Japanese manufacturers are generally shying away from applying for patents in ASEAN countries for reasons such as the “immatureness” of the judicial system in intellectual property (IP) trials and the low level of technology assessment by local IP authorities, said a representative of the Japan Intellectual Property Association.
Japanese companies urge member states of the Association of Southeast Asian Nations to improve IP protections so that they can rest assured doing businesses there. Meanwhile, ASEAN countries aim to set up such protections to lure more direct investment by Japanese companies.
“In many ways, ASEAN countries do not have concrete infrastructure for IP protection,” JIPA Secretary General Hideo Doi said in an interview with The Japan Times after the 12th JIPA Symposium on the theme “Let’s talk a step further about IP strategy and the key to success in Asia,” held in Nagoya on Feb. 1.
“Thus, we would like to support them,” Doi said.
At the symposium attended by some 1,000 people involved in IP businesses and companies holding IP, JIPA and the IP offices of each panelist’s country agreed that they would continue exchanging opinions consistently for further development of IP systems in the region. Also, they agreed that JIPA will continue cooperation, for example, by dispatching lecturers, for human resource development projects promoted by the IP offices of each panelist’s country.
JIPA, a nongovernmental organization representing users and holders of IP, will continue to support IP authorities in Asian countries by exchanging knowhow on various technologies and evaluating patent applications, Doi said. The Japan Patent Office, the government body that approves patents, also performs a similar role by exchanging information with Asian counterparts on patent applications that it has already approved, he said.
Challenges in ASEAN
There are several challenges for Japanese companies applying for patents in ASEAN countries because the concept of protecting IP is relatively new in those nations.
One of the challenges, Doi said, is that the judicial system in those Asian countries is not yet mature in terms of IP protection. Going through court trials is tiresome, especially as trials tend to be lengthy with slim chances for a favorable judgment, he said.
Another challenge is that IP authorities there have inadequate skills and little experience in assessing technologies and business models for which patents are applied. They need to check the contents of patent applications thoroughly and make sure similar approved patents do not exist before approving them. Otherwise, there will be unnecessary court trials on conflicting patents.
The third challenge is the cost of applying. Fees paid to patent authorities in Asian countries are not so high, but lawyer fees and translation costs usually are.
For example, total costs to apply for patents are roughly ¥1?million in ASEAN, Europe, China and many other countries, he said. The amount is not much, but the cost in ASEAN seems higher than other countries considering the relative value of the market, he said.
JIPA and the Japan Patent Office are hoping they can provide their knowhow on judging patent applications and protecting IP from being infringed.
The number of patent applications in six of ASEAN countries — Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam — is extremely low compared with other countries and regions, according to the statistics complied by JIPA.
The number of patent applications in those countries was 25,890 in 2011, according to the statistics. That compares with 368,434 in China and 180,024 in the EU.
In the corresponding number of patent applications by Japanese applicants, the six ASEAN countries had 4,922, China had 34,083 and the EU had 33,270. Meanwhile, the six ASEAN countries accounted for 14.8 percent of Japanese trading volume in 2011, compared to 20.6 percent for China and 10.5 percent for the EU.
This shows the number of patent applications by Japanese companies in the ASEAN region is currently too small, considering ASEAN’s economic scale for Japan.
Importance of Asia
China is generally the center of discussion on IP among Japanese and global IP holding companies because the country is notorious for violating IP.
Still, JIPA held the symposium on ASEAN because the region’s importance has increased while China’s importance has recently faded, Doi said.
Japanese manufacturers have formed joint ventures in China and their role is basically to provide technology to their Chinese counterparts. Chinese companies these days do not need as much help anymore and are now dissolving some of these joint ventures, he said.
Also, China sees doing business with Japan as having certain geopolitical and diplomatic risks, making it difficult for Japanese companies to do business there, he said.
On the other hand, ASEAN countries are generally friendly to Japan and continue to aggressively lure direct investment from Japanese companies.
Japanese companies are increasingly strengthening their business in Asia but have to obtain patents before entering Asian markets, he said.
During the symposium, World Intellectual Property Organization Director General Francis Gurry stressed in his speech the importance of Asia as an IP market because innovation and IP activities have shifted to Asia.
Gurry also mentioned one of WIPO’s initiatives, WIPO Green, a platform in which patents on environmental technology can be easily searched and used, which can be of benefit for ASEAN countries as IP users.
WIPO Green, which has not been formally launched but whose prototype is being used on a trial basis, is a database singling out environmental technology. It not only has a list of environmental patents but also information on what technologies developing countries need, Doi said.
Therefore, WIPO Green can offer patent holders business opportunities as well, he said.