Asia IP Profiles Survey Deadline Extended27 March 2020
Asia IP Profiles 2020 ranks IP firms across APAC.
31 May 2020
As IP lawyers and IP rights owners alike are working increasingly from home during the pandemic, they are finding new challenges in their work. But Excel V. Dyquiangco reports that they’re also finding some new advantages.
The Covid-19 crisis has had a massive impact on businesses across most industries, many of whom are trying their best to manage cash flow during these difficult times. This naturally has an impact on the resources which are available to protect IP rights. As companies face the prospect of reduced cash flow, they may be putting on hold plans to further the protection of their IP rights, and some may even have to prioritize the maintenance of their IP registrations and enforcement efforts given limited funds available.
This was especially felt in New Zealand where some businesses have experienced the drying up of external funding and channels for funding. According to Anton Blijlevens, a principal at AJ Park in Auckland, customers have stopped buying products, so cashflow is strained. “Our lockdown was sharp and hard,” he says. “This has resulted in reaching the end of the toughest restrictions on our economy and some life is now being breathed into it again.”
Mingming Yang, a partner at Wanhuida Intellectual Property in Beijing, agrees. “Due to the unprecedented challenges presented by the Covid-19 pandemic, some IP owners have had to adopt stricter budget constraints and reduce the legal spend for the second quarter or even for the whole year.”
That is to say, Yang says, that IP owners may only take actions for essential cases, abandoning or delaying action on other cases. Also, because of the strict confinement measures, IP owners may face difficulties in giving timely instruction to their lawyer and providing the required documentation to meet the deadline.
According to Daniel Greif, senior trademark attorney and director of the Southeast Asia practice at Schmitt & Orlov IP in Bangkok, more than ever, IP rights need to be managed in a cost-effective manner with business management more focused on the cost of legal functions and in addressing IP issues.
“To assist the budget challenges of our clients, we are being more flexible than ever in providing our clients with attractive price points to assist our clients to meet their budgets,” he says. “Also, we are providing more fixed fee arrangements than ever to allow our clients to have budgetary certainty. Even in this time of crisis, businesses need to properly address their IP issues. IP is still key to the great majority of companies and thus, while budgets are tight, IP prosecution, management and enhancement must continue. However, greater consideration must be made as to what steps need to be taken to appropriately address IP rights in the most cost-effective manner possible.”
This health crisis has also caused legions of white-collar employees – pretty much everyone except for essential service providers – to work from home.
“As a result, delays in filing of applications or other submissions related to IP such as appeals, oppositions, responses to office actions, renewals, among others, in government offices in the Asia-Pacific region, or conducting any legal actions by the enforcement authorities are unavoidably expected as they are closed or their operations restricted,” says Say Sujintaya, a partner at Baker McKenzie in Bangkok. “Business is impacted globally.”
These delays prompted the Department of Intellectual Property (DIP) in Thailand to issue a notification allowing the submission of requests for extensions of time (post-deadline) for applications or other submissions to the DIP in which the valid reason for the extension is a result of the Covid-19 outbreak (being treated for infection of the virus, under lockdown, unable to return to one’s home country) and must be included. In any case, the extension request must be submitted to the DIP within 15 days of the event which prevented a submission from passing. Nonetheless, approval shall rest with an officer in charge of the case.
“However, to protect clients’ interests during the pandemic, we encourage them to submit documents and respond to the DIP’s office actions in a timely manner if they can,” says Sujintaya. “Although the number of new filings of trademark applications in Thailand during this pandemic is considerably lower, the number of office actions filed via the Madrid system has increased. In addition, since some clients closed their businesses or are unable to obtain required documents from their local government agencies, it will take some time for them to respond to us with further instructions as we move closer to previously established deadlines. Due to these difficulties, we need to assist clients in finding supporting documents (local advertisements, government’s notifications or announcements) to use as justification for such difficulties and delays. Also, clients are requesting we notify them of any incurred costs and are requesting fee discounts.”
Thai courts are partially closed until May 31, 2020. Although parties may initiate a new case, hearings during the pandemic are postponed.
“However, to protect the clients’ interest for hearings requiring the parties to be physically present at courts, we advise and assist clients in filing petitions to the courts requesting extensions of time for attending the hearings or for submitting documents citing valid reasons (being treated for infection of the virus, under lockdown, unable to travel to Thailand to be questioned as a witness),” says Sujintaya. “We also encourage the option of testifying virtually because after the lockdown is lifted, it might be difficult to travel into Thailand to testify as a witness. Nonetheless, approval shall rest with the court.”
Delays are also one of the main issues in China. Yang says, “We are obliged to be committed to the health and safety of our employees, but meanwhile we try to provide uninterrupted services to our clients. Considering the client’s difficulties to give instruction and documentation before the deadline, we consulted with the CNIPA and the Beijing IP Court about how to request for extension of time, and then explained in detail to our clients.”
Alan Adcock, a partner at Tilleke & Gibbins in Bangkok, also shared his insights on working from home. “As work from home has been implemented around the world, mail and courier services have had to be rearranged in order to get physical documentation to clients and back to us to get to the IP offices,” he says. “As more and more IP offices here in Southeast Asia have implemented e-filing of applications and supporting documentation, this has been very helpful to alleviate most of these concerns.”
Meanwhile, the Delhi High Court in India has been hearing matters wherein lawsuits are being filed online. According to Pravin Anand, managing partner at Anand and Anand in Noida, his law firm filed patent infringement lawsuits earlier this month, while explaining urgencies on grounds of generic medicines and unlicensed drugs being sold by pharmacies.
“Interim applications are also being filed seeking exemption from filing notarized documents and placing original and physical copies of lawsuits,” he says. “Trademark applications, counter-affidavits and trademark oppositions are also being filed by Anand and Anand without delays through the comprehensive e-filing methods provided by the Department of Promotion of Industry and Internal Trade.”
Throughout the pandemic, many governments have encouraged judges to optimize their work from home systems and to utilize an online system for litigation to ensure that litigants and lawyers get good legal services and protection.
“If this system works during this difficult time, we can imagine that it will change the courts practice in the future,” says Greif.
For example, in China, the Supreme People’s Court has promoted the use of “mobile micro court” on the social media platform WeChat to help courts to conduct trials on the Internet. There are three “internet courts” in China, which handle litigation procedures online from filing a case to issuing judgment documents. In India, meanwhile, the Supreme Court is using video conferencing for non-urgent matters, issuing general guidelines on the use of video conferencing and permitting this to be used in a wide range of situations.
For online arbitration, Greif says that most international arbitration centres have postponed case proceedings which do not heavily depend on witnesses or which concern parties in a jurisdiction where the technology needed is not available or adequate. With the communication of documents done by email, when needed, some arbitration centres are enabling remote hearings, such as the International Chamber of Commerce (ICC) and the Hong Kong International Arbitration Centre (HKIAC).
In fact, the Seoul Protocol on Video Conferencing in International Arbitration, which allows remote hearings in arbitration, has been available for a couple of years. It covers the practical aspects of remote hearings by reference to witness examination, video conferencing venues, observers, documents, technical requirements, test conferencing and audio backup, interpretation, recordings, and preparatory arrangements.
“While Covid-19 poses many challenges for parties and their lawyers, because of the contractual nature of international arbitration, it is relatively flexible, and for the most part is well able to cope with remote hearings,” says Greif. “Before the crisis, hearing bundles were increasingly electronic rather than hard copy, and so most parties, lawyers and tribunals are already used to working from eBundles which are more efficient and easier with which to work.”
In India, the Delhi High Court, the mentioning of urgent matters is continuing before designated Registrars or Joint Registrars only by counsel of record. “The option to appeal to the court that a case merits an urgent hearing is also available,” says Anand. “A one-page document explaining urgency can be uploaded to a portal which is active on all working days of the court from 12 noon to 2 pm.”
The office of the District & Sessions Judge (West), Tis Hazari Courts, Delhi, Rouse Avenue District Court and other district courts of Delhi have also opted for video conferencing, including hearing bail applications.
As for online arbitration, a few of the arbitration institutes have now allowed online filing and hearing of arbitration cases through video conferencing. One such example is the Indian Council of Arbitration. “The International Centre for Settlement of Investment Disputes of the World Bank Group has also platforms for online arbitration so that disputes resolution keeps moving,” Anand says. “WIPO has also provided online docket and videoconferencing facilities and has also provided encrypted e-ADR facilities for mediation, arbitration, expedited arbitration or expert determination rules.”
In Singapore, as of April 7, 2020, all non-essential and non-urgent court hearings have been adjourned, although urgent applications for interim relief such as urgent injunctions or search orders can still be heard. This means that most IP-related hearings have been postponed with the exception of IP infringement matters involving applications for urgent injunctions and search orders.
“As far as possible, court hearings which proceed during this period will be conducted through video links, unless otherwise directed by the Court,” Kok Keng Lau, a partner and head of the intellectual property practice at Rajah & Tann in Singapore. “Save for the adjournment of non-essential or non-urgent hearings during this period, law firms are still assisting clients with electronic court filings which are processed and accepted through Singapore’s Integrated Electronic Litigation System. The civil registry continues to issue timelines and directions for interlocutory matters which are scheduled to be heard after the circuit breaker measures are lifted tentatively on May 4, 2020.”
He adds, “We have been advising our clients on the impact of the Covid-19 crisis on their contractual obligations with third parties, and in particular whether their obligations can be deferred as a result of force majeure and/or the COVID-19 (Temporary Measures) Act 2020. Other advisory work continues to be provided via online channels such as emails and video conferencing.”
Besides the Singapore courts, the Intellectual Property Office of Singapore (IPOS) has also closed its physical office, although electronic filing services are still available. Law firms in Singapore are still assisting IP owners to prosecute IP applications, and/or pursue opposition or invalidation claims at IPOS, and such actions can continue, except that physical hearings are currently suspended until May 7, 2020. All filing deadlines at IPOS between April 7, 2020, and May 7, 2020, have been extended to May 8, 2020.
“These extensions of deadlines have given our clients time to focus efforts and resources on immediate operational issues, and to have additional time to address the difficulties of preparing documents and evidence during the period in which circuit breaker measures are in place,” says Lau.
This issue is similar to China that in spite of attorneys working remotely, they still need to provide the clients with seamless, uninterrupted services. “Lawyers shall keep clients updated with critical information on how the Covid-19 crisis could impact their interests, and to make sure the deadlines would not be missed,” says Yang. “Moreover, most court cases are suspended, but virtual hearings may still be possible for a few cases via video communication software. Given most of our clients are working remotely, we tried to adopt reliable instant audio/video apps to ensure smooth and efficient collaboration and communications with our clients. Moreover, for those clients who are facing financial difficulties, we provide a discount for the legal fees.”
Yang says that for those cases that are suspended, it would be advisable to docket early next year to have a review to check if any action is necessary.
“In China, things are gradually going back to normal, but most foreign clients are still working remotely,” he says. “To ensure smooth communication, periodic audio/video call is recommended. For most prosecution proceedings, the scanned copy of signed POA and/or other documents would suffice, so the client may need to make sure they at least are able to provide e-signature and electronic documents.”
Blijlevens adds that he foresees more virtual meetings in the future. “It’s a novelty and is being used a lot, mostly for business purposes but also for staff wellbeing support,” he says. “The latter obviously being a C-19 issue as some people struggle to work from home.”
Due to the Covid-19 outbreak and government lockdown policies, traditional brick-and-mortar shops around the region were forced to close. But just as IP rights stakeholders have turned to online platforms during the pandemic, so have criminals hawking counterfeit products. Since markets and businesses are closed to in-person shoppers, counterfeiters and other infringers have turned to online platforms. Infringers may use images of genuine products with similar prices or discount prices to lure consumers to buy products from their online shops.
“In many countries, enforcement authorities have stopped or reduced their enforcement work,” says Greif. “And, with the great reduction of tourism and travel, the markets where counterfeiting normally occurs have been largely closed. Given these changes, it will be more difficult for IP owners to enforce their rights in the traditional counterfeit markets. This change will drive more counterfeiting than ever to online platforms and IP owners and their lawyers will need to place greater resources on addressing online counterfeiting.”
He adds, “To assist in stopping counterfeits, businesses should register their marks with the customs authorities. And businesses need to communicate and work closely with online marketplaces to stop counterfeits as more counterfeiting than ever has moved online.”
Praewpan Hinchiranan, a senior associate at Baker McKenzie in Bangkok, agrees. “In addition, if IP owners find any online shops engaging in the sale of counterfeit products and wish to coordinate with the enforcement authorities to do so, IP owners may face challenges since enforcement authorities may lack the necessary manpower, as all efforts have been put toward health and safety issues as a priority.”
She adds that the most viable channel to protect the brands’ IP rights against online infringement includes cease and desist (C&D) letters and/or removal requests.
“Many brands decide to conduct online monitoring, secure evidence online and issue C&D letters to online infringers via available channels (registered mail, email, Facebook Messenger, Line app) or submit removal requests to the platform providers in order to protect their IP rights,” she says. “For border control, despite cancelling the majority of flights and certain in-land transportations, Customs is still operating as normal. We continue to work with Customs to look out for any suspected counterfeit products entering into Thailand.”
In Singapore, Lau says that given the social distancing measures in place, IP rights owners may wish to focus their enforcement efforts on the monitoring of infringements occurring or observable online. According to him, trademark owners, in particular, should monitor the infringement of their trademark rights by online retailers and marketplaces who may be selling counterfeit goods to the public.
“While all of these are going on, take immediate action as necessary and possible to protect their trademark rights, including issuing cease and desist letters for now, and making urgent applications for injunctive relief where the circumstances so justify or require,” he says.
There has also been a rise in the sale of counterfeit medical items. Interpol has reported that Operation Pangea, which includes police, customs and health regulatory authorities from 90 countries, found around 2,000 online advertising links which included counterfeit surgical masks. Further illicit medicines and medical products were also being sold. Interpol has also reported the seizure of substandard sanitizers, unauthorized antiviral medicine and, in the first week of March, seized 48,000 packages of medical items.
In spite of this pandemic, however, the future is bright for IP rights. “Nonetheless and despite these challenges, I am confident IP owners will weather the storm and make necessary modifications to their businesses and thrive,” says Greif. “This will take time – perhaps two or three years.”
According to Darani Vachanavuttivong, co-managing partner at Tilleke & Gibbins in Bangkok, IP is generally considered a recession-proof area of legal practice.
“During strong economic cycles, IP is well-funded both on the creation side (in the labs) and the registration side (at the IP offices),” she says. “During downturns, more illegitimate manufacturing happens, particularly here in Asia when factories stand idle and owners face mounting financial pressure from employees, suppliers and lenders. This amounts to greater IP owner emphasis on enforcement and litigation against infringers. It is also a time when IP licensors tend to review relationships with non-performing licensees.”
Adcock agrees, saying that even if there is no clear timeline for when this will end, IP offices have been resilient and adaptive across all jurisdictions so far, and even if the pandemic itself runs longer than anticipated, resilience and adaptation are expected to strengthen.
“No matter how long it runs, IP will continue to be an active area, and we are similarly well equipped to continue unhindered by the crisis, no matter how long it continues,” he says. “The vast majority of our team members in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam are now working remotely, and based on our robust technology infrastructure, we are providing our full range of services as usual, for however long is required.”
“We are confident about the IPR market in the future after this pandemic,” says Yang. “We believe the law firms, who provide effective support to the IP owners during the crisis, may get more business opportunities and trust from the IP owners. It is also a good opportunity to test if the way of remote working can be adopted, which may help some employees to balance their work and life.”
Lau says that in the near future, it is all about the rise of IP applications. “The Covid crisis has cast a spotlight on telecommuting services such as Zoom meetings,” he says. “With an increased focus and increased reliance on such services, we should expect to see a rise in IP applications for the protection of such new inventions and services. As the virus may be here for an extended period of time, telecommuting and other disruptive services are here to stay, and it will be important for these business owners to obtain the protection of their IP as early as possible.”
For Blijlevens, it is about the R&D. “Companies that continue to research and develop will come out better than those that don’t,” he says. “The changing environment, supply chain stresses, new consumer behaviours and fiscal policies and government stimulus packages, infrastructure spend and so many other levers in the economy have moved settings. In the short term, businesses need to adapt to this but at the same time not losing sight that it will hopefully be back to business as normal as it can be.”
The R&D solution
In New Zealand, some IP owners, especially those in the manufacturing sector, are seeing the lockdown as a chance to focus on research and development, taking a longer term view of the situation. Also, a lot of R&D is being done to address issues arising from Covid-19 measures that are already in place.
“Knee jerk reactions should be avoided and a long term view should be maintained where this is possible,” says Blijlevens. “If there is still R&D capacity available, a reassessment of R&D and associated business opportunities should be considered, especially looking for sudden weaknesses in the competition. [During the global financial crisis, we] saw many smaller players in a market leapfrog larger competition due to the more nimble nature of smaller businesses.”
He adds that solid business with strong R&D and IP rights will succeed, as businesses that invest in R&D already do so with a long-term view in mind. In particular, he says that inventions and patents are a long game, and businesses reliant on this type of IP are already well aware of business risk and the bumps that are experienced over time.
“But given these, we will see changes in the number of IPR filings,” he says. “I suspect the highest drop will be in trademark filings. I don’t believe we will see a change in the nature of IP rights. Perhaps some governments’ stimulus packages may see more spent on R&D and hence IP. I suspect that we will see a diversification in supply chains for some businesses. Businesses that have been severely impacted by single source supply chain problems may source supplies from other parts of the world and perhaps locally. Some governments are espousing ‘made local’ attitudes and may potentially invest in creating a local industry to move away from relying on imports. This may mean that IP owners globally may need to file patents in more countries.”
For Greif, disruptions and crises in the past have always created innovation, with this health crisis being no different.
“Over time, I believe great innovation will occur in products and services,” he says. “Also, I believe law firms and the IP functions of companies will efficiently and effectively address IP issues. IP-centric businesses in sectors such as healthcare, telecoms, online marketers, food and beverage, and social enterprises, where economic activity is expected to grow, will perform well after the crisis. Innovation, in times like this, is generally abundant as firms and businesses are forced to come up with new solutions, thinking in cost-effective manners, and to drive toward new revenue streams. All this creates opportunities and companies that succeed in maintaining a strong IP portfolio will outperform others when the market improves.”
He adds, “Overall, although businesses are now having cash flow issues, it is important for them not to lose sight of IP the importance of their IP assets. After the crisis, having a strong IP portfolio in place will be more important than ever. Companies that effectively create, register, protect and enhance their IP will thrive.”
Asia IP Profiles 2020 ranks IP firms across APAC.
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