ASEAN Economic Community and Intellectual Property Rights Hidetoshi Nishimura Executive Director Economic Research Institute for ASEAN and East Asia (ERIA) 18 November 2014, Tokyo
Contents of Keynote Speech I. AEC and IPR II. What ASEAN and ERIA have achieved. III.What ASEAN and ERIA are doing toward 2015 IV.Conclusion 2
I. AEC and IPR ASEAN Progress ASEAN: Growing Investment Hotspot: ASEAN: USD 50 b (2008) USD 126 b (2013) China: USD 108 b (2008) USD 124 b (2013) India: USD 47 b (2008) USD 28 b (2013) 3
I. AEC and IPR ASEAN Economic Community (AEC) ASEAN commits the establishment of AEC by 2015. Key characteristics of AEC are; a) a single market and production base b) a highly competitive economic region c) a region of equitable economic development d) a region fully integrated into global economy IPR is one of the core elements of AEC 4
II. What ASEAN and ERIA have Achieved Milestones in the Past 1995 ASEAN Framework Agreement on IP Cooperation -Exploring possibility of ASEAN Trademark/ Patent system 1996 Establishment of ASEAN Working Group for IP Cooperation (AWGIPC) 1998 Hanoi Plan of Action (1999-2004) - ASEAN Trademark/Patent filing system by 2000 -Regional Trademark/Patent registration system or Regional Trademark/Patent Office 2004 ASEAN IPR Action Plan 2004-2010 -Study of the effect of accession to Patent Cooperation Treaty (PCT) -Comparing the effect of Regional Trademark system and accession to Madrid Protocol -Exploring possibility of regional industrial design system 2007 ASEAN Economic Community Blueprint - Implementation of ASEAN IPR Action Plan - Accession to Madrid Protocol as much as possible - Regional Industrial design filing system 2011 ASEAN IPR Action Plan 2011-2015 - Participation in Global IP System -Closer relationship with dialog partners and institutions 5
II. What ASEAN and ERIA have Achieved ASEAN Framework Agreement on IP Cooperation Being mindful of the international obligations under TRIPS, implement intra-asean intellectual property arrangements in a manner in line with the objectives, principles, and norms set out in TRIPS. (Article 2.2) Explore the possibility of setting up of an ASEAN patent system, including an ASEAN Patent Office, if feasible. (Article 1.4) ASEAN Frame work agreement is the core of the ASEAN IPR cooperation. It consists of; Implementing TRIPS and Harmonization of IPR System. 6
II. What ASEAN and ERIA have Achieved ASENA Working Group for IP Cooperation (AWGIPC) Meeting 3 times a year. (Usually, March, July and November) Composed of the IP offices of AMSs. The heads of delegations are the heads of the IP offices. 1 Meeting takes about 1 week, including dialogs with the partners (Japan, Australia, WIPO, etc.). 7
II. What ASEAN and ERIA have Achieved ASEAN Economic Community Blueprint Fully implement the ASEAN IPR Action Plan 2004-2010 Consideration of issues in accession to PCT Comparing the effect of Regional Trademark system and accession to Madrid Protocol etc. Establish an ASEAN filing system for design Accession to the Madrid Protocol, where possible Information exchanges among national enforcement agencies 8
II. What ASEAN and ERIA have Achieved Mid Term Review of AEC Blueprint by ERIA (2012) ASEAN IPR Action Plan 2004-2010 was implemented to a reasonable degree. However, the current level of IPR environment (e.g., local innovation, piracy rates) lags behind other emerging economies. 9
II. What ASEAN and ERIA have Achieved Local Innovation Resident share of patent applications Patent applications in China are dominated by residents. Although ASEAN has increased resident application ratios, it is far below the levels of middle-income countries (even when China is excluded). 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 5.8% 8.4% 9.3% 10.8% 16.7% 20.9% 23.6% 63.3% 79.0% 36.2% Note: Thai data in 2010 and 2011 are affected by a temporary factor (PCT accession). Source: WIPO 10
II. What ASEAN and ERIA have Achieved Piracy Rates (BSA Survey) All the ASEAN countries (covered in the study) have made steady progresses in anti-piracy from 2004 to 2011. However, the piracy rates of most ASEAN countries are much higher than the world average. 2004 2005 2006 2007 2008 2009 2010 2011 World Average 35% 35% 35% 38% 41% 43% 42% 42% Asia Pacific Average 53% 54% 55% 59% 61% 59% 60% 60% Brunei 67% 68% 67% 66% 67% Indonesia 87% 87% 85% 84% 85% 86% 87% 86% Malaysia 61% 60% 60% 59% 59% 58% 56% 55% Philippines 72% 71% 71% 69% 69% 69% 69% 70% Singapore 42% 40% 39% 37% 36% 35% 34% 33% Thailand 79% 80% 80% 78% 76% 75% 73% 72% Vietnam 92% 90% 88% 85% 85% 85% 83% 81% China 90% 86% 82% 82% 80% 79% 78% 77% India 74% 72% 71% 69% 68% 65% 64% 63% Note: This data reflect piracy of software products, thus copyright, patents and trademarks. Source: Business Software Alliance 11
II. What ASEAN and ERIA have Achieved Mid Term Review of AEC Blueprint by ERIA (2012) (Continued) ERIA s recommendations on the Way Forward toward 2015 are; the full implementation of the ASEAN IPR Action Plan 2011-2015, Introduction of special treatment for SMEs to enhance local innovation introduction of numerical targets to monitor administration quality sharing of best practices on organization issues facing IP agencies acceleration of accession to key IP conventions 12
II. What ASEAN and ERIA have Achieved Chairman s Statement of the 21 st ASEAN summit (Excerption) November 28, 2012, Cambodia 30... We agree to intensify our efforts in those areas under the AEC in order to achieve AEC goals by 2015. We welcome the prioritization of AEC measures undertaken by the AEC Council, as well as the recommendations of the AEC Blueprint Mid-term Review, on taking forward the timely, full and consistent realization of our AEC commitments. 13
II. What ASEAN and ERIA have Achieved Changing the Approach for Harmonization of Patent System Document ASEAN Framework Agreement on IP Cooperation (1995) Hanoi Plan of Action (1997) ASEAN IPR Action Plan 2004-2010 (2004) AEC Blueprint (2007) ASEAN IPR Action Plan 2011-2015 (2011) Goals, Directions an ASEAN patent system, an ASEAN Patent Office, ASEAN Regional Patent Filing System by the year 2000, an ASEAN Common Form for Patent Applications, Establish a regional patent registration system, establish a regional patent office (on voluntary basis) Analysis and working out simplified and harmonized procedure, Consideration of issues in accession to PCT Accession to PCT by all AMS by 2015 Instead of trying to formulate a single set of laws and designing a harmonized regional system in IP, the AWGIPC has crafted its own means of integrating through a higher level of cooperation 14
II. What ASEAN and ERIA have Achieved Reasons of Changing the Approach 1. Diversity of the respective national laws 2. Growing demand for international protection mechanism rather than regional protection mechanism 3. Need to participate in global IP system 15
III. What ASEAN and ERIA is doing toward 2015 ASEAN IPR Action Plan 2011-2015 Adopted at AEM in August, 2011, Manado, Indonesia Five strategic Goals A balanced IP system to enable IP offices to deliver timely, quality and accessible services Reduction of average turnaround time for TM to 6 month Implementations of ASEAN Patent Examination Cooperation (ASPEC) (Utilized at least 5%) Development and implementation of a Regional Action Plan on IPR enforcement Establishment of collective management societies in AMSs Participation in global IP system Accession to Madrid Protocol, Hague Agreement and PCT by 2015 Systematic promotion for IP creation, awareness and utilization Establishment of a regional network of patent libraries in AMSs. Development of a region-wide IP promotion campaign to raise awareness. Closer relationships with dialog partners and institutions A structured cooperation with WIPO on a regional level. Enhancement of cooperation with dialog partners such as ANZ, USPTO, EPO, JPO. Regular participation in international fora such as WIPO, WTO. Collaboration to enhance human and institutional capacity of IP offices Structured training programs for patent examiners based on training needs. 16 Digitalization of Patent and Trademark documents.
III. What ASEAN and ERIA is doing toward 2015 Accession to Global IPR Protection System Number of Parties in the World Number of Parties in ASEAN ASEAN Target By 2015 PCT 148/186 Brunei (July 2012) Thailand (December 2009) Malaysia (August 2006) Laos (June 2006) Philippine (August 2001) Indonesia (September 1997) Singapore (February 1995) Vietnam (March 1993) 8/10 10 Madrid Protocol 92/186 Hague Agreement 61/186 Philippine (July 2012) Vietnam (July 2006) 3/10 10 Singapore (October 2000) Brunei (December 2013) Singapore (April 2005) 2/10 7 17
III. What ASEAN and ERIA is doing toward 2015 ASEAN Patent Examination Cooperation Search / Examination (ASPEC) ASPEC is the first regional patent work-sharing program among 9 ASEAN Member States except for Myanmar. First IP Offices Application Application Second IP Offices Request for ASPEC Claim Correspondence - Reduced work and faster turnaround time - Better search and examination 18
III. What ASEAN and ERIA is doing toward 2015 ERIA Myanmar IPR Symposium IPR for SME Development Held on 9 th September. 2014, in Nay Pyi Taw in cooperation with Ministry of Science and Technology (MOST), Ministry of National Planning and Economic Development (NPED), Myanmar and Japan Patent Office 19
III. What ASEAN and ERIA is doing toward 2015 Summary of ERIA Project IPR Policy for SME Development (1) A. Accelerated examination SMEs sometimes want quick response so that they can leverage IPRs quickly. [Japan] money). JPO provides the services free of charge (because SMEs do not have [ASEAN] (a) SMEs tend to face longer examination period (because their applications are domestic). (b) Some countries have framework for exam acceleration. But the scope is limited (no automatic eligibility for SMEs). SMEs need to pay extra fee (because of extra services). Is it SME enhancing? B. Reduction in examination/registration fee Even when SMEs invent, they sometimes lack money to apply/register. [Japan] JPO provides reduction/exemption for application/registration fee. [ASEAN] Some governments provide financial support for application and registration, but only for a limited time period (not 20 years). Thus, Universities give up patents when the support period ends. 20
III. What ASEAN and ERIA is doing toward 2015 Summary of ERIA Project IPR Policy for Investment Promotion in ASEAN (Phase I) (1) Conducted survey for 80 companies in Japan, Korea, China and ASEAN MNCs pay greater attention to Size and Growth of the market, Wage level and Size and Growth of GDP, rather than IPR related issues, at the decision point of establishing subsidiary in ASEAN. After establishing subsidiary in ASEAN, however, they recognize the difficulties highly on IP related issues. After (N=60) Implementation and enforcement of IP law Wage level (labor cost) Legal development concerning IPRs 27% Country risk 25% Completeness and reliability of infrastructure 23% Ease of procuring raw materials, 22% Quality of human capital 18% Existence of preferential treatment system 17% Regulations on currency repatriation and 17% Size and growth rate of the relevant market 15% Size and growth rate of GDP 15% Number of existing competitors in the 15% Trade barriers or trade friction 15% Corporate tax rate 15% Size and growth of the relevant market in 15% Stability of exchange rate 12% Ease of establishing sales channels 10% Price level 10% Requirements for operating permit 10% Distance from neighboring country with 10% Receptiveness to foreign products by local 7% Number of prior establishment of local 7% Distance from home country 7% 40% 38% 0% 20% 40% Facing problems after establishments of local subsidiaries (N=60) 21
V. Conclusion Regional Comprehensive Economic Partnership (RCEP) Guiding Principles and Objectives for Negotiating RCEP RCEP will cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement and other issues. V. INTELLECTUAL PROPERTY The text on intellectual property in the RCEP will aim to reduce IPrelated barriers to trade and investment by promoting economic integration and cooperation in the utilization, protection and enforcement of intellectual property rights... 22
V. Conclusion ASEAN RISING:ASEAN and AEC Beyond 2015 by ERIA (2014) a. Fully implement the ASEAN IPR Action Plan b. Introduce special treatment for SMEs to enhance local innovation (e.g., expedited examination and discounted fee) c. Continue cooperation in drafting legislation and enforcement procedures in IPR d. Introduce numerical targets to monitor the administration quality; e.g., turnaround time in patents e. Accelerate accession to key global IP conventions f. Review existing legislation to enhance collaborative inventions and the local participation in them g. Compile IPR-related data at the regional level in a comparable manner h. Strengthen cooperation in dissemination to and engagement with stakeholders on IPR matters 23
V. Conclusion Nay Pyi Taw Declaration on the ASEAN Community's Post 2015 Vision (excerption) Foster robust productivity growth through innovation and technology development, which entails human resource development and intensified regional research and development with commercial application to increase ASEAN's competitive edge to move up the global value chain into higher technology-intensive manufacturing industries and knowledge intensive market services; 24
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