The 2007 Asia-Pacific Intellectual Property Forum took place at Regal Kowloon Hotel in Hong Kong on November 28 and 29. A total of 172 in-house counsel, law firm representatives and civil servants from throughout the region attended the event. There was also a strong presence of those from outside Asia such as the US, UK and Europe. The two-day conference focused on the efficiency of alternative dispute strategies and the enforcement of intellectual property, as well as how governments and corporations in Asia-Pacific deal with the problems and challenges of patent and infringements.
This year's IP Forum, "Addressing Asia's Intellectual Property Challenges" focused on pragmatic issues, showing that intellectual property has become a crucial matter for governments and corporations over the past 12 months. A number of IP professionals gathered together and shared their experiences in terms of litigation and enforcement of intellectual property issues. Sessions covered Mainland China, Japan, the Philippines, Korea, Indonesia and Vietnam, as well as the US - an indication of the close relations that exist between corporations and the international spread of piracy.
To litigate or not to litigate?
The Forum kicked off with a programme on IP litigation, in which Rembert Meyer-Rochow, senior attorney for Intel Semiconductor Ltd in Hong Kong, opened by asking "To litigate or not to litigate?" Jay Yang from Kim & Chang, Isabella Zhou from Swarovski Management and George Ribeiro from Vivien Chan & Co then gave detailed presentations and different perspectives, including the preparations and considerations needed for raids.
The delegates were told that in China there is always a dilemma when conducting a nationwide raid. Is it better or more efficient to have the assistance of the State Administration for Industry and Commerce (SAIC), or to act alone? "Of course, with the SAIC's involvement, preparations would be well coordinated in advance," said George Ribeiro.
However, procedures for requesting assistance from the SAIC could be complex and time-consuming.
"Actually, you can do it yourself. One of the benefits of doing it yourself is that it actually saves time instead of getting layers and layers of approvals," Ribeiro added.
Apart from decision-making on where to turn for assistance, Ribeiro said there is one crucial document that is required during raids - a certificate of infringement from the client which states that there has been an infringement. The party who initiates the raid must also guarantee they will be responsible for any damages which may be claimed against the SAIC for conducting a wrong raid. Such a certificate protects the SAIC from being accused while clearly distinguishing which party should take full responsibility should there be a mistake during a raid.
Another important point discussed in Ribeiro's presentation was famous trademark recognition in China, which has become more complicated in only the last few months. Now, Ribeiro said, "cogent evidence" must be submitted to the court in order to be granted recognized status. "Three months ago," he explained, "various high courts in the provinces actually gave a notice to the immediate court, which is the usual court for granting trademark recognition, to be more careful in making decisions." Cogent evidence is anything that can prove to the court the brand's reputation in China, such as advertisements, where the marks are publicly displayed.
Focusing on infringement in Korea
Jay Yang shared his experience in the decision-making process and preparations for a raid in Korea. His case study showed that the brand Botox had been widely infringed in that country. Most people think Botox is actually a generic term, as cosmetic products mark it as an ingredient and dictionaries define it in generic terms. In Yang's case study, the infringer, Votex, had an identical Korean pronunciation with Botox though the names were spelled differently.
"After deciding to litigate, we launched a campaign and posted notices in newspapers to say that this is our client's trademark, and we sent letters to the infringers and sent requests to the dictionary publishers to correct all the wrongs," Yang said.
Yet, to litigate this case, there were far more issues that needed to be considered. Finding the right target and the right time to take action is crucial, Yang said. "If it's too early, we're not prepared and we don't have sufficient evidence; but if we act too late, the more it becomes generic and the more difficult for us to file."
Challenges in brand protection
Yang's case indicates that the more famous a brand is, the more likely it will be infringed. This was echoed by Isabella Zhou from Swarovski, who said "it is good to be famous, but there's a price to pay."
"Fame also comes with problems and issues that we have to deal with in relation to brand protection," Zhou said. A lot of producers want to leverage the brand, and infringements can cause a decrease in the brand's value, seriously damaging the public image. It is, therefore, necessary for Swarovski to invest heavily in IP protection. The company will register their brand whenever and wherever they can worldwide, as this is an important weapon for them to fight infringement.
As in-house counsel, Zhou said, it is essential to examine the pros and cons before litigation and to determine what alternative action is available. Apart from that, factors such as the size of the infringers, similarity of the products, likelihood of winning the case and available resources should also be considered.
"Lawyers are very expensive, and we need to pay our lawyers well. Otherwise, how can they support you?" she said.
Cultural differences, Zhou went on to say, also affect decision-making on litigation. In Japan, for example, if there is an infringement, a warning is issued which usually brings an end to the activity. However, in China that is not the case. Here, the wrongdoers tend to go underground for a period of time before emerging again, which requires IP litigation to drag on.
Alternative Dispute Resolution options
Alternative Dispute Resolution (ADR) was also a key talking point at the Forum. John Lee, a solicitor with Simmons & Simmons, discussed the strengths and weaknesses of ADR alternatives. "ADR is increasingly becoming an appropriate dispute resolution method especially in terms of mediation," Lee said.
Negotiation is the method applied in mediation, allowing parties to reach an agreement on a business dispute. Since it is based on consensus, the outcome of the dispute is usually positive. The strengths, according to Lee, are that mediation is relatively quicker and more economical. It also preserves the relationship of the parties while enforcing communications. Flexibility is another advantage, too, allowing arrangements to be made at short notice.
"While not essential, it is desirable to have an ADR clause as parties are more likely to agree on ADR before disputes arise. It provides more certainty and allows you to design a process that fits your IP disputes," Lee said.
Those involved can select a third party to act as a mediator. The ultimate goal is to maintain relationships and to come up with a resolution. Nevertheless, mediation's weaknesses are that it is not always binding and there are no guarantees of confidentiality. In contrast, in arbitration a dispute between two or more parties is determined judiciously. While mediation lacks confidentiality, arbitration guarantees privacy. However, the downside for arbitration is that the judge does not draw parties together in an arbitral consensus whereas in mediation, parties are encouraged to work together, resolve the dispute and maintain the relationship. Arbitration also takes up a lot of money and time and, of course, strains relationships.
Regional and cross-border enforcements
The Forum also covered regional and cross-border enforcements, highlighting the positive improvements and efficiency in dealing with piracy in China, Malaysia and Korea. Alex Cho, a foreign legal counsel for Kim & Chang, praised the competence of the Korea Customs Office, while Lewis Ho, a Simmons & Simmons consultant, commented that China has made huge inroads in fostering enforcements on intellectual property in recent years. "Judges who deal with IP cases are all well trained and familiar with the regulations, and they know a lot about the related backgrounds," Ho said.
However, as the rate of imported counterfeits is going up, cross-border enforcement has become a challenge for governments. "Most of our counterfeit products are imported into our country," said Cho. Dealing with cross-border issues must, therefore, require transparency and close cooperation and agreements between countries.
In the Philippines, the government lacks political will in combating piracy, which makes enforcement efforts strenuous, said Rogelio Vinluan from Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW). "Corruption is a continuing problem," he stated, adding that the government needs an adequate law in place to help with enforcement.
Meanwhile, conflicts of interest and cultural differences always exist in cross-border enforcement, said Stephen Chandler, the executive director of security and corporate legal services with The Hong Kong Jockey Club. Lack of transparency during cooperation may lead to miscommunication, which is not only costly but could hinder and jeopardize the process of enforcement. It is essential to have a thorough understanding of the other party's environment when working with them, he said.
"There are some countries where the bureaucracy is very efficient. You can make formal complaints, and they will take action, whereas there are some bureaucracies in which you can make as many complaints as you want, and they won't go anywhere. It is important to establish a procedure which both parties are comfortable to work with." Chandler continued.
Conference highlights
Other sessions at the Forum included discussions on strategies and concerns on choosing IP counsel as well as IP practices. While the former included suggestions and advice on the measurements of the effectiveness of IP service providers, the latter focused on efficiency in managing an IP portfolio. Yanagida & Associates hosted a panel discussion on Japan, focusing on recent developments and strategies in obtaining and enforcing patents there. Brinks Hofer Gilson & Lione ran a session on US litigation issues, while speakers from Shearn Delamore & Co, Biro Oktroi Roosseno, and Pham & Associates gave presentations on Malaysia, Indonesia and Vietnam respectively. All these sessions gave professionals valuable insights and updates on how various countries are addressing intellectual property challenges.