Smoothing the way for AI inventions in China

Written by Toby Mak

On 1 February 2020, the CNIPA brought its revisions on examining computer-related inventions (“New AIRelated Revisions”) into eff ect. These New AI-Related Revisions provide clearer guidance on determining whether a computer related invention is directed to patentable subject matter. They will be welcomed by the applicants as they should make patenting computer-related inventions easier, and the related prosecution smoother

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On 11 November 2019, the CNIPA published draft revisions to its patent examination guidelines for computer-related inventions (“New AI-Related Revisions”). Th ese were fi nalised on 31 December 2019, and became eff ective on 1 February 2020. In general, the changes follow the direction in the earlier revisions in 2017, reported in my article published in the August 2017 issue of the CIPA Journal. Specifi cally, as long as a claim has a technical feature like a computer-implemented step, a non-patentable subject matter objection should not be raised.

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This article was written by our IP Expert Toby Mak and originally published in the CIPA Journal.

The role of Intellectual Property in the development of a green future in the ASEAN countries

The COVID-19 pandemic hitting the entire world has provided big challenges for 2020. But this new problem should not make us forget the bigger picture, and the even bigger challenges: Climate change is now a reality, and we are all called to act to prevent the worst scenarios.IPday2020_Profile_picture_Social_Media_2

This is why this year the WIPO has decided to dedicate their World Intellectual Property (IP) Day 2020 to a green future, focusing on innovation — and the IP rights (IPR) that support it.

The IP community should work together to foster green innovation, especially in developing countries.

In this examination, we are going to try to understand the current role of green technologies in the ASEAN countries, and at the same time, see how IP can fit into the picture.

It’s no secret that in recent years, Asia has based its economic growth on a ‘grow now, clean up later’ model. Economic success has come at a high environmental cost. Taking Indonesia as the main example, we can see that deforestation and peatland burning are major sources of greenhouse gas emissions and drivers of biodiversity loss. While an increasing number of countries have committed to phasing out unabated coal use, Indonesia’s 2014 National Energy Policy envisages nearly doubling it by 2025 (compared to 2015 levels) to achieve an affordable electricity supply for all.

Pollution is not just putting pressure on the natural capital of the country, but could ultimately put the economic development and the wellbeing of its citizens at risk.

This is not just unacceptable from a moral standpoint, it’s also highly inconvenient from an economic point of view.

This is why we are starting to see a slight change in attitude towards green technologies from the peoples and the governments of the ASEAN nations.

According to a report by Clean Energy Pipeline (quoted by Intern Asia), investments in solar projects in Southeast Asia increased at an annual growth rate of 8 % between 2010 and 2014.

Since there are still 70 million ASEAN citizens without access to reliable electricity, the potential for renewable energy is huge — and solar energy is one of the best solutions.

Energy production is one of the main focuses of green development, but it’s not the only one. Waste management, water purifying, clean building and smart cities are among the top priorities. There is also an increase in demand for ‘green’ products from consumers that are developing an environmental consciousness.

This huge demand for new technologies and innovative solutions also provides an opportunity for SMEs to contribute to a greener future.

As the WIPO suggested, ‘Transitioning to a low-carbon future is undoubtedly a complex and multi-faceted endeavour. But we have the collective wisdom, ingenuity and creativity to come up with new, more effective ways to shape a green future and the IP system has a pivotal and enabling role in supporting us on this journey.’

IP alone cannot ‘make the innovation happen’, however, without IP an innovation framework would be doomed to collapse.

It cannot be doubted that fostering and protecting innovation is one of the main functions of IPR. Without IP protection, investments in intangible assets would be less secure; these assets could not be claimed, protected or traded. In other words, if any competitor can use intangible assets without an investment, no investor will be willing to risk their capital.

This is especially true for patents. Patents ensure inventors have the exclusive right to exploit an invention; this form of commercial reward can potentially encourage companies to invest in new, clean and efficient technologies. On the other hand, patented technologies are disclosed to the public, this ensures that the technical knowledge surrounding invention research is publicly accessible and can inspire further innovation. The WIPO and many IP offices around the world, including the European Patent Office (EPO), have implemented better databases to promote the dissemination of information regarding green tech and, in the end, the development of new inventions.

Patents are also pivotal in the business strategy of many green companies; they do not just attract and secure funding, they are also a source of revenue (through patent licensing and technology transfer agreements, non-commercial licenses and other arrangements).

Collaboration between government and startups has been seen to help meet climate challenges while growing small businesses. It’s not a huge surprise, but it’s still worth noting, that US-based startup patents in green-tech development tend to rise by 73 % when there is a collaboration with government behind them.

However, when it comes to the international exploitation of patents, some caution is needed.

IP protection is territorial, this means that your patented invention is not automatically protected in the world, while it’s disclosed worldwide. Therefore, preparing a good international patenting strategy and/or putting in place additional protections, for example wrapping your technology in Non-Disclosure Agreements, is of paramount importance.

Also keep in mind that free technology transfers are not always encouraged by ASEAN governments that prefer to keep some form of control over them, for example by imposing registration obligations on contracts.

Moreover, according to the TRIPS Agreement (here), national laws can provide exceptions to the exclusive rights conferred by a patent, as long as they are not unreasonable and properly balance the expectations of the patent owner and those of third parties. Some countries, including Indonesia, have taken advantage of this provision to impose some form of compulsory licenses.

As mentioned, instead of patents you can rely on trade secrets to protect your new technologies. This is particularly useful for SMEs as trade secrets don’t need to be registered, so they don’t have cost implications or time limitations. However, trade secrets provide weaker protection, and the best strategy is probably to combine patents with trade secrets.

As a general rule, a good IP strategy is not limited to patent protection — and the green sector is no exception.

Design protection can, for example, play a very important role in providing protection from copycats and cheap reproductions. A small change in the design of a product can significantly change its performance in terms of energy use (for example in vehicles or aircraft). In ASEAN countries, protection for industrial designs is quite sophisticated and is usually less constrained and easier to obtain than patent protection.

Software and, in particular, Artificial Intelligence have, and will have, an important role in the development of new solutions for a green world (for example, helping to measure and regulate demand, and offering energy-optimizing resource use).

From the traditional viewpoint of IP law, software is protected as a literary or artistic work under copyright. This is not the time nor place to discuss if copyright is the best way to protect software and the problematic topic of the patentability of computer-based inventions. Let’s work with what we have.

The good news is that thanks to the Berne Convention copyright does not entail any formal registration process and arises automatically upon the completion of the work. This protection should be ensured in every country that is a member of the convention (including ASEAN ones). However, registration is advisable as it provides proof of ownership in potential conflicts.

As mentioned, the green economy also means that greener options are available to consumers. In ASEAN countries, the middle class is developing an interest in healthier foods. This includes many European Geographical Indications (GIs), as they are perceived to be natural and good. GIs, as well as attracting consumers, also provide a good way to uphold sustainable production standards.

Finally, do not forget the power of branding! Your trade mark is your value and your reputation, if you manage to build a strong bond with your consumers and market yourself as a legitimate ‘green brand’ you will acquire more and more customers that share your values.

However, do not forget that the best trade marks are the distinctive ones. Simply adding ‘green’ to your name might convey a good message, but it can be deemed to be a descriptive element and hinder your trade mark protection. It’s always better to choose trade marks that, as well as being connected to green topics, have a more distinctive flavour. Think about plants, animals or even rocks … be creative!

It’s worth noting, that if you claim to be green and clean you should be. Otherwise, you will not just be betraying the consumers’ faith, but also breaking consumer protection laws.

Protecting your brand and registering your trade marks is even more important when doing business in areas like SEA where counterfeiting is rampant. Registering a trade mark early is the first, and sometimes also the most effective, step towards protecting yourself.

To sum up, a good IP strategy can foster growth in every sector, in particular in fast-developing industries like green tech. Be ready and do your bit.

Happy IP Day!

 

South-East Asia IPR SME HD: https://www.southeastasia-iprhelpdesk.eu/

 

WIPO World Intellectual Property Day 2020 – Innovation for a Green Future: https://www.wipo.int/ip-outreach/en/ipday/2020/green_future.html

 

AIPPI Report on Intellectual Property and Green Technology, 2014: https://aippi.org/enews/2014/edition38/images/reports.pdf

 

OECD Green Growth Policy Review, Indonesia 2019: https://www.oecd-ilibrary.org/sites/1eee39bc-en/index.html?itemId=/content/publication/1eee39bc-en

 

ASEAN fast becoming a renewable energy hub: https://theaseanpost.com/article/asean-fast-becoming-renewable-energy-hub

 

Eurocham Vietnam Greenbook: https://www.eurochamvn.org/node/16988

 

The Role of IP Rights in Green Technologies Innovation: http://metispartners.com/2019/11/22/the-role-of-ip-rights-in-green-technologies-innovation/

 

Green technology in Asia: https://www.internasia.com/Green-technology-Asia

 

Environmental issues are top priority for Asia’s youth: https://www.eco-business.com/news/environmental-issues-are-top-priority-for-asias-youth/

 

Compulsory Licensing Procedures in Indonesia Revised: https://www.rouse.com/magazine/news/compulsory-licensing-procedures-in-indonesia-revised-again/

COVID-19 and overwhelming amounts of counterfeits online: What businesses should do — right away!

Written by Xuan Nguyen

 

According to an update from the World Health Organization (WHO), by 15 April 2020 the coronavirus disease (COVID-19) had already infected 1 918 138 people in 213 countries, territories and areas, resulting in 123 126 deaths. Various governmental interventions have been applied, including border closures, strict quarantines, travel bans, and the forced closure of many businesses. 

It is expected that a deep economic crisis will follow the pandemic (which is still evolving and unpredictable). So far a dramatic slump in economic activities has been witnessed, affecting not only the supply chain (production of goods and services) but also demand (consumption and investment). Many people are forced to stay at home, factories have stopped operating, restaurants, shops and public places are closed. Consumers are being driven toward online shopping marketplaces. While major parts of the world, including, Europe, the USA and a lot of Asia, are struggling to fight against the crisis, in China the situation is now apparently under control and factories are gradually returning to normal.

Photo source: https://pixabay.com

Photo source: https://pixabay.com

The current situation has also created fertile ground for the sale of counterfeit goods online, especially in sudden upsurge sectors such as pharmaceuticals and medical devices. According to Interpol, during one week of action (3–10 March 2020), authorities in 90 participating countries seized more than 4.4 million units of illicit pharmaceuticals, more than 37 000 unauthorised and counterfeit medical devices, and closed down more than 2 500 web links, including websites, social media pages, online marketplaces and online adverts for illicit pharmaceuticals[1].

In South-East Asia all 10 countries have reported a substantive number of COVID-19 cases. Since there was already a high number of local counterfeit manufacturers available, and a significant trade exchange with nearby China, the region is very high risk in terms of counterfeits invading the market. Recently, Thai police seized 45 000 fake COVID-19 test kits, 350 000 medical masks, and 1 200 infrared thermometers that were smuggled into the country by two Chinese men. All products sold online claiming to be COVID-19 test kits at the moment are fake, according to the Thai Food and Drug Administration (FDA)[2].  Vietnamese authorities also found that a company in Vietnam had been making masks out of toilet paper amid the coronavirus outbreak and skyrocketing demand[3].

These figures are just the tip of the iceberg. There are overwhelming numbers of counterfeit products. This article will discuss how counterfeits are being fueled by an online market and what the brand owner should do to mitigate the impact.

Why have counterfeits surged in the shadow of the COVID-19 outbreak?

  • The COVID-19 crisis has resulted in a spike in demand for essential products, such as personal protective devices (facemasks, hand sanitizers and antiviral medication), vitamins, pharmaceuticals, foods and beverages, as well as non-essential products, such as cosmetics and personal care items, household products, electronics, work-from-home tools, entertainment technology and children’s toys. Meanwhile, the majority of factories are being shut down, causing the shortage of supplies of genuine products. ‘In moments of high demand and rushed buying decisions, counterfeiters can jump on the opportunity and sway buyers in their direction[4].’
  • People are shopping online much more than ever. According to analysis by ACI Worldwide, ‘The COVID-19 crisis is driving the global growth of e-commerce sales, with millions of consumers worldwide in quarantine shopping for goods, services and entertainment online. Transaction volumes in most retail sectors have seen a 74 percent rise in March compared to the same period last year.’ The dark side of this phenomenon is that people can be more easily tricked. Many sellers use photos of genuine products while offering extremely low prices to attract online buyers during a time of crisis, and then provide fake products to consumers. It can also create a backlash for brand owners, leading consumers to mistakenly believe the product quality is very low and to lose interest in the brand.
  • The crisis has caused an immediate reduction in the income of many people across the globe, and consumers are looking for the cheapest possible versions of goods because of their reduced budgets. While the pandemic is still evolving, millions of people have lost their jobs following business restrictions and closures. According to a report by the International Labour Organization (ILO), if we are experiencing a ‘“High” scenario where COVID-19 has serious disruptive effects, reducing GDP growth by around 8 percent: Global unemployment would increase by 24.7 million, with an uncertainty ranging from 13 million to 36 million[5].’ Given the current environment of uncertainty and fear, and the real threat of significant declines in income, consumers in many economies are unable to purchase branded goods and services as before; buying cheap counterfeit products can be a tempting option.
  • Many counterfeit suppliers are concentrated in China where the situation is under control and factories have gone back to their normal operations. This means counterfeiters may be in a better position to jump onto the upsurge in demand before legitimate sellers can reopen production. Amid the panic of the crisis, a lot of companies, especially small and medium-sized enterprises (SMEs) are concentrating on solving critical issues such as declines in revenue, insolvencies and job cuts, rather than keeping an eye on monitoring the marketplaces for fakes. As a result of the lack of the legitimate owners’ attention, counterfeiters can more easily flood the market with fakes.
  • Customs checks, market investigations, and raid and seize activities have been reduced following social distancing and safety measures. In the same way as many other public services during this health crisis, officers involved with anti-counterfeiting activities have been physically limited to avoid the risk of infection. This means that infringers have more opportunity to take a free ride on the market.

What should brand owners do?

During volatile market conditions and the resulting increase in online shopping, consumers easily become targets for counterfeiters. Brand owners need to stay on top of monitoring and combating fakes more than ever. Otherwise, they may lose sales to counterfeiters.

  • Focus on monitoring e-commerce and social media platforms and proactively communicate with the customers. During the current social distancing measures and travel bans, a majority of customers has been using the internet for buying stuff instead of shopping physically, you need to keep a close eye to the net to protect your revenue and maintain safe channels for your business during the crisis, and after it ends. When some sectors have a spike in demand while genuine supply chains are being disturbed, fakes become a more serious issue. Brand owners should be more protective about their communications with their consumers, guiding them to available supply channels with authentic products and warning them about fakes.
  • Conduct an investigation and gather facts. Don’t make a groundless claim, it will cost you both time and money. Once you have found a suspected infringement on the internet, the first step is to quickly collect evidence on the infringer, e.g. basic information (name, address, other contact details, the scale of their business and the origin of their products).
  • Take-down Notices and Warning Letters: Utilise the available complaint functions on the e-commerce platforms and encourage social media operators to quickly take down infringing products. In the meantime, as a legitimate brand owner, you can also consider sending Warning Letters to the counterfeiter to ask them to stop their illegal activities.
  • Inform the competent authorities: In South-East Asian countries, local governments have recently made many efforts and improvements in combating online counterfeits. Brand owners can find available complaint tools — such as hotlines, emails or complaint submissions on the websites of customs, market police departments and other relevant national bodies — to promptly notify the authorities.
  • Seek advice from local IP experts. In critical cases, companies are usually advised to consult with local experts that are familiar with infringement cases and have close relations with enforcement bodies such as customs, investigators and the police. It is worth noting that many counterfeits are advertised in local languages or posted on local websites, so monitoring using detection software or search tools (usually in Roman characters) doesn’t work effectively.

The COVID-19 pandemic is unprecedented. Our lives, and the way we do business, have changed in recent weeks. Brand owners should swiftly adapt to the new situation to protect their businesses against counterfeiters. Neglecting this during the crisis might cost you more than you imagine, i.e. from losing your faithful customers to losing your entire share of the market. Keeping your company safe amid the chaos, and getting ready for normal business to resume, is the only way to retain both your revenue and your reputation.

[1] https://www.interpol.int/en/News-and-Events/News/2020/Global-operation-sees-a-rise-in-fake-medical-products-related-to-COVID-19

[2] https://thethaiger.com/coronavirus/big-arrest-on-price-gouging-of-covid-19-safety-gear-and-fake-test-kits

[3] https://www.insider.com/vietnam-company-using-toilet-paper-for-coronavirus-masks-faces-penalty-2020-2

[4] https://www.redpoints.com/pdfs/market-research-impact-of-covid-19-on-ecommerce-sales/?utm_campaign=HS284-market-research-survey-impact-of-covid-9-on-ecommerce-sales&utm_medium=email&_hsmi=84691783&_hsenc=p2ANqtz-_KXO0X8sOU11ZaL9gXi53LxFBQjYdtj-ZtCHwLlocKYxHxgibn05yKKsXyfyIzVAccGKAF&utm_content=84691783&utm_source=hs_automation

[5] https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/briefingnote/wcms_738753.pdf

EU–Singapore FTA: Highlight of improvements on intellectual property

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WRITTEN BY XUAN NGUYEN

 

Singapore and the EU are key trading partners. The EU is Singapore’s third-largest trading partner in goods, accounting for 10 % of its total trade with the world. Singapore is the EU’s largest trading partner in ASEAN, representing close to a quarter of the total EU–ASEAN trade in goods and over half of the EU–ASEAN trade in services. Over 10 ,000 EU companies are established in Singapore, and use it as a hub to serve the whole South Pacific.

The EU–Singapore trade and investment protection agreements were signed on 19 October 2018. The trade agreement entered into force on 21 November 2019, while the investment protection agreement will enter into force after it has been ratified by all EU Member States according to their own national procedures.

Photo (create by piktochart)

The trade agreement is expected to increase opportunities for cooperation, and foster future growth and progress for all the parties involved. In the immediate future, the companies will benefit from the removal of tariffs and non-tariff barriers to trade in goods and services, the liberalisation of investments and public procurement, and a boost in competition and sustainable development. In addition, the agreement contains important improvements on intellectual property (IP) protection that will contribute to strengthening the position of Singapore as one of the most profitable and secure destinations in Asia for business investment and the expansion of EU companies.

Following a commitment in the agreement, Singapore has strengthened its existing Geographical Indication (GI) protection regime by setting up a system that allows GIs to be registered. The agreement contains one annex with a list of 196 European GIs that will be applying for protection in Singapore. Champagne from France, Parmigiano Reggiano from Italy, and Scotch Whisky from Scotland are some examples of iconic EU GIs to be protected in Singapore. EU GIs will enjoy the same level of protection as in the European Union. In the long run, better protection by Singapore’s authorities will also raise local consumer awareness around authentic, top quality GI products from the EU. As of 1 February 2020, a total of 139 European GIs (mainly covering wines, spirits, foodstuffs, and agricultural products) have been registered in Singapore.

Regarding copyright, the agreement provides for equitable payment for both performers and producers of recorded music played on the radio, TV or in places open to the public (such as shops, restaurants, bars). This will be implemented within two years of the trade agreement entering into force.

The enforcement chapter sets out detailed provisions on civil enforcement measures, including general obligations related to the availability and the application of these measures, provisions on preserving evidence in disputes, injunctions, damages and on the liability of intermediary service providers.

With regard to border enforcement, EU companies can now request that Singapore’s customs seize counterfeit trade mark goods and pirated copyright goods. Within three years from the entry into force of the trade agreement, holders will also be able to request that Singapore’s customs seize counterfeit GI goods and goods with pirated designs when they are being imported or exported.

Singapore and the EU also committed to putting ex officio procedures by the authorities into action. This means that the authorities may act on their own initiative to suspend the release of counterfeit trade mark goods, pirated copyright goods and counterfeit GI goods. With regard to counterfeit GI goods, Singapore will implement this commitment within three years of entry into force of the trade agreement.

The agreement aims at creating favourable conditions and a sustainable environment for EU companies to take full advantage of the opportunity Singapore provides as a business and transport hub in South-East Asia.

Singapore has a very comprehensive and robust IP framework, which is considered to be one of the best in Asia, and the best in South-East Asia. The supplementary commitments on IP protection and enforcement in the agreement will further reinforce Singapore’s competitive position, attracting more investment for innovation and start-up activities from EU companies.

Reference: https://ec.europa.eu/trade/policy/in-focus/eu-singapore-agreement/