IP sector reacts to Covid-19

31 May 2020

IP sector reacts to Covid-19

Like other sectors of the economy, the Covid-19 novel coronavirus caught the IP community off guard. Espie Angelica A. de Leon reports on how law firms and regulators alike have adjusted to the new normal.

Silent, lifeless.

This is the case everywhere. Where people used to gather, there is only desolation. Where there used to be a cacophony of sounds, there is only silence.

The world is still nowadays, and social distancing is the norm. Non-essential business establishments and offices are closed. Most people are staying home, working from home. No events are taking place – whether sports matches, theatre performances, concerts, festivals, conferences, parties or graduation rites. Transportation is limited. Movement is restricted.

The single thing that isn’t keeping still is moving fast in ruthless tempo. It continues to display its ferocity as it sweeps across the world, conquering one body after another, claiming more and more lives, wreaking havoc in hospitals and decimating healthcare systems. According to some, it is causing a kind of disruption never before seen since World War II.

This is the conquest of the novel coronavirus Covid-19.

On March 11, the World Health Organization officially declared Covid-19 a global pandemic. The announcement forced governments to enforce complete or partial lockdowns or quarantines, travel bans and other policies to keep most people inside their homes and arrest the spread of Covid-19.

Since they offer non-essential services, law firms are among those offices which sent their staff to work from home as a precautionary measure.

At first thought, it seems things may work out well with minor setbacks, thanks to modern technology. Yet, it isn’t just about being able to communicate via WhatsApp, set up teleconferences, review soft copies of documents and send emails to colleagues and clients.

A law firm is a business. With the onslaught of Covid-19 and the ensuing lockdowns, there are business considerations – huge ones – which could make or break an organization.

Lawyers with IP practices are no exception. For the most part, the IP world has screeched to a halt. Courts have postponed trials and hearings, IP offices and agencies conducting raids are closed and conferences are postponed.

How are IP attorneys in APAC dealing with all these? How do they view the future?

 

China

As with many companies around the world, AFD China Intellectual Property Law Office in Beijing is allowing its employees to work from home, at least most of them. Its IT personnel report to the office regularly to ensure continuous and reliable operation of its equipment. Other staff also go to the office from time to time for basic office maintenance and to handle non-digital based transactions such as mailing of application documents.

The firm seems well-prepared for situations such as this. According to Xia Zheng, founder and patent attorney, the firm has been investing in its IT infrastructure and remote working system for years. So far, things have worked.

“The current operational manner – remote working plus having a very small group of people working in the office – has met the current demand of daily work. It does not affect any specific processing or collaboration between different departments,” she says.

It does have its share of challenges. Sometimes online communication takes a bit more time than face to face interaction due to internet connectivity and stability. The firm has also experienced network congestion. Thankfully, it lasted only for a short period, says Zheng, as the network service provider solved the problem immediately. Some personnel also experienced poor network conditions in some regions. The majority, however, have not reported any serious difficulties.

 

Overall, the firm has not slowed down when it comes to delivery of its services and meeting deadlines.

“Always providing accessible and reliable services is our promise and pursuit. The outbreak has not affected that,” says Zheng. “We have robust continuity plans in place and manage to run in full functions.”

The entire IP sector is also coping, she says.

“The IP sector relies heavily on communication. There are many idea exchanges on a daily basis among IP offices, courts, IP applicants/right holders, external IP counsels, and parties that may be involved. During the pandemic, communication is affected to some extent. For example, face-to-face interactions will have to wait until it is safe to do it again. Meanwhile, with the help of modern technologies, some court trials and office hearings can now be conducted remotely. We already had one remote court trial in the past days and it went very well. Apparently, the whole sector is at a preliminary phase of such trying. We look forward to seeing where it goes,” explains Zheng.

The original epicenter of the virus and initially the hardest hit, China is now flattening the curve, so to speak. As of press time in April, travel restrictions which were imposed in most parts are now being eased. However, people are still encouraged to take proper precautions such as social distancing.

 

Malaysia

In mid-March, the government announced a mandatory nationwide Control of Movement Order until March 31, 2020. During this time, business establishments providing non-essential services were closed. So were government offices including the Intellectual Property Corporation of Malaysia (MyIPO), the enforcement division of the Ministry of Domestic Trade and Consumer Affairs and the Malaysian courts.

Later, this order was extended to April 14.

 

“We have been able to configure our systems to allow everyone to work from home, at least in the short term,” says Chris Hemingway, a director at Marks & Clerk in Kuala Lumpur.

Though MyIPO is closed, its online system is up and running, thus making electrical filing for most items possible.

“However, there are several items that cannot be filed electronically so they will need to be processed manually in due course, when offices re-open,” says Hemingway. “MyIPO has extended deadlines to the next working day accordingly.”

Bong Kwang Teo, a partner at Wong Jin Nee & Teo in Kuala Lumpur, cites another problem: physical documents which are not yet digitized.

“Fortunately, we have most email and older documents in the computer server which we can remotely access,” he says. “The issue is the newer matters which have some documents which may not be digitalized as yet.”

 

Teo says the coronavirus will have a huge impact on the IP sector, and the picture isn’t pretty at all.

“I believe businesses are rethinking their strategies and budgetary focus,” he says. “Sadly, IP matters may be sacrificed at the altar of fiscal pragmatism.” 

 

The Philippines

In March, President Rodrigo R. Duterte imposed an Enhanced Community Quarantine (ECQ) over the entire Luzon area including Manila to be effective until April 14. On April 7, an extension of the ECQ to April 30 was announced.

“We continue to answer queries and convey information via emails and other electronic means of communication. We believe our own suspension does not significantly affect our stakeholders,” says Rowel S. Barba, director general of the Intellectual Property Office of the Philippines (IPOPHL) in Manila. “In fact, many welcomed the move as it extended their deadlines for documents due for submission to IPOPHL and allowed stakeholders, as well as our staff, to prioritize their health needs.”

 

IPOPHL’s IT staff monitors the business group for any IT concerns and messages users with instructions for resolving issues. A downtime is observed between 9:30-10:30 every evening for updating and maintenance of the system. So far, these measures have resulted in zero unsolvable IT related problems.

Save for the slow internet connection and the limitation of data caps which may prompt users to purchase a data plan several times in a month, IPOPHL is doing alright despite the ECQ.

“It can be said with confidence that as a whole, IPOPHL’s staff can work efficiently from home as proven by how we have been delivering so far despite limited resources and being under the pressure of balancing work, other work related to this pandemic and attending to our individual survival needs,” says Barba.

 

Slow or intermittent internet connection from time to time is also a problem among the staff of Hechanova & Co. in Manila.

“During peak hours, internet is slow. What I do is to connect my laptop to my cell phone as a hotspot. I also experienced running out of data using my WiFi at home. What I did was to request connection boost from my phone service provider, which readily granted my request,” says Joy Marie Gabor-Tolentino, trademark manager at Hechanova & Co. “The cost was reasonably low for 30 days.”

 

Beyond these, the ECQ has definitely affected the law firm and its clients.

“While generally we are able to respond to our clients’ inquiries and proceed with their instructions, there are instances when the information required of us cannot be provided because the IPOPHL has suspended work,” says Noemi P. Rivera, vice president, trademarks at the firm, “and there is no one who can respond to our follow-ups and inquiries, hence the information we give our clients is sometimes limited.”

Editha R. Hechanova, the firm’s president and CEO, worries about the effect on business, which could negatively affect the volume of IP work coming in.

“We are experiencing some slowdown in the rate of filings from other countries as well as domestically, since everyone appears to be on a wait and see attitude,” explains Hechanova. “We hope that the US$3 trillion coronavirus rescue package would soon be rolled out. In the Philippines, so far the monetary assistance has been directed more to the individual workers and the underprivileged.”

With the temporary closure of key government offices and cessation of conferences, court hearings and the like, what likely scenario awaits the IP sector?

“We anticipate a surge in medical and healthcare innovation as a result of efforts to beat this pandemic, although the rise in applications and filings for such may not arrive soon due to the long period of clinical trials which medical solutions have to go through to ensure their safety for human consumption and their viability in killing the virus,” says Barba.

Aside from the expected spike in innovation and IP filings, other positive effects may arise from the situation, Barba says.

One of these is that the work from home set-up may be viewed as a pilot test that will help employers assess if such arrangement is sustainable and effective in terms of the services they render. If found feasible, it may also help employers design an appropriate work from home business model for the future.

 

Another positive: it gives everyone reason to speed up the development of online facilities and innovative tools for continued service delivery in times like this.

“We would like to see this capacity to conduct online work extend beyond filings and customer care to support even services that usually require physical presence such as adjudication or resolution of intellectual property disputes,” Barba explains.

As to the postponed conferences, Hechanova believes there may be fewer attendees once these gatherings are re-scheduled and get going after the pandemic.

 

Singapore

Meanwhile, the Intellectual Property Office of Singapore (IPOS) staff is divided into two teams. While one team works in the office for one week, the other works off site. The following week, the other gets its turn to work in the office while the other works off site. IT support is always available. Weekends are spent cleaning and disinfecting the office.

“It has worked well,” says Yew Chung Woo, assistant chief executive of IPOS, corporate services cluster. “There may have been mild inconveniences in coordinating team meetings, ensuring that the necessary apps are installed for multi-party conference calls, video-conferencing, etc., but we have also seen an uptick in teams adopting technology which in the long term, will only serve to benefit the organization.”

IPOS was actually ready to implement a work from home setup on an organizational level. This is because it had a group of examiners in the different registries under such work arrangement before Covid-19 struck.

They had also been encouraging customers to take advantage of IPOS’ e-services such as requesting a call back or email consultation before the pandemic.

 

“These have been proven effective and popular,” says Woo. “Our customers are familiar with our fully digital IP2SG which allows them to conduct IP searches, submissions and transactions, 24/7 entirely online. IP applications will continue to be received, examined and published.”

The Rodyk IP staff is also split into two teams working alternately in the office and at home. Members of one team are not supposed to meet with members of the other.

Though their IT systems have been put to a test, things are working just fine overall, according to Jian Ming Chang, patent attorney and assistant principal. Only his emails have increased since work is now being done electronically. “I have been using Outlook’s email flagging function to track the work I have to attend to. Previously, I could track by placing physical files at designated physical inboxes in my office,” he says. “However, this can no longer be done.”

Working on several soft copies of documents in one computer screen with limited space also slows down his pace, says Chang.

As the number of Covid-19 cases in the country grew by the day, the firm gave the staff the choice to work from home every day until early April.

Management had one more announcement: Revenues decreased since the crisis began in January. They expect most businesses, including Rodyk IP, to fare poorly this year.

“My firm has clients of all sizes,” says Chang, “and we worry for some of our SME clients. It is expected that there will be overall less IP work for at least this year. I think that even with some companies that are booming in this crisis, the IP work they generate will not be able to cover the overall loss of IP work in all sectors. In terms of International patent applications, which have a 30/31 month timeline due this year to enter national phase, companies will be more careful in their expenditure for national phase and this will likely decrease the number of national phase applications this year,” he says.

This is the scene in APAC alone. Outside the region, the picture is pretty much the same, maybe even worse.

In the United States, now the epicenter of the Covid-19 crisis with the highest number of infected cases, quarantine measures are being implemented in most parts.

 

On March 31, the United States Patent and Trademark Office (USPTO) extended the deadline for filing patent and trademark-related documents and payment of required fees. The office remains open though with hearings, examiner interviews and other in-person meetings being conducted by phone and video.

It doesn’t end there, however. Some law firms like Cadwalader, Reed Smith, Rivkin Radler and Baker Donelson are now resorting to pay cuts, furloughs, layoffs and other cost-cutting measures.

Based on statistics from the United States Department of Labor, 6.6 million workers in the US filed for unemployment benefits in the week ending in March 28.

Furloughs, pay cuts, layoffs and other draconian ways for belt tightening – these may be playing out in law firms in other seriously affected areas as well. These include Spain, Germany, France and Italy which used to be the epicenter of this crippling health crisis.

Covid-19’s conquest has really put the world to a standstill. For how long, nobody knows. Whatever lies beyond, nobody knows either.

Or perhaps some do know. The ramifications are beginning to reveal themselves and we can only shudder at the possibilities down the line.

Things will certainly be bad in the aftermath of Covid’s conquest. The question is how bad would it be? The IP sector isn’t clueless about the answer.


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