditionally approved. If there is no opposition, the CTMO will issue the registration certificate two or three months after the end of the publication period. When any party is dissatisfied with the Trademark Office’s decision of refusal, opposition or cancellation of the registration application, he may apply to the Trademark Review and Adjudication Board for a review. Where any concerned party considers a registered trademark to be improperly registered, that party may apply to the Board for cancellation of the trademark. The Board’s decision may be appealed through legal administrative proceedings at Beijing No. 1 Intermediate People's Court. If there is no opposition, a new application could be granted registration within 40 months of the date of filing.173

Similar to its patent procedure, China’s ‘First-to-File’ trademark registration system does not require any evidence of prior use or ownership. This means that any party can seek registration and take ownership of popular foreign trademarks.

In an attempt to expedite the trademark registration process, SAIC made speedier processing one of its eight top priorities in 2008. Three-year and five-year targets were set. The three- year targets were as follows:

 In 2008, to complete the examination of 700,000 trademark applications and reduce pendency from 36 months to 30 months;  In 2009, to complete the examination of 1,300,000 applications and reduce the pendency from 30 months to 19 months;  In 2010, to complete the examination of 1,400,000 applications and reduce the pendency from 19 month to less than a year.174

Accordingly, CTMO recruited 298 trademark examination assistants and 92 trademark review and adjudication assistants. IT equipment and systems were upgraded. In addition, incentive mechanisms and performance management were revised, along with improved trademark examination quality management mechanisms.

173 China Trademark Office, http://202.108.90.115/english/registration/registration.asp (accessed on March 25, 2011). 174 Trademark Office/ Trademark Review and Adjudication Board State Administration for Industry and Commerce, People’s Republic of China, “Annual Development Report on China’s Trademark Strategy 2008,” http://202.108.90.115/english/2008Report.pdf (accessed March 25, 2011)

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Automation and Information Technology

SIPO has developed its documentation and automation system to become the world’s most extensive patent information resource. An enormous volume of patent documentation can be accessed in the Patent Documentation Library, the Intellectual Property Library, the Science and Technology Library and the Classified Patent Dossier Library that includes 94 patent institutions.175

Over the past seven years, SIPO has engaged in an automation program, focusing on patent administration. An electronic filing system was developed and became operational as of March 2004. All stored data was transferred to magnetic disks in that year. The total volume of storage is around 38 terabytes. In 2009, a total of 64,809 electronic applications were received, accounting for 7% of all applications. The number of electronic applications has continued to increase significantly every year.176 Filing applications online is more convenient and economical than traditional paper submission. Two search interfaces have been provided:

 C-Pat Search is a Chinese patent search system in English. It can be accessed via the China Intellectual Property Net (CNIPR). Most Chinese language patents are translated by automated translation. The system provides more than 2.5 million Chinese patents from 1985 to the present.  China Patent Database is a patent search web, provided by China Patent Information Center (CPIC).

175 The State Intellectual Property Office, http://www.sipo.gov.cn/sipo_English/about/documentation/200804/t20080416_380174.html (accessed on March 11, 2011). 176 Lu Jianjun, “An Effective Way to the Harmonization of Patent System,” March 2010, 33.

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Chart 36 China Trademark Registration Procedures

Domestic Applicant Trademark Agency

Trademark Office Accepts the Application

Trademark Agency Formality Check No Yes Request the Applicant to make Supplements or Whether in Amendments within a Whether in Conformity with Specified Time Limits Conformity Relevant Provision with Relevant Provision

Yes Terminate Substantive Examination

No Whether Whether in Refuse the Whole or Part of the Application Apply for Conformity with Review and Relevant Adjudication Provision Yes

Primarily Approve and Refuse the Application Publish the Trademark Justified

Opposed Party is Whether there is Whether Dissatisfied with the any opposition the Decision Opposition is Justified Not justified Approve the Registration Opponent is Dissatisfied with the Decision Dispute Over Registered Trademarks Review of Opposition Trademark Review and Adjudication Board

Dissatisfied with the Decision

Beijing No.1 Intermediate People’s Court

Beijing Higher People’s Court

Source:Adapted from China Trademark Office

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On the trademark side, CTMO also utilizes information technology to increase its efficiency. Its IT developments include 17 high-performance servers, more than 1,000 computer terminals, and a trademark database. The public can search for trademark registration information online at the CTMO trademark database for free. Online trademark registration is also available at http://www.chinatrademarkoffice.com/index.php/tdreg/. Additionally, its Trademark Gazette Search website contains the latest 12 issues of Trademark Gazette, including information on conditionally approved trademarks, registered trademarks, renewals, modifications, assignments, annulments, oppositions, trademark reviews and adjudications, and records of trademark license contracts. The CTMO trademark database also allows examinations to be conducted electronically.

Enforcement

Several means of IP enforcement exist in China. Enforcement of patents at the administrative level is governed by the “Measures on Patent Enforcement” document issued by SIPO. This statement provides tools for putting an immediate stop to infringement, but cannot award damages. It is a simple, low-cost mechanism, capable of providing quick decisions. There are several organizations responsible for administrative enforcement of IP laws in China. SIPO is responsible for administrative enforcement of patents, whereas the General Administration of Customs (GAC) is responsible for administrative enforcement of IPR at Chinese borders. 177

Similarly, trademark owners can protect their rights through administrative means. Infringement complaints can be filed at local trademark office divisions of the SAIC. At or above the county level, these bodies have the authority to order a halt to the trademark violation, confiscate and destroy the counterfeiting goods, and impose a fine.

The Chinese judicial system comprises courts at four different tiers: the Supreme, Higher, and Intermediate and Basic People’s Courts. With the exception of the Basic People’s Court, these courts all have special divisions for IPR disputes.178 In 2009, the Chinese courts received almost 40,000 IPR cases. Some 90% of these came from domestic companies.179 In the courts, the “Stop Infringement Act” allows awards for damages among other legal recourse. This process is not as expensive as in the United States, and there is no discovery element. The average damage claim in 2010 was about USD 240,000.180 Criminal penalties are also in place when infringement constitutes a crime, and the prison sentences for such offenses were recently lengthened from 2-5 years to 3-7 years. Appeals and damages can be handled in the Intermediate and Higher Courts.

According to the Trademark Law, charges of trademark violation can also be brought before the People’s Courts. When the amount of damages caused by infringements cannot be determined, the People’s Courts may impose fines of up to RMB 500,000.

177 Aaron D. Hurvitz, “Enforcement of Intellectual Property Rights in China:Managing the Fork in the Road,” February 24, 2010, http://www.kangxin.com/publications/articles/enforcement-of-intellectual-property-rights- in-chinaqmanaging-the-fork-in-the-roadq (accessed on April 20, 2011). 178 Wang, Lina (2004): Intellectual Property Protection in China, in: International Information & Library Review, Vol. 36, No. 3, pp. 253-261. 179 Richard Wigley, “China: Challenging Perception: Statistics from the Supreme People’s Court on IPR Lawsuits in the PRC,” February 24, 2011, http://www.mondaq.com/article.asp?articleid=123600&email_access=on (accessed on 2 March 2011). 180 Ibid.

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Consultation and arbitration are alternative measures to resolve IPR disputes. In the late 2000s, an average of 400 IP cases per year was settled by alternative resolution. Either mediation or negotiation between owners and infringers is the most economical option, saving a great deal of money in litigation costs and other fees.181

The enforcement of IPR rulings is the country’s main problem. Sentences are often not enforced properly. As a result, counterfeiters may continue producing and selling products even though a sentence has been passed down.182

Conclusion

China has long maintained a sound IP administration framework; nonetheless, as of the release of K.I.Asia’s first report, serious enforcement concerns remained over the degree to which the country protected foreign copyrights and trademarks, and reprimanded IPR infringers.183 These issues were brought to a head when the US government, in April of 2007, filed a dispute against China with the WTO, claiming that various elements of China’s enforcement laws and policies undermined its obligations under the WTO’s TRIPS. Three primary concerns were highlighted:

 Chinese Copyright Law refused IPR protection to foreign copyrighted products that did not meet the country’s “content review” standards.  Chinese law allowed for counterfeit and pirated goods seized at its borders to be re-released upon the market via public auction so long as all infringing marks were removed.  Chinese law stipulated criminal prosecution against IPR infringers only when infringing activities reached certain thresholds, effectively protecting dealers in counterfeit and pirated goods up to a certain minimum level (volume or value of infringed goods) of “commercial-scale” activity.184

In a March 2009 report, a WTO Dispute Settlement Body agreed with the US government position regarding the first two points, claiming that China’s current rules and regulations breached its TRIPS obligations (according to articles 9.1 and 41.1, and articles 46 and 59, respectively); while the panel agreed that China’s commercial limits should realistically reflect market realities, it could not definitively conclude, based upon current evidence, that the country’s criminal prosecution thresholds were too high.185

Soon after the release of the panel’s findings, China announced plans to amend its laws accordingly, and agreed to work with the US authorities toward implementing relevant

181 Aaron D. Hurvitz, “Enforcement of Intellectual Property Rights in China: Managing the Fork in the Road,” February 24, 2010, http://www.kangxin.com/publications/articles/enforcement-of-intellectual-property-rights- in-chinaqmanaging-the-fork-in-the-roadq (accessed on April 20, 2011). 182 “Trademark Right Enforcement in China: Comparing with US Trademark Right Enforcement,” June 6, 2008, http://yigou502.fyfz.cn/art/352425.htm (accessed on April 20, 2011). 183 2010 Special 301 Report, April 30, 2010, Office of the United States Trade Representative 184 USPTO, “United States Wins WTO Dispute Over Deficiencies in China's Intellectual Property Rights Laws,” http://www.ustr.gov/about-us/press-office/press-releases/2009/january/united-states-wins-wto-dispute-over- deficiencies-c (accessed August 22, 2011). 185 Ibid.

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changes, to be completed by March 20, 2010.186 Furthermore, it is worth mentioning that even though the WTO would later claim insufficient evidence to decidedly judge China’s commercial thresholds too high, the country voluntarily halved its criminal copyright threshold (from 1,000 to 500 infringing copies) shortly before the US government filed suit.187

With the release of further WTO dispute resolution decisions between 2009 and 2010, further changes were made to reduce China’s market-access restrictions on foreign producers of publications, movies, music and other entertainment products. The WTO ruled that China’s barriers to these goods, requiring all relevant imports be channeled through state- approved or state-run companies, denied foreign producers control over the marketing and distribution of their goods, and significantly inhibited time-to-market. This situation resulted not only in the restricted flow of authentic products upon the market, but also a breeding ground for infringers to produce and distribute their own pirated versions. The dispute resolution panel found that under the WTO’s Accession Protocol and General Agreement on Trade in Services, China’s practices violated its WTO obligations, and, after an unsuccessful round of appeals, the country agreed to work toward amending its policies.188

Even though China has taken promising preliminary steps toward enhancing enforcement, the country remains on USPTO’s Priority Watch List due to various issues that threaten the legitimacy of its IP regime. Indeed, the US Government claims that “the overall level of IPR theft in China remains unacceptable…largely ineffective and non-deterrent.” These issues are not limited to those aforementioned, and further include lax IPR infringement patrolling and insufficient sanctions. So while minor improvements should be recognized, e.g. judicial rulings protecting IPR and penalizing infringers in retail markets in Beijing and Shanghai, IPR infringement remains pervasive, severely stifling legitimate sales not only within China, but also throughout the region.189

Inconsistent patrolling activities and infrequent, lenient penalties for infringers have fostered an environment in which many local players doubt the national priority given to IPR, and have been known to disregard relevant court rulings. Unsurprisingly, IPR holders from various sectors have bemoaned the extent of business losses in China, and consequently, the US has encouraged the country to take a concerted stand against IPR infringement. This stand should comprise enhanced patrolling and punitive measures (e.g. unannounced audits and inspections and criminal sanctions), as well as diminished barriers to market entry by foreign firms (this might be achieved via policies to limit the aforementioned foreign content standards and other unfair advantages for “indigenous innovation”), and should result in a heightened national awareness of, and respect for, the importance of IPR, and a better business environment for all. Toward this end, the US has confirmed its commitment “to work with China on IPR enforcement and protection strategies, innovation policies and the range of other important IPR-related matters…”190

186 2010 Special 301 Report, April 30, 2010, Office of the United States Trade Representative 187 USPTO, “United States Wins WTO Dispute Over Deficiencies in China's Intellectual Property Rights Laws,” http://www.ustr.gov/about-us/press-office/press-releases/2009/january/united-states-wins-wto-dispute-over- deficiencies-c (accessed August 22, 2011). 188 2010 Special 301 Report, April 30, 2010, Office of the United States Trade Representative 189 Ibid. 190 Ibid.

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APPEN IX

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COMPARATIVE ASSESSMENT STUDY OF PATENT AND TRADEMARK OFFICES IN SOUTHEAST ASIA WORKSHOP

JUNE 7, 2011

BANGKOK, THAILAND

WORKSHOP REPORT Kenan Institute Asia (K.I.Asia), in collaboration with Chulalongkorn University’s Intellectual Property Institute and Tilleke and Gibbins law firm, is updating and expanding K.I.Asia’s “Comparative Assessment Study of Patent Offices in Southeast Asia”, as a joint project agreement with the USPTO. The study will focus on the process of trademark and patenting registration procedures across the region, and will include the following ten countries: Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The overall goal of the study, which is to be completed during the period of October 2010 to October 2011, is to strengthen patenting and trademark registration processes in Southeast Asia and China by compiling country-specific information in the following areas:  Most recent information on patent and trademark office performance, such as size of the application backlog and the number of patent applications, grants, withdrawals and rejections  Patent and trademark registration procedures, including the use of information technology and search tools, IPR enforcement mechanisms, and recommendations for improvement  Compile a detailed profile on each country’s patent and trademark registration process, including who actually examines the applications, whether there is protection against conflicts of interest, how long each step in the process takes and who makes the key decisions in the process.  Identify gaps in capabilities in the patenting and trademark process

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The Workshop

The K.I.Asia team collected primary data through desk research, the findings of which led to a customized questionnaire to be completed by each of the participating patent offices and IP practitioners. The questionnaire was followed up with email discussions and personal interviews to clarify the information provided before the final report was drafted. Additional information on the patent and trademark registration process, provided by senior lawyers from Tilleke & Gibbons, Ltd., was incorporated into the report.

K.I.Asia hosted a workshop for 30 participants from the IP offices in the region, private sector, other government officials and academia on June 7, 2011 in Bangkok. The objectives of the workshop were to review the report on ASEAN IP offices and to share knowledge on ways to help those offices to improve services while simultaneously streamlining operations. Following are the participants list, agenda and workshop notes.

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Comparative Assessment Study of Patent and Trademark Offices in Southeast Asia Plaza Athénée Hotel, Bangkok, June 7, 2011

LIST OF WORKSHOP PARTICIPANTS Southeast Asian IP Officials

Name Position Organization Country Chief of Bureau of Department of Intellectual Mr. Suon Vichea Cooperation and Legal Property Rights, Ministry of Cambodia Affaire Commerce Head of Sub-Directorate Directorate General of Dr. Erni Widhyastari of Classification and Indonesia Intellectual Property Rights Searching

Senior Director of Trade Intellectual Property Mr. Abdul Aziz Ismail Malaysia Mark Corporation of Malaysia Head of Patent Mrs. Fatimah Rohada Intellectual Property Examination Section Malaysia Dahalan Corporation of Malaysia (Engineering) Ministry of Science and Dr. Pwint Phyo Win Deputy Director Myanmar Technology Deputy Director of National Authority for Ms. Souligna Sisomnuck Industrial Property Lao PDR Science and Technology Division Director, Bureau of Intellectual Property Dr. Epifanio Mistica Evasco Philippines Patents Philippines Assistant Director General International Intellectual Dr. Kajit Sukhum Thailand (Foreign Affairs) Property Mr. Suradet Assistant Director General Department of Intellectual Thailand Atsawintarangkun (Patent) Property Head of International Department of Intellectual Mr. Pornvit Sila-On Cooperation (ASEAN & Thailand Property APEC) National Office of Dr. Pham Phi Anh Deputy Director Intellectual Property of Vietnam Vietnam

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Other officials and private sector participants

Name Organization

Mr. Reiji Mishima JETRO Bangkok

Mr. Fabio Artuso ASEAN project on the Protection of Intellectual Property Rights

Mr. Stephane Passeri ASEAN project on the Protection of Intellectual Property Rights

Dr. Kittima Yuthavong Pharmaceutical Research & Manufacturers Association

Mr. Teerin Charoenpot U.S. Commercial Service

Mr. Fabrice Mattei Rouse Thailand

Ms. Nirada Weerasopon National Science Technology and Innovation Policy Office

Ms. Jantapa Erjongmanee Baker & McKenzie Ltd.

Dr. Piengpen Butkatanyoo National Science Technology and Innovation Policy Office

Mr. Suebsai Taomahawong Office of Khowledge Management &Development (OKMD)

Mr.Richard Bernhard Kenan Institute Asia

Mr.Charles McLaurin Kenan Institute Asia

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Speakers

Name Organization

Dr. Usanee Yodyingyuad Chulalongkorn University Intellectual Property Institute

Ms. Darani Vachanavuttivong Tilleke & Gibbins International Ltd.

Ms. Jennifer Ness U.S. Patent and Trademark Office, U.S. Embassy Bangkok

Mr. Christopher Knight Everett Knight Ltd

Ms. Wiboonlasana Ruamraksa Office of Permanent Secretary

Mr. Paul Wedel Kenan Institute Asia

Dr. Busakorn Chantasasawat Kenan Institute Asia

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WORKSHOP AGENDA “Co arative Assess ent St d of Patent and Trade ark Offi es in So theast Asia” Plaza Athenee Hotel, Bangkok, June 7, 2011

Tuesday, June 7, 2011

08:30 – 09:00 Registration

09:00 – 09:10 Welcome: by Mr. Paul Wedel, President of the Kenan Institute Asia 09:10 – 09:20 Opening Remarks: by Ms. Jennifer Ness, Regional Intellectual Property Attaché, U.S. Patent and Trademark Office 09:20 – 10:10 Comparative Assessment Study Presentation: by Dr. Busakorn Chantasasawat, Project Manager, Kenan Institute Asia 10:10 – 10: 30 Questions and Comment

10:30 – 10:45 Refreshment Break

10:45 – 12:00 Panel discussion: Best Practices – Improving the Operations of ASEAN Patent and Trademark Offices Issues: - Patent and Trademark Procedures by Ms. Jennifer Ness, Regional Intellectual Property Attaché for Southeast Asia, U.S. Patent and Trademark Office - Overall IP Office Administration by Ms. Wiboonlasana Ruamraksa, Commercial Advisor, Office of the Permanent Secretary, Ministry of Commerce - Staff Capacity by Mr. Christopher Knight – CEO, Everett Knight Ltd.

12:00 – 13:30 Lunch

13:30-15:30 Continued panel discussion Issues: - Patent and Trademark Agent Capacity by Dr.Usanee Yodyingyuad, Advisor, Chulalongkorn Intellectual Property Institute - Dispute and Settlement Processes by Khun Darani Vachanavuttivong Co-Managing Partner, Manager Director of Intellectual Property Tilleke & Gibbins International Ltd.,

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15:30-15:45 Refreshment Break

15:45-16:00 Summary and wrap up by Mr. Paul Wedel, President, Kenan Institute Asia

16:00 Closing

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WORKSHOP NOTES Comparative Assessment Study of Patent and Trademark Offices in Southeast Asia Plaza Athénée Hotel, Bangkok, June 7, 2011 (These notes are unofficial.)

Welcome – Paul, President and Executive Director, K.I.Asia Key Points:  Strong IP regimes are crucial to developing Southeast Asian countries as they seek to increase the value-added component of their economies  Low cost labor and cheap resources are not sustainable sources of competitive advantage in the long term if SE Asian countries want rising incomes and better quality of life  Innovation and added value are necessary – so Southeast Asia must create more and higher-value IP  It is difficult to do this if the creators of IP have no assurance that their rights to that IP will be registered and protected  Thus, the fast, efficient registration and the effective protection of rights regarding this IP are crucial to fostering sustainable development

Background to the project: K.I.Asia produced the first Comparative Assessment Study of Patent Offices in Southeast Asia in 2007. That report was seen as helpful by many working on the development of IP regimes in the region. The US Patent and Trademark Office (USPTO) therefore funded K.I.Asia to update the study while extending it to cover trademarks and deepening it to include issues affecting efficient IP registration. Paul said the goal of the report is to provide information to help ASEAN IP offices improve their operations. It also includes information on China due to the country’s growing importance in IP and expanding role in the regional economy. The report will also look at issues impacting regional integration of IP processes. The purpose of the workshop is to provide additional information and analysis for the report and to exchange ideas and experiences on best practices that can improve the IP regime in the region.

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Opening Remarks – Jennie, Regional Intellectual Property Attaché, U.S. Patent and Trademark Office The USPTO-ASEAN relationship has been uniquely strong, positive and changing over the years, and will need to change further. The United States wants to embrace that change but needs to see data to facilitate this continued linkage (efforts in ASEAN amount to 45% of US assistance to regional IP regimes). It is crucial to show that this engagement is yielding results (e.g. pendency and number of examiners are important metrics for showing progress). Funding the second round of the report in order to assess the work which has been done in the region is therefore important for continued USPTO engagement in the region. Have these metrics been improved? The second report should address this issue as well as provide information on efforts to improve. Complete success is not expected. The USPTO itself has experienced many problems and failures, but these can help us move forward. Challenges in developing IPOs in the region are to be expected and will inform the USPTO on how they should assist the region in the years ahead. Study Presentation – Dr. Busakorn, Senior Consultant and Project Manager, K.I.Asia Key problems found:  Examiners often need to coach local inventors on preparing applications – this takes a great deal of time, which takes away from time to work on easier foreign applications  Insufficient number of examiners – the best examiners are often promoted to other positions or leave government service  Examiners lack sufficient familiarity with new technologies  Lack of experience – examiners leave to enter the private sector  Search tools – offices desire one central, complete database  Slow internet and old computers; insufficient servers  English language necessary for searches and too few examiners are fluent  Applicants intentionally delaying filing for substantive examination

Issues regarding registration time and pendency  It would be useful if all offices could collect information on total registration time and backlogs  We need to get a consensus from offices on what constitutes backlog – Philippines, for example, specifies applications over four years old without resolution

Common Needs  Training for examiners in new technologies  Training for domestic applicants (patent agents)  Improving English

Questions and Comments on Study Suggestions from the participants on what partner organizations (USPTO, WIPO, EPO and JPO) can do to help the ASEAN offices: USPTO:  Tight budget currently; certain assistance measures congressionally authorized, others not  Main thing USPTO can do is help in training examiners

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 Because of English language issues, trainings have tended to be in each office using translation  USPTO is ready to handle requests to do bilateral training  Attempted to help with databases but US uses commercial databases, and has no authority to provide such databases or Internet to foreign offices  Authorized to support training of offices, not the public – IP awareness is OK but not practical training  Europeans likely have better ability to train in their home offices

Japan:  JPO has had training program for years in training people – this will likely continue  Holds training seminars for Japanese companies

EPO:  Has continued to provide technical assistance through the established ECAP program  Has provided IT equipment to Cambodia  Training to IP professionals – including training examiners in specific technological fields  Worked with major offices in China

Suon Vichea recommended that all donors help with benchmarking and strategies to reduce registration time and backlogs, noting that Cambodia is trying a strategy of priority registration within one month (as compared to the standard four months) There was a discussion of successful efforts in Malaysia and Philippines to diminish backlogs: Epifanio admitted that the numbers provided in the report need correction, and that the situation is not as good as it appears. Nonetheless, becoming autonomous allowed for a more flexible response to changing workloads – the office hired new examiners with education in new technologies (e.g. nanotechnology), and carefully managed the work level for each examiner – as rule of thumb, assigning 150-180 applications per examiner per 6 month period (approximately 25-30 per month). Question from The USPTO representative – how many offices use formed paragraphs (standard rejection/notices of allowances)? Implementing this Standard language across ASEAN offices could increase process efficiency. Participants replied that the offices that currently use such paragraphs were the Philippines, Malaysia, Indonesia, Vietnam and Thailand. Khun Kajit noted that the issue is not just the number of applications – quality matters; quality also requires resources and experienced, well-educated examiners capable of dealing with constantly changing technologies. Other issues mentioned included:  Turnover (of applications) – a cleaning-up process is important for office operations  The English language is a barrier – reading patent descriptions is very difficult, even for PhD’s with good English  Training is limited (you can’t teach old dogs new tricks), and training seminars take time away from examiners’ work  Thailand has the highest number of applications per examiner, but is not currently hiring

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 Why can’t major IP countries (EU, US, Japan) form a central database? – the potential for duplication across platforms is a concern – a central database would be less expensive and much easier to use  Training of applicants is not of primary concern because most applications are foreign (standard English) applications  Thailand is currently struggling with corporatizing the DIP – a recommendation supporting corporatization for ASEAN IPOs under the AEC might facilitate this transition

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Panel on Best Practices Jennie – Patent and Trademark Procedures Thailand’s comment about a central data base is a good point. Large-scale integration will be a challenge, but there are small things that can be done. US example: the USPTO underwent an end-to-end review to cut office fat and streamline processes in order to waste less and maintain optimal operational efficiency at each point in the value chain. Jennie said that sometimes we need fresh eyes to see which processes are outdated and/or inefficient and to suggest changes to the process – these changes may take legislative change which can be time-consuming; however, some changes are up to the office’s discretion – make appropriate changes where you can to improve system, looking to the US, EU and Japan as models (Philippines has recently implemented huge changes). Vietnam example – when a trademark application is reviewed, three different signatures are required, and the office head must sign every form) – this may be overly burdensome because applications pile up if office head is away – the Vietnam office should consider amending its application approval process. Thailand example – after a paper application is filed at the front desk of the DIP, it is transported to a secretarial desk where it must be manually transposed into electronic form, increasing chances for error while allocating limited time and resources on this superfluous worker – the office should consider streamlining this process. For the US, pendency times were not tracked regularly; therefore, a dashboard was implemented to constantly measure the time required for each process in each art department. This allowed for small improvements, greater transparency and enhanced planning. The Malaysia representatives were asked how their office successfully reduced its backlog. Key points were:  Employed more examiners (with only 12 staff before, 40 new patent examiners were hired after corporatization)  Implemented internal search tool and trademark management system – digitalized records were more easily referenced (instead of waiting several days for hard copies)  Set targets – motivated examiners to set targets and timeframes  Backlog project – the examiners were financially incentivized to finish backlogged work  Amendments to policies – the wait to request for substantive examination was decreased from 24 to 18 months

Epifanio responded to the same question:  Project with EPO to assess management procedures – recommended employing the private line approach so that each bureau is responsible for publication from filing onward  Notification of certificate process streamlined whereby the director must sign off on the approved certificate only once (after all processing) – reducing the time needed for this part of the process from 6-12 months to two months  An end-to-end review has identified process improvements such as preparing the publication notice two months in advance, and closer monitoring by division heads  Partnered with EPO to try the Global Patent Index – this proved to be an efficient central database – considered employing Thomson Reuters, but this private system

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was too expensive for the value added – will more fully utilize and/or join the GPI moving forward

Question: Who else has had experience with the GPI? Might this tool answer Thailand’s central database request?  Indonesia reported difficulties finding full documents on GPI – often able to view only the bibliography, especially from the Japan, Korea, and China offices  Malaysia has ten lines on trial with GPI and five with EPOQUENet – GPI is faster and more comprehensive – EPOQUENet will help and the office wants all examiners to have both systems; this arrangement, however, is expensive

Question: Does the US have any systems ASEAN can try? Jennie said the US can’t currently offer database access; in the past, a tri-lateral effort by US, EU and JPO was administered by JPO but the future of this effort is uncertain – recently, Congress has refused access due to fears regarding uneven IP knowledge and information security – hopefully EPAC III will take charge of this moving forward She commented that the Philippines office (like the USPTO) has successfully worked with stakeholders to eradicate duplicative processes, and suggested that, in business terms, the applicant is the customer and the customer is always right; she then posed the question: how many offices have engaged with stakeholders, and to what result? Epifanio – employed the Asia Institute of Management to help the office identify core and concerned stakeholders as distinct from mere critics – a successful series of workshops facilitated by AIM allowed for working with stakeholders to restructure processes in order to improve services Fabrice – patent agents must continually upgrade knowledge and skills in order to provide quality work; – in Europe, oral discussion between applicants and examiners facilitate explanation of the technology and clarification of misunderstandings; communication and understanding are limited when applicant’s only option is a written application Dr. Kittima – if Thailand is to be a creative economy, IP must be demystified and decentralized Khun Wiboonlasana, Commercial Advisor, Office of the Permanent Secretary, Ministry of Commerce – Overall IP Office Administration Key Points:  Goal of DIP is to be efficient and modern, to promote IP creation, and to form international IP networks  Working with universities to improve in-house patent search processes; IT is both in- house (small) and outsourced; a national search database for inventors is available on CD for sale on free online  Working with USPTO, WIPO, SIP, EPO, JPO, IP AUS, KIPO  Majority of petty patents filed by Thai locals  Number of examiners employed is limited by government  Trademark registrations are major source of revenue; all are revenues returned to government and reallocated according to annual budget  Government has incentivized the public to file patent applications via low filing costs (less than ¼ of US price)  Bureaucracy is major challenge ahead – currently, office is unable to incentivize examiners

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 Office has commissioned Chulalongkorn University to conduct corporatized office study, and is working to train agents, improve internal database, and to engage with regional and international organizations including ASEAN and WIPO

Main issues to consider:  Streamline technical assistance (info sharing and training)  Physical interaction/on-site practice learning is required  Tailor-made technical assistance (IT and database systems) is needed

Phi Anh reported similar issues:  Salary increases restricted by government  Commercial databases are too expensive  Language barriers are difficult to overcome  Unable to recruit highly-trained English-speakers due to high private sector salaries

Khun Darani asked whether or not DIP had faced difficulties this year due to the PCT, as granted applications decreased. Khun Kachit responded that the PCT program had just entered the national phase and his office wants to use this period to decrease the backlog; however, there is currently too much work for examiners, and the DIP seeks training on how to best prepare for the national phase It was noted that petty patent applications had actually increased, while the government policy of moving toward a creative economy had put additional demands on DIP manpower Paul asked if there were ways to compile streamlined, tailor-made assistance packages. Jennie – the US is prohibited from bringing foreign examiners in to work side by side US patent officers; however, a past project with the Philippines sent foreign representatives to the US for USPTO training – this was very expensive as it included housing in DC, and the project was never renewed – we need to look at similar models moving forward, and look toward additional sources of funding Mishima-san – from the viewpoint of Japanese companies, they can help offices by expecting or anticipating whether or not a given application will be granted – this approach will offer a new aspect to the solution Stephane – the office looks to integrate with/assist ASEAN – multiple initiatives are in place and a plan is currently being drafted – EPO is more flexible than US; however, it must still allocate resources between domestic and international assistance Jennie – we realize the need to gear training toward specific ASEAN national needs and also strengthen mentoring and training (i.e. not just an annual conference) – this would help to align such assistance with local needs. Further, we must justify each program offered, so if only one meeting is offered, it is hard to interact based on current information and budgets while addressing specific interests and national needs. USPTO attempts to engage bilaterally with individual offices, but this is difficult under current mechanisms. ASEAN is a useful platform to facilitate assistance Khun Kajit – are there any plans to extend technologies to ASEAN – we need to consider the costs of assistance and consider cost sharing Suon Vichea – our office is not autonomous; it sends revenues to the government which reallocates through its budget – there is an inadequate number of examiners and insufficient equipment (originally acquired via international assistance) – the office has considered asking WIPO to study the establishment of a separate IP office, and Singapore to study an autonomous office – currently considering joining the Madrid Protocol and reviewing the office’s enforcement measures; critical activities for assistance include a program to increase

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public awareness and the development of an online platform; the office is currently searching for development partners – the K.I.Asia report should look at each country’s needs and be submitted to ASEAN Khun Kajit – the US has always offered assistance to ASEAN; however, there may be a lack of understanding regarding our needs. There has been too much focus on enforcement, and not enough on administration. We have requested training in Bangkok – but US and EPO have not provided this. Since Thailand is trying to protect international IP, why can’t the West provide the training necessary to do this more effectively? Jennie – we have money for IP enforcement but not a lot on the other side (i.e. IP registration) – large bureaucracy is a real issue for all of us – the more information on specific needs in the report, the better Chris, CEO, Everett Knight Ltd. – Staff Capacity Key Points:  All the region’s IPOs seek to foster creativity and innovation  Delays in securing patent grants are a particular challenge in the pharmaceutical industry – can take up to twenty years or more (patent expires before it is granted)  Look toward pinpointing factors that lead to these delays – filing, substantive, other  Best practice – organize public-private stakeholder dialogues – sit down with cooperative stakeholders to see what we can fix; providing information on the new technologies that will appear in upcoming patent applications

Paul asked whether or not a neutral, academic third-party is necessary to take the confrontational edge off these types of gatherings? Chris – such a third party is not necessary because cooperative stakeholders can speak candidly on mutually beneficial goals without confrontation Further Recommendations:  Asia has a number of in-house patent attorneys – they should visit examiners at the individual offices to see what is being done at each office  Ensure that applications are being drafted correctly – problems might not all be the examiner’s fault. What can we do to better facilitate the application drafting process?  Make application guidelines and examination handbooks available in English so that drafters can write more effective applications  Sit down with industry insiders to discuss problems and how we can address them in the short, medium and long terms  Consider remedies to treat delays in granting patents; e.g. the US provides a patentee the option to gain some of his protection time back (to recoup more of his R&D investments)  Regional cooperation is crucial – consistency across ASEAN members’ IP frameworks will instill confidence in investors’ minds as they consider applying for patents in the region  Stakeholder meetings should be industry-specific to effectively discuss specific technologies, and focus on front-end matters (i.e. how examiners are treating applications)  Rather than one firm offering such seminars, industry associations could take charge to ensure fairness and legitimacy

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Dr. Usanee, Advisor, Chulalongkorn Intellectual Property Institute – Agent Capacity Key Points:  Crucial to build awareness in academia (i.e. throughout the university’s departments)  Clarify and simplify application requirements – provide guidance on the IP manuals so that professors can prepare adequate applications – train them to use patent searches  Patent agents are important – claims are very difficult to file  Collaboration and cooperation between offices and local universities is essential – a multi-disciplinary approach is required to effectively address constantly changing technologies and universities typically have expertise in multiple disciplines

Khun Kajit responded with the following concerns:  MOUs have been signed with 15 universities but the focus is too narrow  Government has incentivized professors in the past by making ‘patents granted’ a key performance indicator for promotion. However, confusion ensued as it takes so long to acquire the grant. Subsequently the KPI became ‘patents filed’. This resulted in a great deal of filing; however, increased quantity came at the cost of diminished quality  We need an IP curriculum in order to increase awareness locally  Some ‘patent attorneys’ in Thailand are not up to international standards  The DIP is not the best organization to educate patent agents due to a conflict of interests – agents should seek to make patents as general as possible whereas the DIP examiners should seek to make patents as narrow and specific as possible. Therefore, the universities are better suited to serve as trainers  Collaboration is made more difficult because good university professors are too well paid to be happy with government pay for their work on patents or patent training  Enforcement is another big issue – a few months after a product comes out, you see the same thing all over the market – enforcement is not effective, but this is beyond the capacity of DIP, which doesn’t have the human resources to actively hunt down infringers

Khun Darani, Co-Managing Partner, Manager Director of Intellectual Property, Tilleke & Gibbons International, Ltd. – Enforcement Key Points:  Focus should be on mediation (less time-consuming and costly) as opposed to courts  Many successes in Thailand with mediation  Goal is to reduce criminal cases regarding IP  Consider allowing partial oppositions and letters of consent

Ephifanio – the Philippines office hired mediators and set up a mediation office (strongly supported by the Supreme Court) Cambodia – doesn’t hire mediators – only the IP officer talks with the applicant Paul – do other offices have IP Courts, and are they helpful? – Only Thailand at present. Paul – what are the special needs of the newly established offices in Laos and Myanmar. Are their specific needs we can address?

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Souligna – Other offices should provide their IP policies, frameworks, procedures, handbooks to Laos to assist the latter in establishing its operations. Other needs are help in drafting legislation and training officials In summarizing the discussion and closing the meeting Paul invited additional information and comment to be sent to: [email protected]

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WORKSHOP SUMMARY “Comparative Assessment Study of Patent and Trademark Offices in Southeast Asia” Plaza Athénée Hotel, Bangkok, June 7, 2011

Summary and wrap-up by Mr. Paul Wedel Procedures  What are the best search tools that make sense in-country and regionally?  How can we make sure that the patents are of a high quality (in addition to processing the quantity of patents)?  How can efficiency be raised? What are the small steps that can lead us to progress?  Is the Global Patent Index a solution for the region?  Metrics are crucial – we need consistent metrics across regional offices in order to determine progress that has been made and where/how to move forward with assistance  Common problem seems to be the expense of commercial databases – how is this overcome?  Should Malaysia and Philippine’s experiences in expanding staff, streamlining procedures and digitizing that led to decreased backlog be used as the benchmark that Cambodia requested?  Formed paragraphs/standard language moving forward might help with integrating common ASEAN platform  Can member states establish US-modeled ‘dashboard’ to facilitate progress?  How do we streamline/tailor technical assistance to meet specific country needs? A challenge to EPO, USPTO and JPO

Administration  How to improve the quality of applications submitted?  Based on the success of the autonomy of the IPOs in Malaysia and the Philippines, what can we learn and how can we move towards autonomy in other countries? Can this be made part of an ASEAN agenda?  What is the best way to engage the stakeholders? Private sector stakeholders have much to contribute in terms of technology updating and improved processes. How do we treat them as clients but not face in a controversial manner or create conflicts of interest?  What is the best way to use this report to advance IPO development agendas?  How do we develop a regional platform (e.g. AEC) to facilitate more effective large- scale training/assistance from partners?  How can IP offices coordinate and cooperate more effectively with universities (office brings patent knowledge while university brings technology/science expertise)?  How do we raise public awareness of IP and its importance in national development?

Staff Capacity  How to attract and retain qualified examiners?

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Enforcement  Mediation has worked well in several countries as it is peaceful, less time-consuming and inexpensive – is this model applicable across ASEAN?  Are IP Courts a good model?

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Kenan Institute Asia Queen Sirikit Nation Convention Center 2nd Floor, Zone D, Room 201/2 60 New Ratchadapisek Road, Klongtoey, Bangkok 10110 Tel: (662) 229 3131, Fax: (662) 229 3130 Website: www.kiasia.org Email: [email protected]