IP Considerations in the Medical Device & Healthcare Industry in South-East Asia

the-device-1822457_1920In today’s blog post we are discussing how to best protect your IP in the medical device and healthcare sector in South-East Asia. You will learn more about patent protection, design protection and trade mark protection in this industry. Since medical device and healthcare industry is very R&D intensive, we are also discussing how to protect your IP while conducting R&D activities in South-East Asia.  

Rapid demographic changes and health reforms within South-East Asia are expected to create enormous demands in the health care market in the near future. Growth in average annual healthcare expenditure between 2014-18 is expected to be around 11% of GDP in ASEAN – but with highly varied rates among the countries: Vietnam with the highest at 6.6% and Myanmar with the lowest at 1.8%.[1] At the same time, amongst many South-East Asia countries, local pharmaceuticals are not well trusted, making way for foreign players with strong brands to establish significant market share in South-East Asia. This offers many promising business opportunities for the European SMEs engaged in medical device and healthcare industries, as European brands with high and positive brand recognition are expected to be favored by local governments and clinicians over their lesser-known competitors.

The healthcare industry in South-East Asia also serves a rapidly growing medical tourism industry which is expanding globally at a rate of about 25% and it is claimed that nearly a third of all medical tourists in the world receive medical attention in South-East Asia[2]. Furthermore, many South-East Asian countries like Thailand and Singapore aspire to become the medical and healthcare hubs in the region, offering various opportunities for the European SMEs.

Even though, IP laws and regulations have improved a lot in South-East Asia over the past five years, counterfeiting and other IP violations are still commonplace in the region. EU SMEs would therefore benefit from understanding the different intellectual property rights that are relevant to the medical device & healthcare industry and determine the effective way to protect their IP rights in South-East Asia.

Apply for patents to protect your inventions

Medical device companies are driven by innovation and inventions that involve significant research and development costs. Compared other industries, the medical device industry invests more of its yearly revenues into product innovation, which reflects the competitive nature of the industry, and constant innovation and improvement of existing technologies.

For medical device companies to protect themselves against market failures and prevent others from selling duplicate products, registration of patents rights is vital. Generally, for an invention to be patentable, it must meet the following three requirements: novelty, inventive step, and industrial applicability.

By registering a patent for the innovative aspect of the product, the medical device company will be able to:

  • create legal barriers to entry for competing medical devices by preventing others from copying, selling, or manufacturing the patented product
  • license the patented invention to generate revenue
  • enhance the value of the company by building equity in the company and creating assets that may attract other investments

Besides protecting inventions via traditional patent registration, medical device companies may also wish to explore protection of their products under a different type of IP right known as utility models or simple patents. Many South-East Asia countries, including Cambodia, Indonesia, Laos, Malaysia, Philippines, Thailand and Vietnam accept registration of “simple patents” as opposed to standard invention patents. In Malaysia and Laos, a lesser degree of innovation is required for simple patents; in others, like Indonesia, Philippines, Thailand and Vietnam, no inventive step is required at all. Thus, companies that develop medical devices, which have minor improvements or adaptations to existing products and are low in inventive step should consider utility models or simple patent registration.

The extent of patent protection of software that enables smart diagnostic equipment is not yet well established in the South-East Asia region. In the Philippines and Thailand, it is explicitly provided in IP laws that computer software or programs are not patentable. On the other hand, in some countries, like Singapore and Cambodia, software may be protected by patents if they fulfil specific conditions. Another issue with patenting diagnostic equipment is that medical diagnostic methods carried out by the equipment on a living human or animal body are generally not patentable in South-East Asia.

Protect your design with design patents

Medical device companies should also include industrial design registration as part of their overall IP strategy. Medical devices that deliver medicinal products can be, and are very often, protected by registered designs. Registering the design of a device is a relatively fast and inexpensive way of protecting the entire three-dimensional feature of the medical device or parts of its design. Such registration can be used to stop competitors making or selling a similar looking product. The relatively quick registration rate of industrial designs allows the rights owner to prevent sale of imitations by counterfeiters when the corresponding patent application is still pending and cannot be enforced. Industrial designs have been registered for medical devices in South-East Asia include blood sampling devices, diagnostic devices, implant delivery tools and respiratory masks.

Don’t forget to protect your brand

Trade marks is a business asset that businesses can rely on to provide long term competitive differentiation amongst their competitors. Historically, brands have promised quality and reliability, features that are especially valued in the medical device & healthcare industry where products and services directly affect the well-being of the user. Branding is thus essential in the medical device and healthcare industry. Securing ownership of the trade marks via registration of trade marks that will be used in the region is a crucial first step in ensuring the smooth implementation of the branding strategy.

SMEs should also keep in mind that registering a version of the trade mark in the local script used in the South-East Asian countries of interest is strongly recommended because registering trade mark in Roman alphabet does not automatically protect the brand name in local script. Furthermore, in the absence of a brand name in local script, local people will most definitely come up with a name themselves, which might not be favorable to the company.

R&D and joint product development: How to protect your IP

With the growing demand for medical devices and healthcare options, South-East Asia region is becoming a hub of research and innovation activities. In the field of medical devices and healthcare, few local governments, for instance as in the case of the Singapore, Thailand and Malaysia, governments have launched a series of incentive schemes, including tax-relief and training grants towards attracting foreign medical device manufacturers.

EU SMEs intending to establish R&D operations in the South-East Asia region will need to have an IP strategy that anticipates and manages IP issues arising from the research. Ideally, the IP strategy addresses issues relating to ownership of and right to use the IP, procedures for identification, evaluation, protection and management of IP, procedures for cooperation with third parties, guidelines on the sharing of profits from successful exploitation; and mechanisms to ensure respect for third-party IP rights.

An effective IP strategy would include measures to:

  • Ensure that all externally sourced research or software is properly licensed, and that the ownership and direction of all IP is clearly laid out from the start.
  • Establish clear ownership of copyright material, such as test results, and the creation of data. Test results can significantly steer research direction and affect the commercial life of products. It is also important to keep such information confidential so that it doesn’t fall into competitors’ hands.
  • For R&D conducted in collaboration with local research institutions and universities, or together with other companies in the private sector, ensure that the ownership of intellectual property arising from the research is clearly defined between all parties before research takes place. This can be regulated by written contracts among the parties. It is also very important to regulate the ownership of IP that can derive from improvements of applied research. As a practical tip to avoid issues of joint ownership of IP, when possible, EU SMEs may wish to arrange for the IP to be owned by the company paying for the research.
  • Ensure that all parties involved in the research collaboration are notified before allowing the research institute/university to publish academic papers relating to the research. The publications must also be reviewed to ensure that they do not compromise the patentability of the technology

South-East Asia IPR SME Helpdesk Team

SEA IPR logo

The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@southeastasia-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The South-East Asia IPR SME Helpdesk is co-funded by the European Union.

To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/.

[1]https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/life-sciences-health-care/sea-lshcpredictions-2020-sea-supplement-noexp.pdf

[2] http://sea-globe.com/southeast-asians-drive-medical-tourism/

Leave a Reply