Asian companies are often seen as lagging behind in innovation and being little more than the assembly line or back office of multinational corporations. -- PHOTO: REUTERS
INTELLECTUAL property (IP) has long emerged from the shadows, but the debate over it has raged over the past two decades.
At its heart is the conflict between two abiding interests. One recognises the value of protecting the creativity of authors, artists, designers, inventors and other creators. The other looks to the promotion of easy access of knowledge and information to society at large.
In the international arena, many developing countries seem dismissive towards IP, perceiving it to be developed countries' attempt to restrict their legitimate access to foreign knowledge and innovation.
These critics, citing universalist moral arguments, stress the benefit of widespread dissemination of inventions and other creations. But developed countries such as the US clamour for greater protection for their intellectual creations.
Clearly, national self-interests are at play. An uneasy compromise exists in the 1994 Trips Agreement administered by the World Trade Organisation (WTO).
A principal technique of Trips - or Trade-Related Aspects of Intellectual Property Rights - for accommodating the divergent IP interests of the member states is the principle of national treatment, where each member state is obliged to grant the nationals of other member states the same rights it gives its own nationals.
But from the outset, allegations of non-compliance have emerged, and the difficulties associated with enforcement through the cumbersome WTO enforcement mechanism became evident.
In consequence, bilateral free trade agreements (FTAs) gained increasing sway, due in large part to the US being haunted by annual trade deficits. The FTAs impose so-called 'Trips-plus' standards of protection for IP and the rule of reciprocity as the basic tenets, and other minimum requisites for the contracting states' laws.
The contagion spread to Singapore, which signed the US-Singapore FTA in May 2003, and Asean, which entered into an FTA with China in January 2010.
Now, the Government seeks a significant role for Singapore amid a challenging landscape.
Singapore an Asian IP hub?
IT IS now seeking feedback 'to expand Singapore's role as an Asian IP hub, and service the potential growth in demand for IP services in the region'. It aims to build 'a vibrant marketplace in Asia for the transaction and commercialisation of IP'.
The idea of an Asian IP hub requires elaboration. It connotes a centre harnessing intellectual creations and innovation for exploitation and commercialisation, not only in Singapore but elsewhere in Asia too. This, in turn, indicates the establishment of linkages and relationships with other IP stakeholders in Asia, such as government agencies, research institutions, scientists, inventors, authors, artists, creators, entrepreneurs, venture capitalists and others involved in the innovation cycle. It is a misnomer for a hub to operate independently, without a circle of interdependent interests.
Specifically, a hub requires a huge hinterland in which innovation is encouraged and innovative products can be exploited and commercialised across borders.
But formidable and strategic considerations may arise. In Asia, apart from Japan and South Korea, the level of innovation is still relatively low. According to a recent Organisation for Economic Cooperation and Development report, the US, Japan and Europe have the lion's share of the global research and development expenditure and close to half of the expenditure is accounted for by 700 firms, of which 80 per cent are from five countries: the US, Japan, Germany, the UK and France.
Asia's growth has been largely fuelled by traditional factors of production - capital and labour, with little domestic innovation. Imported foreign technology is a critical driver. The perception lingers that Asian companies are little more than the assembly line or back office of multinational corporations, destined forever to play catch-up in the innovation ladder.
Can Asians innovate?
THE root causes are not difficult to discern, according to a recent Asia Business Council report entitled 'Can Asians Innovate?'
They include: hierarchical organisations that stymie creativity and critical thinking skills, lack of access to new-venture funding and weak IP protection.
To these may be added the lack of cross-border markets for the transaction and commercialisation of innovation. The focus in Asia has been on developing national resources and prowess, rather than pan-Asian collaboration. Also, although innovation is mainly driven by entrepreneurs, the political will to implement policies and regulatory frameworks that promote innovation, as well as the diffusion of ideas and knowledge across the region, remains muted.
For an Asian IP hub to thrive, it is also critical to have an adequate legal framework for protecting IP in the Asian region. In September 2009, the European Commission published a report on innovation policy in Europe in which it expressly acknowledged that such a framework in Europe 'is crucial for fostering entrepreneurial behaviour' and is a precondition for an innovative society. It cited the failure to introduce a community-wide patent system as one reason for the region 'not providing favourable conditions for the development and diffusion of innovation'. Efforts to create such a patent system were hampered by national self-interests, as well as legal and language issues.
The differences proved so intractable that the Commission announced only last month a unified Patents Court for Europe, after several years of debate.
There are no similar efforts in Asia. IP rights are inherently territorial. In practice, obtaining IP protection in many parts of Asia is often cumbrous and costly, and dependent on the tendencies of national IP offices. There are no uniform and coherent laws, regulations and practices that would support and facilitate the granting, exploitation and commercialisation of IP throughout the region.
As in Europe, creating a pan-Asian IP system is likely to come up against national self-interests, and legal and language issues.
Such challenges are also likely to be intensified by different stages of economic development. In the Asean region for instance, there have been discussions for years concerning harmonising IP laws and practices. However, progress has, among other things, been impeded by the diverse IP laws and practices among its members. Meanwhile, external developments such as the FTAs have rendered the discussions increasingly meaningless.
Yet, an Asian IP hub requires a common and coordinated IP protection regime, and effective and transparent application of laws and regulations to protect IP rights and investments in innovation. Attempts to apply only the laws, regulations and norms of a particular country will likely fail.
It is salutary to recall that the European Commission recently commissioned a survey which concluded that it should not establish or support an IP financial market before the underlying IP asset market in Europe has been substantially improved and the rules of the underlying market are clear to the stakeholders.
We would do well to conduct a similar survey for the Asian region as we tread the tortuous path towards becoming an Asian IP hub.
The writer is a senior counsel with an active practice in intellectual property.