Talk about IP value creation opportunities in Asia, and inevitably for most of us the first thing that springs to mind is China. More often than not, the 10 countries and 625 million people lying to the south of the Middle Kingdom that make up the Association of Southeast Asain Nations (ASEAN) are left out of the conversation.
On the one hand, there may be good reasons for that. If you thought the European Union has problems in achieving IP harmonisation between its members, then the task faced by its Southeast Asian counterpart can look insurmountable. To say the least, the IP protection landscape in some ASEAN countries leaves a lot to be desired. In less-developed member states like Laos and Myanmar, IP statute and infrastructure are next to non-existent; while in others, the lax enforcement of IP laws means that the situation is not much better. At the other end of the scale, though, the likes of Singapore and Malaysia offer some of the most sophisticated and credible IP systems in the world - not only in terms of legal protection, but also in the recognition and exploitation of IP as a business asset.
Taken together, the availability of relatively lower manufacturing costs, precipitous output in terms of public sector R&D, liberalisation of markets and increasing personal wealth of consumers make Southeast Asia a promising destination both for investment in locally created technology and monetisation of foreign IP assets. This is one of the reasons why IAM is hosting the first-ever IPBC Southeast Asia in Singapore on 3rd March.
These issues are also explored in more depth in a feature in the latest edition of IAM magazine, which subscribers can read online here. In the course of writing the article, I spoke to Philip Lim, CEO at Exploit Technologies (ETPL). In this role, Lim heads up the IP commercialisation and technology transfer arm of Singapore’s national R&D institute and top patent filer, the Agency for Science, Technology and Research (A*STAR), so he’s in the thick of Southeast Asia’s rapidly developing IP landscape. Here is the full interview with Lim, exclusively for IAM blog readers.
What difficulties does ETPL face in trying to license and transfer its own IP in Southeast Asia?
One difficulty when trying to license or transfer our intellectual property and technology within the region or farther afield is related to geographical limitations that hinder our technical support. For example, timeliness in responding to technical support is challenging when a licensee is not located in Singapore. This is especially critical in the case of a proprietary know-how knowledge transfer.
More importantly, as A*STAR’s commercialisation arm, ETPL’s charter is to transfer or license our intellectual property and technology to locally based entities to achieve a wider economic outcome or societal benefit. Hence, our engagement with such entities goes beyond simply licensing IP rights to a deeper collaboration to ensure that knowledge and capabilities are successfully applied to achieve business growth for the company. I am sure the objectives are similar for all in all jurisdictions in the region and beyond.
What level of IP and technology licensing activity do you think is taking place in Southeast Asia?
The activities involving IP and technology licensing are complex and may not be that straightforward in measuring. Currently, we are not aware of any publicly available information on the amount and flow of IP activity within ASEAN. Our general perception is that IP activity is rising, possibly due to globalisation and a growing focus on IP-related issues. It does seem that local companies and R&D institutions are the key drivers for IP activity in the region, through licensing or IP transfer. We are also seeing more and more organisations engaging the services of third-party IP brokers where such organisations are lacking in internal IP capability.
Leadership set by respective governments is critical, especially in establishing legal structures, policies and enforcement of IP. This is the precondition for innovative activities such as R&D, inventions, new products, designs, new business models, brand development and other intellectual outputs. From these, an entrepreneurial environment will facilitate the translation of these outputs to economic outcomes. There is a strong correlation between countries with sound IP regimes and active IP licensing & tech transfer activities.
What is your advice to foreign companies seeking to license their IP in ASEAN countries?
To enable deals to get done, it is important that foreign companies provide a clear value proposition to local licensees that the IP helps the latter to be competitive or have a lead over its competitors.
A majority of our licensees are SMEs Smart use of IP can be a key business advantage for these companies, allowing them to leverage emerging technologies to gain competitive market advantage. To encourage technology adoption, A*STAR created a number of SME outreach platforms such as the Technology Adoption Programme and Headstart. The Headstart licensing programme grants local SME collaborators an exclusive, royalty-free licence for the first 18 months. This programme provides such SMEs access to practical and affordable technology and first-mover advantage, encouraging companies to participate in further R&D to create their own novel products and solutions. A*STAR also created ‘Simplified Licensing’ to provide greater clarity with terms that are pro-business, taking into account the operational and financial challenges of these locally-based companies.
In your view, what should governments and rights holders in ASEAN do to better exploit locally generated IP assets and encourage foreign investment?
At A*STAR, we have transitioned from a ‘technology push’ approach to engaging industry players early in the process so as to shape our IP or research capabilities to meet their needs. For example, A*STAR has many ongoing and upcoming research collaborations with industry that leverage on our existing IP and research capabilities. These collaborations also provide opportunities to develop foreground IP that is then adopted by industry collaborators.
Foreign investments are attracted to business environments that have, among other business considerations, IP rights that are enforceable and transparent. This requires a legal and regulatory framework that balances IP rights fairly between IP owners and users. In addition, continuing efforts, such as those by the Singapore government, to build a research talent pool help to attract foreign investments looking for capabilities to undertake research, which then lead to IP creation that can be further exploited.