Singapore’s ambitious IP hub plans may need further work, say key market figures 04 Apr 13
Singapore has released 14 key initiatives aimed at making the city-state a global IP hub. Based on the recommendations of an IP Steering Committee, the Ministry of Law has accepted and rolled out a 10-year master plan. It focuses on three strategic outcomes: making Singapore “a hub for IP transactions and management, quality IP filings and IP dispute resolution.”
IAM has previously reported on Singapore’s push to modernise the IP marketplace, which included opening up the profession to foreign practitioners, changing patent registration to a ‘positive grant system’ and facilitating the establishment of the WIPO Arbitration and Mediation Centre, Singapore office in 2010.
However, upon closer examination, the comprehensive master plan lacks specific details when it comes to achieving certain goals and may be too ambitious overall.
Guy Proulx, Chairman and CEO of Transpacific IP and member of a sub-committee of the full committee admits: “It is a very aggressive plan. There are clearly some parts that could be very difficult to achieve, while others will be easier.”
Topping the list of realistic goals for Proulx is the strengthening of the IP dispute resolution system, as well as increasing the market’s IP knowledge through training. “Singapore is a great place for dispute resolution,” he says. “People believe they get a fair shake here and that’s the way that Singapore has operated and presented itself. The rule of law is very strong.”
Other initiatives, however, could be more problematic. Take the push to "attract top, international IP intermediaries to facilitate IP transactions through incentive schemes", for example, which is effectively a desire to enlarge the patent broker market. The master plan however offers up scant details on how this will be achieved.
IAM spoke to Kevin Mulroy, founder of IP Trade, a patent brokerage based in Singapore. Currently, he explained, the playing field essentially consists of his firm and Transpacific IP. “I know the committee has talked with quite a few brokers and they have encouraged them to establish a presence in Singapore. It will be interesting to learn more about the specific actions items and types of incentives being offered to brokers,” he says. “Hopefully this will help attract more companies and people with IP skills in order to grow the local market.”
Brokers aside, the master plan also focuses on attracting patent aggregators to the island. Proulx reveals that this may not be easy and identifies the hurdles of transparency and tax inefficiencies. “The committee focused on transparency in the marketplace,” he says. “I had to explain what transparency means and doesn’t mean to an aggregator though. For example, I wouldn’t be willing to put an acquisition agreement online or even let people know how much I paid for a portfolio.”
Then there are Singapore’s tax inefficiencies from an aggregator’s perspective. The country has a multitude of double-tax treaties, but their terms are not as conducive to patent transactions as they could be. “You should be able to use these tax credits in a way that makes sense from an IP perspective,” Proulx says. “Currently you can use a double tax treaty to withhold taxes on licensing fees, but you need to use the tax that is withheld in the current year. If you distribute that revenue against the life of a patent portfolio, you get a mismatch in writing off the tax that you have already paid.”
Both these issues play into how attractive the city-state would seem to an aggregator looking to expand its presence.
Other recommendations from the report include an IP financing scheme, the establishment of a centre of excellence for valuation and an investment of S$50 million by the Intellectual Property Office of Singapore in strengthening patent search and examination capabilities.
Singapore has clearly set its sights high. It remains to be seen how successful the government will be in achieving this vision. “It’s certainly a step in the right direction,” concludes Mulroy. “The plan appears to be pretty ambitious so it should create a stronger environment for IP transactions.”
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