World Intellectual Protection
The World Intellectual Property Organisation (WIPO) defines intellectual property (IP) as “the creations of the mind”. Regardless of whether it is an invention, an original expression, a symbol, a name or even a technical solution, they can all be creations of value and when duly protected, are valuable IP to its holders.
In the knowledge intensive economy that we are operating in today, protection of IP is of critical importance and should not be undermined. Businesses are investing heavily in research and development, innovation and creativity as key engines for growth and many have realized that IP is a major source of competitive advantage. Besides preventing competitors from imitating their creations and innovations thereby avoiding wasteful investment in research & development, effective use of IP can also help create a corporate identity through a trademark and branding strategy; negotiate licensing, franchising or other IP-based contractual agreement and even acquire venture capital and enhance the company's access to finance. Along the same vein, governments too are realizing the importance of IP protection and that in order to woo foreign investments into the country, it must first have a robust and reputable legal and enforcement regime in IP protection.
Looking back, I seriously doubt Singapore will be where it is today without its strong property and intellectual property rights protection regime. In the early 2000s, Singapore recognized the need to attract knowledge intensive industry and activities to the nation and produce more innovative products and services to sustain and grow the economy. Seeing the potential economic benefits that IP can bring to the nation, it aims to be a global IP Hub that would allow businesses to create, protect, commercialize and manage their IP. Since then, it has taken significant steps to improve its IPR regime, especially in the area of legislation and enforcement.
Legislation Protecting & Facilitating Creation of Intellectual Property in Singapore
In Singapore, the various forms of IP protected are patents, trademarks, registered designs, copyright, layout-designs of integrated circuits, geographical indications, trade secrets and confidential information as well as plant variety. For the purpose of this paper, I will not venture into the legal aspects of the law but it is worthwhile to note that Singapore has a fully Trade Related Aspects of Intellectual Property Rights (TRIPS) compliant IPR legislative and administrative regime and it is also a signatory to many international conventions. There are several legislations in Singapore to protect and establish a conducive environment for IP creation. They are:
- Copyright Act (Cap 63)
- Geographical Indications Act (Cap 117B)
- Layout-Designs of Integrated Circuits Act (Cap 159A)
- Patents Act (Cap 221)
- Trade Marks Act (Cap 332)
- Registered Designs Act (Cap 266)
- Plant Varieties Protection Act (Act 22 of 2004)
Over the last few years, Singapore has enhanced its IP laws to fulfill its obligations under the US-Singapore FTA as well as to create a robust regime to encourage IP creation and protection so as to progress towards its aim to be a global IP Hub. Some of the more notable changes that affect businesses came into force in early 2005 where any copyright infringement that is willful and significant or conducted for commercial advantage will face criminal charges. A new Technological Protection Measure legislation (subsumed under the Copyright Act) was also put in place which allows the copyright owner to institute civil actions or criminal charges against anyone who manufactures or trade in circumvention devices, or offers services related to the circumvention of a technology measure. In addition, software non-compliance in the business environment whether through under-licensing or use of unauthorized or pirated software, can result in criminal penalties.
Regulation and Enforcement
In April 2001, the Intellectual Property Office of Singapore (IPOS) was formed as the lead government agency on all matters relating to the registration and administration of IP laws. IPOS also promotes IP awareness and provides the infrastructure to facilitate the development of IP in Singapore. In the area of enforcement, IPOS is supported by the Intellectual Property Rights Branch (IPRB), which was set up in September 2000 under the Criminal Investigation Department (CID). Based on inputs obtained from CID, I understand that IPRB basically adopts two approaches in the enforcement of IPR - Co-operative and Police Initiated Approach. The Co-operative approach hinges on the IP owners' interest and commitment to protect their own rights. By taking an active role in IPR enforcement themselves, they contribute significantly to enforcement efforts in excess of IPRB limited resources. This allows IPRB to focus on major cases dealing with the distribution and sale of pirated products in Singapore.
Intellectual Property Rights & Its Impact On Business In Singapore
Attract Businesses & Created New Opportunities
In my view, the IPR regime in Singapore has helped to attract investments and has created many opportunities for business in Singapore. Being a signatory to many of the international IP conventions and treaties, companies can file for IP protection globally in Singapore. With a relatively strong legislative and enforcement regime, companies both in Singapore and overseas generally feel safe to invest, commercialise, protect and realize the value of their IPs in Singapore. In an Award Ceremony organised by the Economic Development Board (EDB) to hand out International Headquarters (IHQ) status to companies on 2 November 2006, Mr. Lim Siong Guan, Chairman of EDB said: “EDB was on target for its 2010 goal of 500 IHQ awards. This was due to key draw cards here such as tough intellectual property laws…..”.
This is especially so when it comes to industries that are IP intensive where a strong IP regime would be a major source of attraction. One good example is the pharmaceutical and biomedical science industry. Singapore's growth in the area has been touted by many industry watchers as ‘phenomenal' as it has attracted leading companies like Aventis, GlaxoSmithKline, Merck Sharp & Dohme, Schering-Plough to invest over US$1.3 billion in manufacturing plants here. On 25 October 2007, California-based biotech firm Codexis opened a $70 million research lab in Singapore. Codexis President and CEO Alan Shaw was quoted as saying that it chose Singapore as a gateway to the region because of the island intellectual property rights regime. A few days later, Pharmaceutical giant Novartis announced that it is investing S$1.02 billion in a manufacturing plant in Singapore to produce cutting edge drugs made from living cells. Its Global Technical Operations Head Tom Van Laar was quoted as saying that good transport infrastructure and strong protection of intellectual property rights were other reasons that Singapore beat contenders such as the United States and Ireland.
There are also cases where companies have leveraged on the strength of our IP regime to innovate, seek new business opportunities and expand into international markets. Take Honeywell for example. With its strong R&D, it has developed an IP portfolio of over 13,000 patents worldwide. After identifying Asia as a focus region for its IP licensing opportunities, it set up an office in Singapore to manage its licensing activities for Asia. Another good example is Soundbuzz, Asia's largest digital music company. By leveraging on technology and Singapore's strong copyright laws, Soundbuzz managed to achieve exponential growth and now operates more than 50 online and wireless music download stores throughout Southeast Asia, India, Australia, Hong Kong and Taiwan. In view of its success, it was acquired by Motorola recently in February 2008. Singapore's IP regime has thus made our business scene more vibrant and has created many opportunities for businesses.
Generated Greater Awareness on IP and Importance of IP Management in Singapore
Another impact that IP has on the Singapore business scene is that it has also generated greater awareness on the importance of IP management amongst companies in Singapore. This could be attributed to the outreach efforts of various public agencies, especially IPOS. Take for example the Small & Medium Enterprises (SMEs). To generate greater awareness on IP and to encourage SMEs to develop a strategy to create, own, protect and exploit their IP, SPRING Singapore and IPOS launched a new $9 million Intellectual Property Management (IPM) for SMEs Programme in early 2007. About 200 SMEs are expected to benefit from the programme over two years. The response by SMEs has been positive. Old Chang Kee for example is one of the first to take up the IPM. In a press release by IPOS on 23 January 2007, its Chairman, Mr. Han Keen Juan was quoted as saying that it has developed a capability development plan to better realize the value of their intangible assets, including their brand, trademark and secret recipes.
The greater awareness on IP could also be seen from the statistics on the number of applications for patents, trademarks and designs. In 1995, only 20 patents were granted/registered by local-based entities. In 2007, this number has increased to 480 and over the last few years, we have seen a significant increase in the number of patents, copyrights and trademarks applications and registrations in Singapore. In 2007, IPOS received a total of 43,597 applications for patents, trademarks and designs. This represents an increase of 45% when compared to 2001 when 30,003 applications were increased.
Compliance With Stringent IPR Laws
While Singapore's stringent IPR regime has helped to facilitate and attract businesses to Singapore, it also means that businesses need to comply with the stringent IPR regime while operating here. Under the enhanced Copyright Act for example, businesses that have been caught flouting the law could face criminal as well as civil lawsuits. Since the toughened Act took effect, a number of firms have been caught flouting the law. One example is PDM, an interior design firm, the first to be charged under the enhanced Copyright Act. On 27 April 2006, PDM was fined $30,000 for using 51 pieces of unauthorized Microsoft, Adobe and AutoDesk software. In another case, a video game maker was raided on 9 February 2007 for using illegal software to create, ironically, gaming software for sale.
Besides the use of illegal software which falls under the Copyright Act, companies also need to be cautious that they do not infringe the IP rights of other companies in their business operations. In today's business environment, litigation regarding patents and other IP rights are fairly common, especially in those industries that rely heavily on IP. One example is the legal tussle between Creative Technology and Apple. At the end of the episode, Apple coughed up US$100m to Creative as part of the settlement of the lawsuit.
Businesses thus need to be aware of the importance of managing their IPs and to comply with the stringent IP laws in Singapore to avoid flouting the laws and being caught in lawsuits which may be very costly.
Strengths & Areas for Improvement
Strengths
- Commitment by the Government
One of the key strengths of the IPR regime in Singapore is the commitment demonstrated by the Government to create a healthy IPR regime in Singapore. It recognized the importance of such a regime to the economic growth of Singapore and has invested significant resources to build the regime. This includes amongst others, the expansion of IPRB in CID from the IPR WEU (Intellectual Property Rights Warrant Enforcement Unit) in 2000, the setting up of IPOS in 2001 and the creation of an IP Academy to deepen and broaden Singapore's knowledge and capabilities in IP protection, exploitation and management. In addition, the government has also invested in infrastructure that supports IP intensive activities as well as provides incentives to attract investment and innovation. EDB for example provides tax incentives and R&D grants to companies setting up research operations in Singapore. To encourage innovation among Singapore-based companies, the government also supports the R&D activities of these companies through R&D grants, tax deductions for R&D expenditure etc.
- Legislative and Enforcement Regime
Another key strength which is in a way related to the commitment by the government is the legislative and enforcement regime in Singapore. Being a party to many international IP conventions and treaties, Singapore's law are constantly updated to keep up with the changes and developments in this area and this is supported by enforcement by IPRB. In my view, what makes Singapore stands out is our apparent enforcement and zero tolerance policy against IPR violators. In today's context, most countries would have IPR protection laws in place but the key issue is whether they actively enforce those laws. One good example is China where police officers have been spotted carrying counterfeit wallets and handbags while going on anti-piracy raids.
In terms of enforcement efforts, much progress has been made in this area to demonstrate Singapore's commitment to IPR protection. Just about two decades ago, Sim Lim Square, Lucky Plaza and Bugis Street used to be flooded with establishments selling pirated software and products. Now, most of these syndicates have been eradicated as a result of enforcement by the Police in partnership with IPOS and the various IP owners and associations. Singapore used to be in the US Watch List of IPR violators but it was finally taken off the list in May 2001. In the last few years, in addition to coming down hard on those who sells fakes on the streets, it has also been targeting those who have moved their business online. To date, a few offenders have been charged in Court and the cases are widely publicized with the intention of sending a strong deterrent message to others not to do so. In line with the enhanced Copyright Act, IPRB has also raided the homes of a few users who had illegally downloaded copyrighted music in large amounts. Based on statistics from IPOS, in 2005 and 2006, a total of 430 raids were conducted and the total value seized by the authorities amount to $29, 696,379. As a result of the enforcement actions, in an inaugural survey that was done and published by the International Chamber of Commerce in early 2007, Singapore was ranked ninth among the top 10 best-performing countries in addressing counterfeiting and piracy.
Area for Improvement
- Greater Ownership by Police & IPOS
I would consider Singapore's IPR regime as one that could be benmarked against international standards. However, one particular area that the authorities could consider is to take greater ownership of the enforcement of IPR in Singapore. While I am unable to obtain statistics on the number of police-initiated raids, it appeared to me from the various newspaper reports that most of the information on violation was actually provided by the respective IP owners or IP Associations such as the BSA. In the two cases where the companies involved actually make us of pirated software for commercial benefits, the information leading to the raids was supplied by the BSA.
There have been criticisms that while violations of IPR are criminal offences, the authorities do not proactively take enforcement actions against those who flout the laws. Rather, much onus lies with the Rights Owners and they have to engage their own solicitors and private investigators (Co-operative Approach) to proof violations. This imposes significant cost to them. While this definitely helps the authorities to save resources, I am not sure whether such a system is sustainable in the long run without much criticism from the IP owners and IP associations. One possible reason for the lack of ‘pro-activeness' might be that the Police could have other higher priority which in my view should be rightly so. One alternative might be for IPOS to take over the enforcement of IPR so that the police can focus its resources on crimes that threaten public safety and security. This would be similar to the set up and operation of the Competition Commission of Singapore (CCS). CCS oversees all aspect of competition in Singapore including the enforcement of the Competition Act.
Conclusion
It cannot be denied that Singapore has made tremendous progress in the area of IPR. The current IPR regime has often been cited as an Asian model and has been ranked favorably in many international surveys. While I would not attribute the success of Singapore solely to its IPR regime, it is a fact that it has played a part in the development and growth of Singapore.
Looking ahead, one key challenge that companies and the authorities have to grapple with is the protection of IPR in the current digital age. Online piracy and infringement have gained increased prominence in recent years and while we have seen a few offenders being prosecuted for selling counterfeit items over the internet and illegal downloading, I believe this is just the tip of the iceberg. Nonetheless, I fully agree with the statement made by IPOS Director-General Liew Woon Yin that “The management of IP policy requires a delicate balancing act and each country has to decide how it can best use it for maximum gain. Policy makers thus have to balance the needs of users and owners, regulation and development, and national development with international norms and expectations”. Thus, while Singapore is committed to be a global IP hub, it is unlikely for the authorities to start prosecuting tourists who wear counterfeits at the checkpoints similar to what some European countries are doing in the near future. While Singapore may not go to such extremes yet, IP owners and businesses however can be assured that if the bar is raised higher, the country will do whatever it takes to maintain its clean and reputable image and will be committed to protecting their IP rights. Fundamentally, this is key to Singapore economic growth.
Annex A
INTERNATIONAL CONVENTIONS IN INTELLECTUAL PROPERTY
RIGHTS THAT SINGAPORE IS A PARTY TO
- Paris Convention
- Berne Convention
- Madrid Protocol
- Nice Agreement
- Patent Cooperation Treaty
- Budapest Treaty
- WIPO Copyright Treaty
- WIPO Performances and Phonograms Treaty
- International Convention for the Protection of New Varieties of Plants otherwise known as the "UPOV Convention"
- The Geneva Act (1999) of the Hague Agreement concerning the International Registration of Industrial Design
- Singapore Treaty on the Law of Trademarks
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