With growing protectionism globally, the case for a Global IP Hub in Asia becomes more pressing
As the pandemic stirs a quest for blame and globalisation takes a step backwards, an age of protectionism appears to be dawning.
Trade tensions are rising, stoking predictions of a steep decline in world merchandise trade of between 13% (an optimistic scenario) and more than 32% by the World Trade Organization. But trade protectionism is counter-productive in the fight against COVID-19, and detrimental to the global economy. With this backdrop, the case for a regional safe-haven and a global IP hub is also increasing.
Asia is increasingly emerging as a new region of innovation, with more than half of all international patent filings in 2018 being filed by the region’s companies. Overall, the geographical breakdown was Asia (50.5%), Europe (24.5%) and North America (23.1%). The US led the way in rankings, closely followed by China, but the World Intellectual Property Office (WIPO) expects China to overtake the US within the next two years given its acceleration in filing.
Revealing the statistics in March last year, WIPO director general said that Asia’s ascent to majority filer “underscores the historical geographical shift of innovative activity from West to East”.
Unfortunately, the pandemic has led to a decrease in some types of IP filings, whereby international trade mark filings dropped by about 15% in May compared to the same period last year. This could possibly be a reflection of tightened budgets and slower growth. Still, Asia’s march towards being a region of innovation is unlikely to be derailed due to COVID-19.
“IP hubs exist in the West, but multi-national corporations need to protect their IP in Asia too,” says Adrian Tan, partner and head of IP & TMT at TSMP Law Corporation. “They want a city which is clean, efficient, easy to travel to and live in, English-speaking and corruption-free. They want law and order. Singapore is the only city that ticks all the boxes and has great food, to boot.”
Singapore’s neutrality and strong rule of law gives it a strong upper hand in its bid to be Asia’s IP hub. Furthermore, the country not only has the right infrastructure physically but digitally as well.
Singapore’s government is also committed to supporting innovative companies in using their intangible assets (IA), including IP, for growth. This requires a multi-pronged approach including training support such as the Workforce for IP Savvy Enterprises (WISE) initiative, which supports enterprises in building IP management capabilities. The government also provides financial subsidies for companies to access IA/IP audit and strategy services that support business growth .
Efforts under the IP Hub Masterplan 2013, and the update in 2017, have seen results in developing Singapore as an IP hub in Asia. The country has successfully become ASEAN’s 1st International Searching and Preliminary Examining Authority under the WIPO’s Patent Cooperation Treaty.
Importantly, part of Singapore’s masterplan includes creating a hub for IP Dispute Resolution, which will likely grow in necessity as the world becomes more interconnected and cross-border disputes arise. The country has already made headway in this area, with the setting up of international mediation and arbitration centres in Singapore such as the WIPO Arbitration and Mediation Centre and the Singapore International Arbitration Centre.
“It’s a perfect storm globally: a pandemic, a trade war, and general social unrest,” says TSMP’s Tan. “There will be more disputes, which is why there is a need for Asian IP hub. In particular, one specialising in dispute resolution.”
Develop Intangible Strengths
Of course, there are challenges of establishing Singapore as an Asian IP hub. Foremost is the fact that IP rights are territorial, meaning that they are offered and governed by each country’s own legislation. The Intellectual Property Office of Singapore (IPOS) has explored different ways to counter this obstacle, such as by joining the Global Patent Prosecution Highway Programme that seeks to expedite patent applications across 27 jurisdictions globally.
Companies looking to expand overseas, or acquire overseas intangible assets, would also benefit from international financial reporting and valuation standards that are consistent.
Given Singapore’s neutrality and status as a financial hub, the country is well-placed to move the agenda for trusted and credible IA/IP valuation, reporting and disclosure. This is still a work in progress, but it would certainly help IA-rich enterprises that are looking to value and use their IA portfolio in raising capital, transactions and business expansion.
It is also important to consider the manpower needs of an IP hub, in areas such as IP jobs, skills and talent. This covers both technical IP expertise and general IP knowledge to build an IP-savvy workforce; and can help provide good job opportunities.
During these uncertain times, Minister for Trade and Industry Chan Chun Sing said in a national broadcast in June that Singapore’s trusted brand and strong global networks have become even more important in securing the country’s future.
“We will invest to develop our intangible strengths,” he said.
IP is not merely about the law, there is, of course a business angle and increasingly a technological one too. IP meets at a confluence of trade, business and innovation, which is why Singapore’s most recent efforts bring together different agencies and stakeholders to drive its IP Hub ambitions is a step in the right direction.
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