Southeast Asian markets hold opportunities for tech transfer and licensing, but don't count on quick wins
A quick glance at the list of attendees for today’s IPBC Southeast Asia event in Singapore confirms that major multinational technology companies are keenly interested in how this fast-growing part of the world is developing. In part, that is because many have extensive R&D and manufacturing operations in the region; but local firms are also increasingly seen as potential partners technology licence and transfer deals, as delegates heard today.
GE is one multinational that has made partnerships and technology transfer a major pillar of its IP strategy in recent times. In an IAM article last month, the president of GE Ventures’ licensing operation Pat Patnode declared: “We now actively seek out and collaborate with partners who can apply our creations to new industries and offerings around the world.”
Speaking in Singapore this morning, Brian Selby, who is GE Ventures’ vice president of licensing and technology, said that finding partners around this region poses unique challenges: “Capabilities to absorb our technology and turn it into something productive in a specific market vary dramatically.” While GE is very used to partnering with other large corporates, smaller entities can be trickier – often they need not just technology but mentoring on how to use it, something that can strain the bandwidth of a large corporate.
One potential solution, Selby suggested, is working through local organisations like Singapore’s A*STAR, which can help bridge the gap between the two parties. Nevertheless, such efforts will not always succeed, something that a prospective technology licensor has to accept. “A large number of these activities are going to fail,” acknowledged Selby. “What we’re going to try to do is fail fast, and then determine what we learned out of that failure and pivot.”
Julien Willeme, Asia-Pacific legal director for Medtronic, has spent more than six years in Singapore working for multiple global companies, among other things, on corporate tech transfer and licence deals in the region. One trend he’s seeing in the market is a more focused approach to transactions. “A few years ago, almost all licence deals were global, but we’re seeing more and more local ones,” he noted. But it is no easy task to make these kinds of agreements work: “You need local technology teams and local legal teams.” These, said Willeme, are often something even large companies lack.
One complication – if a technology deal involves underlying patents, are they actually registered in any Southeast Asian jurisdiction? Willeme suggested that he is seeing more companies questioning whether they need to file patents in markets like Vietnam, Indonesia and Thailand. In many industries, actual enforcement in these jurisdictions is rare. Multinationals shy away from litigation in certain countries due to concerns around the US Foreign Corrupt Practices Act and similar legislation. One general counsel in the agro-tech sector is fond of responding to any US litigation with a counterclaim in Indonesia, Willeme reported, because “it makes people very nervous” to respond to such a suit.
There is also evidence that for some related reasons, startups which grow up in the region may largely eschew patent filing in favour of other forms of protection. Chris Chan, general counsel at Singapore-based e-commerce startup RedMart, said that his company relies mainly on trade secrets, NDAs and contractual agreements. Chan has a deep knowledge of patents, having clerked at the US Federal Circuit and conducted pharmaceutical patent litigation in the US with Finnegan, but while he praised the IP Office of Singapore’s efforts to incentivise IP filing and the fast route it provides to PCT filing, he said that for his company’s situation and the markets where it does business, patents aren’t necessarily the most effective means of protection.
There is a lot more IP creation going on in this region than patent filing and enforcement statistics might suggest. And that leaves plenty of scope for technology-based deals. As more patent-oriented companies like Japan's IP Bridge continue to explore partnerships with local firms, creative and patient deal-making will be crucial.