Patent strategies for the ASEAN region
Are you or your clients developing an international patenting strategy? If so, you should consider the world’s seventh-largest economy, particularly as it is projected to become the fourth largest. This regional economy is the Association of Southeast Asian Nations (ASEAN).
When one considers an ASEAN IP strategy, it is important to understand what is meant by ‘ASEAN’ and ‘Asia’, as these terms are often loosely interpreted or even used interchangeably. ASEAN does not include China, Japan and Korea – part of the ‘IP 5’; nor does it include Western Asia, which broadly refers to countries 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 thus covers the 10 ASEAN member states: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
An economic perspective
Although comprising 10 smaller countries, ASEAN has the potential to become one of the largest economies and markets in the world – which in itself is sufficient justification to consider IP strategies in the region. If ASEAN were a single economy, it would be the seventh largest in the world (and the third largest in Asia, behind China and Japan); if current growth trends continue, it will be the world’s fourth largest by 2050. Gross domestic product (GDP) figures for 2015 place seven of these 10 economies in the global top 40 GDP growth rates, with all of the current major economies well outside this list. From a population perspective, ASEAN’s potential market is greater than that of the European Union or North America – which is further justification, particularly as the region’s GDP grows.
However, the region is not uniform in economic terms. Six member states – Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand – are more economically advanced than the others. In fact, Singapore and Brunei Darussalam figure in the world’s top 10 for GDP per capita on a purchasing power parity basis.
A major milestone in the regional economic integration of ASEAN occurred in 2015: the establishment of the ASEAN Economic Community (AEC). The purpose 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 patent perspective
The World Intellectual Property Organisation’s 2014 patenting statistics (the latest annual statistics currently available) provide interesting insight into the region as a focus for developing a patenting strategy. More than 42,000 patent applications were collectively filed in 2014, which makes the region slightly more patent active than Russia, Canada and Brazil. Of course, this figure is only about 8% of US filings, 25% of European Patent Office (EPO) filings and 12% of Japanese filings. Another interesting statistic is that local filings represent only 12% of all filings – much less than the 49% for US and EPO filings, 78% for Korean filings, 82% for Japanese filings and 86% for Chinese filings. Foreign filing is thus clearly the major focus of applications being examined in the region.
In addition to pure filing numbers, other measures reflecting the more qualitative aspects of patenting are notable. One measure is the 2015 International Property Rights Index, which is a measure of a country’s property rights based on 10 factors relating to the legal and political environment, physical property rights and IP rights. This index was calculated for 129 countries and ASEAN countries varied from Singapore (ranked fifth) and Malaysia (ranked 28th) to Myanmar (ranked 129th – last place). For comparative purposes, Finland was ranked first, Japan eighth, the United States 15th and China 53rd.
The second measure is the Taylor Wessing Global IP Index, which measures many IP-related factors, including costs, speed of decisions and strength of remedies. The latest release (June 2016) covers 44 countries for “cost effectiveness of enforcement of patents”. While not covering the entire world, it lists Singapore in 10th place, Thailand in 31st and Indonesia in 34th. In comparison, the United States is in 26th place, China in 25th, the EPO in 20th and Japan in 18th (while Germany ranks first).
Finally, all ASEAN member states except Cambodia and Myanmar are members of the Patent Cooperation Treaty (PCT). However, Cambodia is bound by the Paris Convention.
While it is impossible to analyse every industry (and accurate figures are often unavailable), when selecting a jurisdiction in which to file a patent application, the aim of protecting the right to make, use and sell the relevant product or process in that jurisdiction must be considered. For example, in the automotive industry, the ASEAN region – in particular, Indonesia, Malaysia and Thailand – produces more than 3.6 million cars and commercial vehicles annually (according to 2015 statistics). This represents about 60% of German production, almost double French production and 75% of Korean production. In terms of automobile sales, the region represents a market of similar size to Central and South America combined (excluding Mexico); it is twice as big as Russia, one-and-a-half times bigger than Canada, bigger than the United Kingdom and almost the size of Germany. This is further food for thought when considering a patenting strategy.
Other industries have a more regional ASEAN emphasis. One example is rice production, where ASEAN contributes over 20% of the world’s production (and Indonesia alone over 7%); clearly, any new processes relating to the harvesting, production or processing of rice should have protection considered in ASEAN. Two other relevant industries are banana production, where the Philippines and Indonesia rank among the top 10 producers worldwide; and the rubber industry, where Thailand, Indonesia, Vietnam, Malaysia, the Philippines and Cambodia all rank among the world’s top 10 producers.
Challenges of patenting in ASEAN
While the foregoing outlines the potential for seeking patent protection in this region, doing so is not without its challenges. In fact, it can seem quite complex. As an example, the United States represents around 20% of the world’s GDP and when seeking patent protection in that country, only one patent regime applies and one language is used. In contrast, in ASEAN, to potentially protect around 4% of the world’s GDP, 10 different patent regimes apply and multiple languages must be considered.
This complexity is present not only in patent application filing, but also in prosecution. The remainder of this review looks at some of these differences and identifies strategies and approaches that can make the life of the patent applicant somewhat clearer and simpler.
With the exception of Myanmar, all ASEAN member states have formalised patent laws. In Myanmar, a draft Patent Law was published in 2015, which contains many provisions similar to those found in the patent laws of most Paris Convention countries. Myanmar must implement laws that comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights by 2021. In the meantime, and with no existing relevant laws in the country, those seeking some level of protection must register 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 eight ASEAN member states are 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, the Philippines and Malaysia. In the case of Singapore, Indonesia and the Philippines, this deadline may be extended, subject to 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 (eg, for US or EPO purposes), applications in the ASEAN region are relatively user friendly. In Brunei Darussalam, Singapore, Malaysia and the Philippines, an English-language specification is acceptable. Cambodian 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 three months of national phase entry. Careful consideration of timeframes for lodging translations is critical, as late fees can apply.
The detailed examination processes of each ASEAN member state vary widely. An example of this variation is the timing of the formal examination requirement. The Philippines, for instance, has no specific timeframe within which to request examination. The requirement to request examination generally occurs around three to four years from the international filing date, but again the nature of the ‘trigger’ point may vary. For example, in Thailand the trigger is the publication date (five years from publication), whereas in Indonesia the trigger is the international filing date (three years thereafter).
Perhaps the most critical point for non-ASEAN applicants to consider is using the search and examination results from other jurisdictions to fast track acceptance in the ASEAN region and to manage or minimise costs. From an Australian attorney’s perspective, a granted Australian patent can be used to obtain acceptance in Singapore, Malaysia, the Philippines, Indonesia, Thailand, Vietnam, Brunei Darussalam and Laos. However, the procedure and timing for using the Australian patent will vary from country to country. As an example, Malaysia has a modified examination procedure that uses a granted patent in Australia (and many other jurisdictions). In Indonesia, an application will generally be allowed through to registration if it conforms to an equivalent granted patent elsewhere. In the Philippines, successful search and examination results in Australia (for example) can be used. Cambodia provides a further ‘piggybacking’ example where successful grant in Singapore can be used for grant in Cambodia.
The foregoing is based on 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 Cooperation (ASPEC) Programme. Any of the nine members of ASPEC (Myanmar is not presently part of ASPEC) can use 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 its own national patent laws (eg, with respect to patentable subject matter). A further advantage of the ASPEC programme is that it operates in English, so that once an English search and examination report has been generated, there is no need for further translation of these reports into the official languages of some ASEAN patent offices.
Australia has a comparatively inexpensive and prompt expedited examination option. This can result not only in benefits for ASEAN registration, but also – through the Patent Prosecution Highway (PPH) – in quicker grant in the United States and Europe. In turn, granted patents in the United States and Europe can also be used as part of the ASEAN registration strategy if required.
The PPH represents a further tool that may be useful in obtaining cost-efficient protection in the ASEAN region. 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 that the first and second offices are members of the same PPH arrangement or programme. As mentioned, expedited examination in Australia can result in accelerated acceptance in the United States, Europe, Japan, Singapore and other countries (through either bilateral PPH arrangements or the Global PPH network). In the ASEAN context, Singapore is linked to Australia, the United States, Europe and Japan (and many other countries through the Global PPH). Finally, the Japanese Patent Office has bilateral links with Singapore, Malaysia, the Philippines, Thailand, Indonesia and Vietnam – 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 benefit applicants seeking protection in the ASEAN region.
Pulling this together
While the ASEAN region is an important 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 and external to ASEAN. These include specific bilateral arrangements (eg, with Australia), internal arrangements (eg, ASPEC) and other multilateral arrangements using various PPH regimes.
This apparent complexity and the potential solutions available require a coordinated approach, particularly with respect to filing and prosecution, to ensure that appropriate coverage is achieved in a cost-effective manner. Many Australian firms offer clients (particularly those in North America and Europe) a seamless, comprehensive approach to patent protection in the ASEAN region. 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, and a resultant simplified reporting and communication system. Inherent in such an approach is an optimisation of the various solutions that have been identified with no loss of patent quality.
Such an approach eliminates this apparent complexity through the selection and appropriate use of several mechanisms that have one key objective: sound patent protection obtained in a cost-effective, easily understandable and manageable process for the applicant.
Dennemeyer & Associates
35 Cotham Road
Kew VIC 3101
Tel +61 3 8658 6090
Fax +61 3 8658 6091
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.
Dennemeyer & Associates is an international IP law firm, providing IP management specialists in several jurisdictions.