6 Nov 2013
Asia’s IP Promise
Hong Kong is positioned to
When Cyprus-based Outfit7 sought to protect the intellectual property (IP) rights of its popular Talking Friends franchise, a character-based app that hit one billion downloads in June 2013, the entertainment company chose the Hong Kong team at Baker & McKenzie to help it navigate through Greater China and the Asia-Pacific region.
“We chose the team in Hong Kong because they would help us solve the problem of piracy at source,” said Outfit7 founder and CEO Samo Login, who added that, as such, they were the most “relevant choice for Greater China.”
The firm will focus on the strategy of protection and enforcement of Outfit7’s IP rights in the Asia-Pacific region, which is one of its fastest-growing markets, according to Loke-Khoon Tan, Head of Baker & McKenzie’s IP Practice for Asia-Pacific, Hong Kong and China.
“We are being asked to help strategise in terms of their IP rights for Greater China and to help them resolve some of the more difficult matters that the company is facing,” said Mr Tan. “We are looking primarily at branding and trademark matters, but we also assist the client on copyright and patent issues.”
Mr Tan says that with more than 20 years of experience in China's IP market, his firm’s ability to assist across the Asia-Pacific region, including the Chinese mainland, helps give it a competitive edge by providing its clients “big-picture solutions.” He added that there “is a comfort level and the confidence that I can also advise them widely across the region.”
The Right Protection
Loke-Khoon Tan, Head of Baker & McKenzie’s IP Practice for Asia-Pacific, Hong Kong and China
Calling the city an “IP-safe environment,” Mr Tan points to Hong Kong’s common law system, mature jurisdiction and customs department, which takes action on IP infringement.
Billy Lam, Vice-President, Business Development for Transpacific IP Group Ltd’s Hong Kong office, agrees. He believes that Hong Kong is well-positioned to become a strong IP marketplace, thanks to its legal system, simple tax regime and geographical location, connecting IP buyers and sellers.
Mr Lam also points to the city’s robust IP protection; the 2012-2013 Global Competitiveness Report published by the World Economic Forum ranked Hong Kong 11th out of 144 economies in IP protection. Access to financing and Hong Kong’s knowledge-based economy, including bilingual IP practitioners, are added advantages.
“Hong Kong has long engaged in different kinds of IP transactions, such as copyright trading, brand licensing and franchising, design services and technology transfer,” said Mr Lam. “In 2010, Hong Kong exported US$1 billion in technology to mainland China. That put Hong Kong sixth in the world in taking technology to China.”
Billy Lam, Vice-President, Business Development, Transpacific IP Group Ltd, Hong Kong
Mr Lam believes that, with the increasing number of IP buyers emerging from Asia, particularly the Chinese mainland, “there is a significant paradigm shift visible, where Asia is fast-becoming the centre of a global IP marketplace.”
While IP valuation is becoming increasingly popular, Mr Tan believes Asia is still lagging behind other markets in using an IP portfolio to better assess a company during mergers and acquisitions (M&A).
“In the context of an M&A, where you are acquiring a company and the related IP assets, IP is not a big factor, and it should be in a lot of these discussions,” Mr Tan said.
Room for Growth
For many start-ups and SMEs in Hong Kong, IP isn’t given enough focus.
“Hong Kong’s SMEs generally are not paying enough attention to their intellectual properties and their impacts to the value of a corporation,” Mr Lam said. “IP trading is still relatively new to Hong Kong SMEs. If only these organisations would find out and engage positively to create and protect their corporate value based on intellectual properties, Hong Kong would become a genuine IP marketplace. The growth potential is exponential.”
General Assembly, a company that provides educational courses to help clients acquire practical skills in technology, business and design, offered introductory courses on IP law three times in the past year.
“In our experience, it is an area that start-ups need help in because many new companies cannot afford to consult lawyers directly,” said Allison Baum, Director, General Assembly Asia. “But protecting their brand, their product and their other IP is essential to long-term success,” Ms Baum said.
While start-ups may not have that much money to spend on IP, Mr Tan believes that it is an area that deserves more focus.
“Start-ups in Asia-Pacific normally think about IP only when something happens and it is often too late,” Mr Tan said. “Some people are not aware of IP as a cost of doing business."
He says that the best practice would be to register your IP and, if you find infringements, “fight hard and send a deterrent message to the market.”