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Patent strategies for the Asean region

John Walker / April 12, 2017
Patent strategies for the Asean region

Are you or your clients developing an international patenting strategy? You would certainly consider the world’s 7th largest economy, particularly when it is projected to become the 4th largest. This “regional economy” is ASEAN. So when one considers an “ASEAN IP strategy” one must consider what is meant by “ASEAN” and “Asia” as these terms can be often loosely interpreted or even used interchangeably. ASEAN is the acronym for the Association of South East Asian Nations. But what does this mean? First, ASEAN does not include China, Japan and Korea – part of the “IP 5”. Nor does ASEAN include “Western Asia” which broadly means west of Myanmar – an area that takes in India, Bangladesh and Sri Lanka. Further, it does not include the region often known as “Oceania” which comprises Australia, New Zealand and the Pacific Islands – the largest being Papua New Guinea. This analysis of Asia, by exclusion, results in the “ASEAN 10” – Singapore, Malaysia, Indonesia, Thailand, Philippines, Vietnam, Brunei Darussalam, Cambodia, Laos and Myanmar, and this is the region the subject of this review.

An economic perspective

Although comprising 10 smaller countries, the ASEAN region has the potential to become one of the largest economies and markets in the world – in itself enough justification to consider IP strategies in this region. As indicated previously, if ASEAN was a single economy it would be the seventh largest in the world (and third largest in Asia behind China and Japan), and if current growth trends continue then it would be the world’s fourth largest by 2050. 2015 GDP figures show 7 of these 10 economies in the top 40 of GDP growth rates with all of the current major economies well outside this top 40.  From a population perspective ASEAN’s potential market is greater than the European Union or North America – further justification, particularly as the regions GDP grows.

However, the region is not uniform in economic terms. Six of the members – Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand are more economically advanced than the other members. In fact, Singapore and Brunei Darussalam figure in the world’s top 10 for GDP per capita on a PPP (purchasing power parity) basis.
A major milestone in the regional economic integration of ASEAN occurred in 2015. This was the establishment of the ASEAN Economic Community (AEC). In short, the purpose and vision of the AEC is to create a single market and production base allowing for the free flow of goods, services, investments, labour and capital across the region. A region on the move!

A patent perspective

WIPO’s 2014 patenting statistics (the latest annual statistics currently available) provide an interesting insight into the region as a focus for developing a patenting strategy. Collectively over 42000 patent applications were filed in 2014 which makes the region slightly more “patent active” than Russia, or Canada, or Brazil. Of course, it only about 8% of US filings, 25% of EPO filings and 12% of Japanese filings. Another interesting statistic is that “local filings” represent only 12% of filings – much less than the 49% for US and EP, 78% for Korea, 82% for Japan, and 86% for China. Clearly foreign filing is the major focus of applications being examined in this region, and this factor directs the focus of this review.

In addition to pure filing numbers, other measures reflecting the more qualitative aspects of patenting are worth noting. One measure is the 2015 International Property Rights Index (IPRI) which is a measure of a countries “property rights” based on 10 factors across legal and political environment, physical property rights and intellectual property rights. This Index was calculated for 129 countries and ASEAN countries varied from Singapore (ranked 5), Malaysia (ranked 28) to Myanmar (ranked 129 – last). For comparative purposes, Finland was ranked at 1, Japan at 8, USA at 15 and China at 53. The second measure is the Taylor Wessing Global IP Index which measures many IP related factors including costs, speed of decisions, strength of remedies and the like. The latest release (June 2016) covers 44 countries for “cost effectiveness of enforcement of patents”. Whilst not covering the entire world, it lists Singapore at 10, Thailand at 31 and Indonesia at 34. By comparison USA is 26, China 25, EPO is 20 and Japan is 18. (Germany ranks at 1).

Finally, and for completeness, all ASEAN member states except Cambodia and Myanmar are members of the PCT. However, Cambodia is a member bound by the Paris Convention.

A brief industry overview

Of course it is not possible to analyse every industry (and often accurate figures are not available), but when one considers the filing of a patent application in a particular jurisdiction one needs to consider one is aiming to protect the right to “make, use and sell” a product and/or process in that jurisdiction as a factor (amongst others) in country selection. The automotive industry is one example where, using 2015 statistics, the ASEAN region – and in particular Indonesia, Malaysia and Thailand – produce over 3.6 million cars and commercial vehicles. This represents about 60% of German production, almost twice that of French production, and 75% of the Korean production. In terms of the sales of automobiles the region represents a market of similar size to Central and South America (excluding Mexico) combined, it is twice as big as Russia, one and a half time bigger than Canada, bigger than the UK, and almost the size of Germany. Again, food for thought when considering a patenting strategy. The automotive industry represents a more “global” industry, whereas some industries clearly have a more regional ASEAN emphasis. One example is rice production where ASEAN contributes over 20% of the world’s production (Indonesia over 7%), so clearly any new processes related to the harvesting, production or processing of rice should have protection considered in ASEAN. Two other relevant industries are banana production where Philippines and Indonesia rank in the top 10 producers, and more particularly the rubber industry where Thailand, Indonesia, Vietnam, Malaysia, Philippines and Cambodia (6 in total) all rank in the world’s top 10 producers.

Challenges for patenting in ASEAN

Whilst the foregoing establishes the current and future potential for seeking patent protection in this region, it is not without its challenges. In fact it can seem quite complex. As an example, the US represents around 20% of the world’s GDP and to seek patent protection in that country there is only one patent regime and only one language. By contrast, in ASEAN to potentially protect around 4% of the world’s GDP there are 10 patent regimes and multiple languages to consider.

This complexity is present not only in the process of filing patent applications, but also the prosecution of these applications. The remainder of this review will look at some of these differences and identify strategies and approaches that can make the life of the patent applicant somewhat clearer and simpler.

Patent Filing in ASEAN

With the exception of Myanmar, all ASEAN members have formalised patent laws. In Myanmar a draft Patent Law was published in 2015, and this draft contains many similar provision found in the patent laws of most Paris Convention countries. For Myanmar it must have TRIPS compliant laws in place no later than 2021. In the meantime, and without any existing laws in Myanmar, those seeking some level of protection must “register” it with the Myanmar Registry Office of Deeds.

As previously indicated, Cambodia is not a member of the PCT, and filing must take place within 12 months of the earliest priority date. The remaining 8 ASEAN member states are all members of the PCT. In terms of timing, national phase entry must occur within the 30 month deadline for Brunei Darussalam, Laos, Singapore, Malaysia and Thailand, and within the 31 month deadline for Indonesia, Philippines and Malaysia. In the case of Singapore, Indonesia and Philippines this deadline may be extended, subject to the payment of late fees. However, any applicant seeking protection in these jurisdictions should first check with a local agent on possible extensions and relevant late fees.

On the assumption that an applicant has already prepared a specification in English (for example; for USA or EPO purposes), applications in the ASEAN region are relatively “user friendly”. In Brunei Darussalam, Singapore, Malaysia and Philippines, an English language specification is acceptable. For Cambodia applications and any supporting documents may be in Khmer or English. For the remaining countries – Laos, Indonesia, Thailand and Vietnam, applications may be filed in English, but a translation must be filed in the local language and generally within 3 months of national phase entry. Careful consideration of timeframes for lodging translations is critical as late fees can apply.

Patent Prosecution in ASEAN

It is not the purpose of this review to list the detailed examination processes of each jurisdiction as these vary so widely. An example of this variation is the timing of the formal examination requirement. For example, the Philippines does not have any specific timeframe upon which to request examination. Generally the requirement to request examination occurs around 3 to 4 years from the international filing date, but again the nature of the “trigger” point may vary. For example, in Thailand the trigger is the date of publication (5 years from date of publication), whereas in Indonesia the trigger is the international filing date (3 years thereafter).

Perhaps the most critical point for “non ASEAN applicants” to consider is utilising the search and examination results from other jurisdictions to fast-track acceptance in the ASEAN region and manage and/or minimise costs. From an Australian attorney’s perspective, a granted Australian patent can be used for obtaining acceptance in Singapore, Malaysia, Philippines, Indonesia, Thailand, Vietnam, Brunei Darussalam and Laos. However, the procedure and timing for utilising the Australian patent will vary from country to country. As an example, Malaysia has a modified examination procedure that utilises a granted patent in Australia (and many other jurisdictions). In Indonesia in general an application will be allowed through to registration if it conforms to an equivalent granted patent elsewhere. In the Philippines, successful search and examination results in (say, Australia) can be used. Cambodia provides a further “piggy backing” example where successful grant in Singapore can be used for grant in Cambodia.

The foregoing is based upon individual ASEAN patent offices making use of the search and examination procedures and results outside ASEAN. It does not include the relatively recent “internal” ASEAN Patent Examination Co-operation (ASPEC) Programme. Under ASPEC the 9 members (Myanmar is not presently part of ASPEC) can utilise the search and examination results from another member state as a reference for its own search and examination work. A member state is not obliged to adopt the results of another office, but will certainly use them in accordance with their own national patent laws (eg patentable subject matter etc). A further advantage of the ASPEC programme is that it operates in English so that once an English search and examination report is generated there is no need for further translation of these reports into the official languages of some ASEAN patent offices.

Reverting to the use of Australia as a basis for ASEAN registration, Australia has a comparatively inexpensive and prompt expedited examination option. Not only can this option result in benefits for ASEAN registration, but through the Patent Prosecution Highway (PPH) can result in quicker grant in USA (and now Europe). In turn, granted patents in USA and Europe can also be used as part of the ASEAN registration strategy if required.
The Patent Prosecution Highway (PPH) has already been alluded to. In short, this mechanism represents a further tool that might be useful in obtaining cost efficient protection in ASEAN. The key feature of the PPH philosophy is to allow patent applicants to request accelerated examination at a “second” office if claims have been found acceptable at a “first” office – provided the first and second office are members of the same PPH arrangement or programme. As mentioned, in the Australian context, expedited examination in Australia can result in accelerated acceptance in USA, Europe, Japan, Singapore and other countries (either through bilateral PPH arrangements or the Global PPH network). In the ASEAN context, Singapore is linked to Australia, USA, Europe and Japan (and many other countries through the Global PPH). Finally, the Japanese Patent Office has bilateral links with the following ASEAN members – Singapore, Malaysia, Philippines, Thailand, Indonesia and Vietnam – and each of these has unique advantages (and some drawbacks) when using the “first” application from Japan.

Accordingly, judicious use of individual ASEAN country practices, country to country arrangements, ASPEC and the PPH can all benefit the applicant seeking protection in the ASEAN region.

Pulling this together

Whilst we can recognise the current, and future, importance of the ASEAN region as a focus for patent protection, it is still basically 10 countries with varying levels of protection and different procedures (both filing and examination) to obtain such protection. The complexity of such diversity is being addressed through a number of mechanisms – both within an external to ASEAN. In summary these include specific bilateral arrangements (where we have identified Australia as an example eg: use of modified examination), internal arrangements such as ASPEC, and other multilateral arrangements utilising various PPH regimes.

This apparent complexity and the potential “solutions” available require a co-ordinated approach, particularly with respect to filing and prosecution, to ensure appropriate coverage is achieved in a cost-effective manner. Many Australian firms, including Dennemeyer & Associates in Melbourne, can offer clients (particularly those located in North America and Europe) a seamless and comprehensive approach to patent protection in ASEAN. Among the benefits of such an approach are a single point of contact where the multiplicity of requirements, formalities and documentation can be managed and simplified for the applicant, together with a resultant simplified reporting and communication system. Inherent in such an approach is an optimisation of the various “solutions” that have been identified without any loss of patent quality.

In summary, such an approach eliminates this apparent complexity through selection and appropriate use of several mechanisms that have the one key objective – sound patent protection obtained in cost effective, easily understandable and manageable process for the applicant.

This article was first published in the "IAM Yearbook 2017".

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Posted by John Walker

John Walker holds degrees in engineering, economics and IP law, and has vast experience in patent and trademark prosecution. He specialises in energy technology, environmental and materials engineering, and assists Australian clients in filings, prosecutions and IP strategy.

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