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Saturday, March 18, 2017

Social media advertising in Vietnam

Image result for youtube adverts
In countries without fully operating democracies, the conflict between freedom of speech and IP rights sometimes comes to the fore. 
In Vietnam, Decree 72 on social media bans information that it deems anti-government, damaging to national security or which destroys national unity.  A battle has been brewing for some time due to fast growing social media use. In Vietnam citizens are wary of criticizing the government but the first social media protest did erupt 2 years ago over protection of trees in the capital Hanoi. Two years on, after the decree, what would be considered illegal content is becoming more widespread.
So the government is seeking to prohibit businesses from supporting these sites through their advertising. They are specifically targeting YouTube, Facebook and other social media whom they say publish "toxic" anti-government information. First state-owned dairy Vinamilk and Vietnam Airlines withdrew adverts. Then the information and communication minister spoke with a number of foreign companies including the Unilever, Ford and Yamaha to request them to halt YouTube advertising. He alleged there are over 8,000 anti-government videos on YouTube, of which only 42 had been partially blocked by the site owner Google.
Computerized ad placement systems target ads to specific audiences so advertisers rarely know or control what content is shown with their ads. Google says it does review blocking requests from governments carefully. Industry groups like the Asia Internet Coalition have started that the open nature of the internet is where its value lies. Vietnam, without the vast resources China has, has been unable to build a firewall, to block content it doesn't like. Finally now social media's free speech basis is running into conflict with a government that seeks to control how its citizens and others convey their thoughts about the country and its government.

Thursday, February 23, 2017

Cambodian government logo disputes

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Cambodia’s government is wading into trademark disputes. Two finance institutions Acleda Bank and Prasac Microfinance have been asked to change their logos to differentiate them from state institutions. Prime Minister Hun Sen himself has threatened Prasec, the largest microfinance institution in the country. He indicated the central bank required it and threatened to withdraw their trade licences if they failed to comply.
 
Image result for Acleda Bank logoThe logic is that the logos are too similar the Ministry of Economy and Finance’s logos and “If people start believing that these institutions belong to the government, then they think they don’t need to pay back their debts, which is very detrimental to the industry,” has said Chea Serey, the director-general of the National Bank of Cambodia. Some have questioned why this is such a big issue, suggesting it is a way to emphasize borrower obligations obliquely. Both institutions face a multimillion USD bill for the change which impacts signage at hundreds of branches and replacing bank cards and documents, apart from the advertising and marketing costs of the rebrands.  

Monday, February 13, 2017

New online platform rules in Indonesia

Image result for online shoppingMassive ecommerce growth in Indonesia has been accompanied by a rise in online infringements. There is a site blocking system in place but this requires the IP Office to issue a formal request to the Ministry of Communication and Informatics so is impractical. Now this Ministry has issued a new Circular Letter requiring online platform operators to take responsibility for their own platforms.
 
The letter is titled Limitations and Responsibilities of Platform Providers and Merchants Who Engage in Electronic Commerce While Utilizing User-Generated-Content Platforms. It outlines a wide variety of prohibited content and illegal products which may not be put or traded on online platforms.

It sets out obligations and responsibilities for the platform operators.  They must use online service terms, operate complaint procedures, there are reporting requirements and they must take down illegal material (within 14 days for IP violations). There are overriding obligations to manage and monitor their platforms professionally and responsibility.

Merchants are required to provide information, observe online service terms and are prohibited from uploading banned content and products.

Many platforms are already operating with terms of service that do much of this but the time frames vary; this now provides legal teeth for online enforcement and should help IP holders taking action.

Wednesday, February 8, 2017

U.S. Chamber International IP Index - the SE Asian economies



The US produces a number of reports on IP each year. The U.S. Chamber International IP Index here focuses on how IP facilitates innovative and creative economies. 45 countries' policies are studied to see which have the strongest IP ecosystem, from the perspective of creating economic growth. Areas studied included patenting, trade secrets and market access, counterfeiting and piracy, IP law development and IP cooperation.  IP Komodo hunted out the major SE Asian economies to see what was said.

The Philippines, scored highly in the SEA region at 34/45 countries. Not only does it have the basic systems in place there is a culture of improvement in IP enforcement and interagency and international cooperation. Non deterrent IP penalties, mixed enforcement results, gaps in life sciences and content-related IP protection, rampant digital piracy and some trademark system weaknesses still exist however.

Indonesia ranks at 39/45 countries and is one of the few economies falling from previous years reports. Trademark protection is regarded as a strength (although subject to difficulties protecting well known marks); however the patent system weaknesses, copyright piracy and weak international IP cooperation are cited as problems which contributed to the low score.

Vietnam, at 37/45 and trending upwards, has a basic IP framework in place but problems with the usability of its enforcement system, weak copyright protection and gaps in life sciences IP protection.

Thailand ranks at 40/45th, but trending upwards. While many elements are in place to protect IP, patent backlogs and gaps in the law, life sciences IP protection, an incomplete digital IP framework, and high counterfeiting and piracy rates, with low deterrent sentences are seen as the main problem areas.

These reports can often be hard to read accurately, but there is a lot of detail in the report, so at least some level of quality research is behind it. The precise rankings are perhaps arguable, but the general problems facing IP holders in SE Asia are probably fairly accurate.

Monday, January 30, 2017

New online IP site blocking rules in Thailand

Image result for Thai  Ministry of Digital Economy and Society

Part of new amendments to the Thai Computer Crime Act passed by the National Assembly in December 2016 aim to reduce online IP infringement. The relevant IP provisions empower the government to go to Intellectual Property and International Trade Court (IP Court) to seek an order to block sites that infringe others' IP. Once the site blocking order is granted, the government, through officers appointed by the Minister of Digital Economy and Society can then arrange to block the site by technical means or by requiring ISPs to do so.  These new rules take effect in May 2017.


 

Thursday, January 26, 2017

Damages for trademark infringement in Indonesia

Image result for V-GEN MEMORY card
A recent trademark infringement case helps interpret damages further.  The Plaintiff owns V-GEN and V-GEN MEMORY trade mark registrations in Indonesia in class 9 for memory cards. In 2012, the Plaintiff found counterfeit memory cards sold by shops owned by the Defendant.  A criminal action was filed and the Jakarta district criminal court declared the Defendant guilty and sentenced him to 10 months imprisonment. This Jakarta High Court on appeal increased the sentence to 11 months, which was confirmed by the Supreme Court.

The Plaintiff filed a civil case claiming the counterfeiting  caused considerable damage to his business, claiming IDR 16,340,000,000 damages (over USD1 million) due to profit falls, promotion expenses and intangible damages. The Central Jakarta Commercial Court granted parts of the Plaintiff's claims. The Judges declared the marks well known and infringed and then ordered the Defendant to pay IDR 2.000.000.000 (USD140,000) to the Plaintiff. The amount was the promotional expenses of the Plaintiff in magazines, at IDR 200,000,000 per month x 10 months. The Judges denied the rest of the Plaintiff claims.

The Plaintiff appealed the smaller damages award but the Supreme Court refused his appeal.  In fact this was a decent sized damages award based on evidence. This is typically the only way to recover damages - speculative or unsubstantiated claims usually don't work.  It is perhaps odd that the claim was not based on losses or profits - as it was in the Hitachi trade secrets case - see here.

Monday, January 16, 2017

Vietnam local trademark growth

Vietnam saw double digit trademark filing growth in 2015. 67,797 application classes were filed in total, according to official date released by WIPO in its annual report. But all this growth came from local Vietnamese trademark owners. Other SE Asian markets generally show lower filing volumes than Vietnam, probably because some are new to Madrid, (e.g. Philippines) or not yet fully operating Madrid (e.g. Indonesia, Thailand):

Thailand    52,344
Indonesia  49,534
Philippines 42,936
Malaysia    35,923
 
Foreign applicants in Vietnam comprised around 33% of the total applications, suggesting strong local brand filings (compared to 36% in Thailand). Non residents also filed well over half the applications filed in Vietnam, through Madrid. Vietnam is the oldest Madrid country in the SE Asian region so this is not surprising.
 
Vietnam is a one of the top countries word wide for filing services marks interestingly.
 
However fewer than 10% of the local applicant trademark filings led to protection abroad, suggesting a lack of international focus for local brands.  Only 63 Madrid applications came from Vietnam, with for example 29 from relatively new Madrid member Philippines. Vietnam will be keen to grow its overseas brand filings for its companies to compete on a regional and global level.
  

Thursday, January 12, 2017

Cambodia joins Hague

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The Government of the Kingdom of Cambodia deposited its instrument of Accession to the Geneva (1999) Act of the Hague Agreement Concerning the International Registration of Industrial Designs late in 2016. The 1999 Act will enter into force on 25 February 2017. Designs are an increasingly useful tool for local companies operating in SE Asia. It is a general pattern that emerging economies struggle to develop robust patents. However designs are an easier level of IP protection to obtain and so are more commonly used to protect products by local companies. In addition SE Asia's creative and aesthetic skills make for lots of unique and interesting local designs for products. Until now few sought design protection, perhaps beyond their local market due to cost. Having ASEAN members join Hague is a core IP goal for the region. A boom in design filings can be expected as more countries join in this region.

 

Monday, January 9, 2017

Patent growth in Indonesia

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WIPO's 2015 data report on World Patent Indicators shows an interesting trend for Indonesia.

Patent filings in the country jumped by over 14% in 2015 over the previous year, the second largest % rise worldwide after China. This is well over its 7.8% long term growth trend. 9,153 patent applications were made in total. 1,058 of them (nearly 12%) were by Indonesian residents. However two thirds of the growth came from foreign applications. Principally this is from Japan which filed over a quarter of all applications in Indonesia.

By comparison total patent filings in other SE Asian markets were as follows:

Malaysia 7,727
Vietnam 5,033
Philippines 3,734
Thailand 7,930

This will be good for government revenue and surely reflects increasing foreign investment.

Grant rates however remain low at 1911 in 2015, suggesting an increasing backlog. The grant to application ratio of Indonesia is lower than other countries in the region - Thailand, Philippines and Malaysia are showing far higher grant levels. This needs to be addressed to avoid longer delays. The new patent law might help.  

But whilst domestic Indonesian applications rose by 4%, only 6 PCTs were filed by Indonesians, demonstrating how little international technology focus the country has. Compared with 17 PCTs from Philippines, 97 from Thailand and 15 from Vietnam. Indeed, one worries that some of the local inventor applications might not withstand foreign examination.

Saturday, December 24, 2016

Indonesian lawyers fight it out for their own brand



When lawyers get into legal disputes with each other, it tends to get messy. Indonesia has in the past struggled to maintain a single bar association for lawyers. In recent years, the Perkumpulan Advokat Indonesia / Indonesia Lawyers Association has been the only one.

However more recently the Persatuan Advokat Indonesia / Indonesia Lawyers Union appeared as an offshoot if the Association. They were both using the same logo along with a near identical name. The Association founded on 20 August 1964, filed trademarks for PERADIN under the name of Persatuan Advokat Indonesia in 2010 in classes 45, 41, 38 and 16. The Union was an offshoot following an internal dispute.

The Association sued the Union claiming infringement as the Union offered services as a professional organization and ran seminars. The Association also claimed that the Union used the PERADIN mark on signs, letterheads, as well as on public announcements. The Association sought IDR 5 billion as intangible damages and a public apology.

The Union filed a motion to dismiss the Association's claim. They argued that the Association had no legal standing to file the claim using spurious arguments over legitimacy. The Union set out the history, that whilst the Association was the oldest Indonesian lawyers’ organization since 30 August 1964 under the name of ‘Persatuan Advokat Indonesia’ (PERADIN), in 2010, there was an internal conflict within the organization which caused them to split into two camps, one camp (the Association) which led by Frans Hendra Winarta, who registered the original name of the organization.
 
The other camp (the Union), led by Ropaun Rambe, used the name ‘Perhimpunan Advokat Indonesia’ (PERADIN). Ropaun Rambe had registered a Copyright for the PERADIN logo No. 048131 on 2 August 2010 so claimed that they rightfully used the PERADIN logo for their activities. The Union filed a counterclaim too, claiming that the Association’s action to register the name PERADIN as a trade mark is incorrect because as a professional association, the organization does not use the trade mark registration to actually trades in the services.  The Union requested the Court to declare that it was the legal body rightfully using and holding through its Copyright recordal the name PERADIN. The Union sought to cancel the Association’s PERADIN trade mark registrations because it infringed the Union’s Copyrighted Work.

Of course the Central Jakarta Commercial Court rejected the Union's motion to dismiss and their counterclaim. The Panel of Judges accepted some parts of the Association's claim by declaring that the Union had infringed the Association's PERADIN trade mark. The Panel ordered the Union to cease any activity that uses the PERADIN trade mark and to destroy any goods that use the logo. The Panel also ordered the Union to pay IDR 1 million per day as a penalty if it did not comply with the decision.

The Union filed an appeal with the Supreme Court but this was rejected too. They rightly told the Union that they should have chosen a different brand.

The interesting point is over the conflict of laws between trademarks and copyright. Indonesian infringers often register and cite copyrights in defence to justify use of similar marks. The clear point now is that copyrights cannot override trademark rights.

Thursday, December 15, 2016

Patent annuities in Indonesia

At last with the new patent law there is clarity on the annuities issue. See here for the previous problem. A new Patent Office Circular covers annuities under the new Patent law enacted in August 2016. There are three situations:

Firstly the old law applies to patents filed before the new Patent Law came into force on 26th August 2016. There is no clarity in whether the government will continue to demand payments as they did in the past, but presumably not. 

Article 126 of the New Law applies to patent annuities due after that date.

There is a transition period for annuities due from 26 August 2016 until 30 December 2016. Patentees may pay these in 2016 along with 2017 annuities. Failure to pay these under Article 134(1) will lead to the patent being deemed abandoned. 

Patent holders will need to pay specific attention to annuities due since August.

 

 

Monday, December 12, 2016

Vietnam taxes trademark licenses

Image result for taxA controversial tax issue on IP has arisen in Vietnam. Trademark licensees traditionally do not pay VAT on the licensee fees because this is seen as part of technology transfer, a way to attract investment. However several triggers have led to a change. Vietnam is looking at its IP system in light of the TPP and EU trade deals. Previously VAT was not charged and the position somewhat unclear. A number of companies had ongoing discussions or investigations with the tax authorities.

Now the Ministry of Finance has issued a letter to make it clear that VAT applies on trademark license fees. The logic is that assignment of a mark is a sale so does not attract VAT, but licensing is an income based transaction, so Vietnam will charge VAT. And trademarks are not necessarily technology so are not exempt.  

There is resistance from business. However ultimately the cost is likely to fall on domestic licensees and passed on to Vietnamese consumers.

Accountants are advising companies to review their contracts because the issue could be retroactive. If all taxes were declared by the deadline of November 7th, then prior license fees are not affected, even if tax was not paid. But if taxes were not filed and paid at that date the letter now applies and could apply to all undeclared license fees.