IP protection in the South-East Asia region: What EU SMEs should know

Why is IP protection important for EU SMEs?

Small and medium-sized enterprises (SMEs) are the backbone of the EU economy. They represent 99 % of all businesses in the EU, account for more than half of Europe’s gross domestic product (GDP) and employ about 100 million people[1]. The positive association between economic performance and ownership of intellectual property rights (IPRs) is particularly strong for SMEs.

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SMEs that own IPRs generate 68 % higher revenue per employee than SMEs that do not own any IPRs at all, according to the latest study published in 2021 by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) on IPRs and firm performance in the EU [2]. As the study shows, IPR protection has become crucial to the success of SMEs, and it is thus key for SMEs to be aware of the value of intellectual property (IP) and of the best ways to benefit from it.

IP relates to intangible assets, which comprise intellectual and industrial property. IPRs can be protected by law under patents, trade marks, industrial designs, copyright, plant variety protection, but also via trade secrets, unfair competition, civil and criminal law.

SMEs can benefit from IP protection and seize business opportunities globally if their IP portfolio is managed effectively. A strong IP strategy also helps SMEs attract funds from potential investors, enabling them to internationalise in emerging markets. According to a joint report between the EPO and the EUIPO in 2019[3], IPR-intensive industries generated approximately 45 % of the total GDP in the EU, worth EUR 6.6 trillion. Those sectors also accounted for most of the EU’s trade with the rest of the world, comprising 96 % of goods exported from the EU.

IP protection is also crucial to fostering innovation by providing a return on investment on Research and Development (R&D). Furthermore, a well-prepared IP protection strategy will help SMEs prevent others from free-riding on their IP. Importantly, an SME, being the legitimate owner of IPRs, will have recourse to enforcement actions to stop an activity infringing their IPRs.

IP protection is the key to success of EU SMEs expansion in the SEA region[4]

Southeast Asia (SEA) region is a promising destination for EU SMEs, thanks to their open policies and incentives for attracting foreign investment. The region is a thriving economy with a combined GDP of USD 3 trillion in 2018 (the 5th largest in the world) and a population of 649.1 million people[5].

The SEA region represents the EU’s 3rd largest trading partner outside Europe (after the US and China) with more than EUR 237.3 billion of trade in goods in 2018. The EU is the SEA region’s 2nd largest trading partner after China, accounting for around 14 % of SEA trade. The EU is by far the largest investor in the SEA countries with the Foreign Direct Investment (FDI) stocks in the SEA region accounting for EUR 337 billion[6].

To date, the EU has two Free Trade Agreements already in force with Vietnam and Singapore, respectively – EU-Vietnam Free Trade Agreement (EVFTA) and EU-Singapore Free Trade Agreement (EUSFTA) – and is negotiating a comprehensive economic partnership agreement with Indonesia. These FTAs facilitate market access through the elimination of customs duties and non-tariff barriers from both sides, as well as stimulating investment flows. Each Agreement includes a comprehensive IPR chapter with commitments to enhance IPR protection and enforcement in line with international standards.

The report of the Organization for Economic Co-operation and Development (OECD) and the EUIPO published in 2019[7] shows that companies suffering from counterfeiting and piracy continue to be primarily registered in Europe. China continues to be the biggest origin of counterfeit and pirated goods, but some of the major SEA economies are also listed among the top 25 provenances. As the study shows, the exposure of EU SMEs to IPR infringements in the SEA region is high; and EU SMEs should consider this when preparing their IP strategy.

In the COVID-19 context, IP infringement in the online environment appears to be increasing in SEA countries, via e-commerce and social media platforms, due to the lack of effective regulations addressing online IP violations. IP owners are advised to seek registration for protection of their IPRs in each country of interest. Registration at the IP Offices and in the customs registers may contribute to successful enforcement.

Stay tuned to IP Key South-East Asia and South-East Asia IP SME Helpdesk for success stories of EU SMEs operating in Southeast Asia and how IPR protection supports these businesses during the pandemic.

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How is the European Union supporting EU SMEs in SEA?

On top of bilateral trade agreements introducing commitments for enhanced IPR protection and enforcement, the EU counts on IP Dialogues and IP technical cooperation programmes to support EU businesses trading and investing in the region, including SMEs.

The European Commission (EC) launched, among others, the following initiatives to support EU SMEs.

South-East Asia IP SME Helpdesk (website here)

The South-East Asia IP SME Helpdesk is an initiative of the EC to support EU SMEs to protect and enforce their IPRs in SEA. All services offered by the Helpdesk are free of charge.

In a nutshell, the Helpdesk’s services cover (i) Enquiry Helpline (tailor-made confidential advice to EU SMEs on IP related to SEA within 3 working days), (ii) IP Guides and Country Factsheets and (iii) Onsite and online Trainings. The South-East Asia IP SME helpdesk is part of the IP SME Helpdesk initiative which EU/COSME SMEs and researchers participating in EU-funded projects both to protect and enforce their Intellectual Property (IP) rights in relation to Europe, China, India, Latin America and South-East Asia.

IP Key South-East Asia (website here)

IP Key South-East Asia (IP Key SEA) is a four-year programme funded by the EU and implemented by the EUIPO aimed at supporting IP rights protection and enforcement across South-East Asia, with a view to creating the appropriate legal and economic environment conducive to trade and investment in the region. By contributing to the enhancement of IP frameworks and implementation of best practices, IP Key SEA aims to ensure a level playing field for both local enterprises and EU stakeholders. IP Key SEA is one of three IP Key flagship programmes that are being implemented by the EUIPO, together with IP Key China and IP Key Latin America.

Other incentives for EU SMEs

EU SMEs now can apply for assistance to protect their IPRs under the following programmes:

  • The Ideas Powered for Business SME Fund: a 20 million Euro grant scheme created to help SMEs develop their IP strategies and protect their IPR, at national and EU level (more details here).
  • Horizon IP Scan: Helping SMEs manage and valorise IP in research and innovation collaborations (more detail here).

#KNOWBEFOREYOUGO

IPR protection in SEA is crucial for EU SMEs to ensure a safe ground for their business activities. Without protection, enforcement of the IP rights will not be possible. Therefore, it is highly advisable for EU SMEs to make an effective use of the various EU initiatives to set up their IP strategy before expanding to the region. Get in touch with the SEA IP SME Helpdesk (question@southeastasia-iprhelpdesk.eu) and IP Key SEA (IPKEY-SEA@euipo.europa.eu) to learn more about the available tools.

Drafted by:

IP Key SEA & South-East Asia IP SME Helpdesk

EN IP Key SEA 1200x675_02                                     

[1]https://ec.europa.eu/growth/smes_en#:~:text=Small%20and%20medium%2Dsized%20enterprises%20(SMEs)%20are%20the%20backbone,every%20sector%20of%20the%20economy.

[2]http://documents.epo.org/projects/babylon/eponet.nsf/0/7120D0280636B3E6C1258673004A8698/$File/ipr_performance_study_en.pdf

[3] https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/IPContributionStudy/IPR-intensive_industries_and_economicin_EU/summary/IP_Contribution_Report_092019_execsum_en.pdf

[4] The South-East Asia (SEA) region consists of 10 countries, including Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam.

[5] https://www.aseanstats.org/wp-content/uploads/2019/11/ASEAN_Key_Figures_2019.pdf

[6] https://ec.europa.eu/trade/policy/countries-and-regions/regions/asean/

[7] https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/observatory/documents/reports/trends_in_trade_in_counterfeit_and_pirated_goods/trends_in_trade_in_counterfeit_and_pirated_goods_en.pdf

Thailand Joins Madrid Protocol

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On August 7, 2017, the Thai government officially deposited the instrument of accession to the Madrid Protocol with the WIPO, marking the starting date of the three-month period before the Protocol becomes effective in Thailand. Consequently, the Madrid System will come into effect for Thailand (the 99th member) as from November 7, 2017.

In its instrument, the government makes declarations on three issues. Firstly, a period to issue provisional refusal will be extended to eighteen months, with further extension possible in case of an opposition. Secondly, an individual fee to be specified in Ministerial Regulations to be issued by virtue of the accession will apply to international applications/registrations designating Thailand. Thirdly, recordal of a license agreements with the International Bureau will not be effective with regard to Thai applications/registrations.

After this deposition, the next step is to issue Ministerial Regulations to elaborate on the process. It is anticipated that the Regulations will contain the following details:

  • All documents submitted through the Thai Trademark Office to the International Bureau must be in English. If the Thai Office finds an international application incorrect or incomplete, the applicant will have to remedy it within 15 days upon receipt of a notice. Otherwise, the Thai Office may not be able to forward the application to the International Bureau within 120 days and the date of filing with the Thai Office will not be considered as the filing date of the international application. If the applicant does not comply with the Thai Office’s notice within 120 days, the application will be deemed abandoned.
  • For an international application designating Thailand, the Thai Trademark Office will translate the necessary content into Thai. In case of provisional refusal, the applicant is required to appoint an agent in Thailand to deal with it.  The response may have to be in Thai. In case of failure to respond, the Thai Office may partially accept the application for the goods/services in relation to which the refusal does not apply.

Continue reading “Thailand Joins Madrid Protocol” »

Enforcing IP Rights with the Customs in Vietnam: A Case Study

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shutterstock_118547785Border control can be an effective means for European SMEs for enforcing their IP rights in Vietnam, and it serves the purpose of preempting and suppressing IP counterfeits of SMEs’ products at Vietnam’s borders. Border control has gained more attention over the past few years from business owners wishing to protect their IP in Vietnam as the Vietnamese government recently granted the Customs more powers, making it more efficient.

Even though, Vietnamese Customs are actively looking for possible infringing products crossing the border of the country, it is advisable for the European SMEs to actively cooperate with the Customs authorities by recording their IP with the Customs and by actively monitoring the market and letting the Customs know of suspected infringing shipments, to fully benefit from the Customs protection.

How does Customs Protection Work

Vietnamese customs laws prohibit the importation of goods that infringe IP Rights, and Vietnamese Customs has the authority to impose fines on infringers and confiscate infringing goods for import. However, infringing goods for export are not subject to any penalties imposed by the Vietnamese authorities so far. If the infringement of IP Rights exceeds a certain threshold, the Customs authorities can also arrange criminal proceedings to be brought against the infringing party. Continue reading “Enforcing IP Rights with the Customs in Vietnam: A Case Study” »

China’s New Ecommerce Law: What this will mean for Consumers, Operators and Providers

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shutterstock_167099189Today’s blog post has been kindly drafted for us by our China IPR SME Helpdesk expert Mr. Daniel Albrecht from Starke Beijing. In this article, Mr. Albrecht gives a comprehensive overview on the latest changes in China’s new e-commerce law that will inevitably effect the activities of consumers, operators as well as providers. 

China’s Ecommerce Market 

In accordance to analysis by digital marketing researcher eMarketer, cross-border Ecommerce in China was due to hit USD 85.76 billion in 2016, up from USD 57.13 billion in 2015. Furthermore the China Internet Network Information Center (CNNIC) reported 710 million Internet users in June 2016. Notably, 40 per cent of China’s online consumers are buying foreign goods and eMarketer estimated the amount of money that each of them would have spent an average of USD 473.26 in 2016. 

If the projection that cross-border Ecommerce will have a compound annual growth rate of 18 percent through to the end of the decade — reaching an estimated USD 222.3 billion — will come true, the consequence would be that China’s Ecommerce market will catch up with those of the US, Britain, Japan, Germany and France combined by 2020. 

China’s New Ecommerce Law 

As the Ecommerce market is constantly changing and undoubtedly its major impact on social life and the current economy cannot be denied, it seems to be necessary to provide a legal framework to give answers to upcoming questions within the scope of Ecommerce. 

Hence a new Ecommerce law is in progress and drafts are waiting to be adopted. The new law shall remedy the current situation by promoting the Ecommerce market’s development, putting things straight and satisfying all the parties’ interests. These central ideas are laid out in Article 1 of the recent draft law and shall summarize simultaneously the political objectives pursued by this law. 

Continue reading “China’s New Ecommerce Law: What this will mean for Consumers, Operators and Providers” »

Prevention not cure: online IPR in South-East Asia

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shutterstock_167099189South-East Asia possesses a population of around 600 million people; of these, there were 203 million internet users in South-East Asia at the end of 2014.[1] While the share of internet users varies by country (Myanmar’s internet penetration equates around 1.2%, whereas in Singapore it is around 80%)[2], there is no doubt that internet use in South-East Asia is set to experience significant growth in coming years. Continue reading “Prevention not cure: online IPR in South-East Asia” »