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Intellectual Property Protection in a Rapidly Globalising Economy Asset or Liability? Presentation & Dialogue with Prof CC Hang Chairman, Intellectual.

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Presentation on theme: "Intellectual Property Protection in a Rapidly Globalising Economy Asset or Liability? Presentation & Dialogue with Prof CC Hang Chairman, Intellectual."— Presentation transcript:

1 Intellectual Property Protection in a Rapidly Globalising Economy Asset or Liability? Presentation & Dialogue with Prof CC Hang Chairman, Intellectual Property Office of Singapore 7 April 2004

2 No. of Patents Granted to Residents (IMD World Competitiveness Yearbook 2003*) No. of patents granted to residents 123,978 83,090 34,052 20,094 18,328 16,340 11,290 4,491 3,983 3,742 63Rank Japan (1 st ) US (2 nd ) Korea (3 rd ) Taiwan (4 th ) Germany (5 th ) Russia (6 th ) France (7 th ) UK (8 th ) Italy (9 th ) China (10 th ) Singapore (45 th ) *Based on no. of patents granted to residents (average ) No. of Patents granted to Singapore residents in 2003: 240

3 No. of Patents Granted Per Million Population by the US Patents and Trademark Office (WEF Global Competitiveness Report 2003) Rank USA (1 st ) Japan (2 nd ) Taiwan (3 rd ) Sweden (4 th ) Switzerland (5 th ) Israel (6 th ) Finland (7 th ) Germany (8 th ) Canada (9 th ) Singapore (10 th ) No. of patents granted per capita

4 No. of Patents Granted to Residents per 1000 R&D Persons (IMD World Competitiveness Yearbook 2003) Rank Taiwan (1 st ) Korea (2 nd ) Japan (3 rd ) New Zealand (4 th ) South Africa (5 th ) Thailand (6 th ) Italy (7 th ) Chile (8 th ) Austria (9 th ) France (10 th ) Singapore (42 nd ) No. of patents granted per 1000 R&D persons

5 Importance of IP – the IP Value Chain Creation Creation Ownership Ownership Exploitation Exploitation Protected IP IP-savvy culture and environment Commercial Success Technological Success Awareness Registration and Enforcement Creation and Acquisition IP Value Chain Exploitation

6 Stac Electronics v Microsoft Corp 1993 – Stac Electronics (US) sued Microsoft (US) for software patent infringement 1993 – Stac Electronics (US) sued Microsoft (US) for software patent infringement The Stac patent involved software data- compression technology, used in Microsofts then-standard DOS operating system The Stac patent involved software data- compression technology, used in Microsofts then-standard DOS operating system Verdict: US$120mil against Microsoft awarded in 1994 Verdict: US$120mil against Microsoft awarded in 1994 Microsofts patent applications jumped from 6 to 60 per year! Microsofts patent applications jumped from 6 to 60 per year!

7 Eolas Technologies v Microsoft Corp 1999 – Eolas Technologies (US) sued Microsoft (US) for patent infringement 1999 – Eolas Technologies (US) sued Microsoft (US) for patent infringement Eolas alleged that the Microsoft infringed on its patents when enabling Internet Explorer to use plug-ins and applets in the software Eolas alleged that the Microsoft infringed on its patents when enabling Internet Explorer to use plug-ins and applets in the software Verdict: US$521mil against Microsoft awarded in 2003 Verdict: US$521mil against Microsoft awarded in 2003 Microsoft has appealed and the case is pending Microsoft has appealed and the case is pending

8 Priceline v Expedia Priceline (US) sued Expedia (US) in 1999 for infringement on its name- your-own-price business model Priceline (US) sued Expedia (US) in 1999 for infringement on its name- your-own-price business model The dispute was subsequently settled out-of-court, with Expedia agreeing to pay royalties to Priceline The dispute was subsequently settled out-of-court, with Expedia agreeing to pay royalties to Priceline

9 What is Intellectual Property (IP) Creation that is original and innovative Legally-protected in the form of Patents Copyright © Trademarks TM, ® Designs Layout-Designs of Integrated Circuits Geographical Indications Trade Secrets

10 Globalisation and Ecommerce – Challenges for IP protection Ecommerce occurs globally Ecommerce occurs globally IP can be used and licensed in many countries simultaneously, due to wide- reaching potential customer base via the internet IP can be used and licensed in many countries simultaneously, due to wide- reaching potential customer base via the internet Global nature creates challenges in obtaining and enforcing IP rights in different countries Global nature creates challenges in obtaining and enforcing IP rights in different countries

11 Global Challenges in Obtaining IP Rights Differences on what can be patented Differences on what can be patented E.g. In the US, business methods can be patented. E.g. E.g. In the US, business methods can be patented. E.g. Amazons one-click purchasing Amazons one-click purchasing eBays patent on information presentation and management in an online trading environment eBays patent on information presentation and management in an online trading environment Business methods are not currently patentable under the EU system Business methods are not currently patentable under the EU system

12 Different rules before patent can be granted First-to Invent v First-to-File First-to Invent v First-to-File The US uses the first-to-invent rule. The US uses the first-to-invent rule. I.e. The first inventor who conceives and the technology or invention to practice. I.e. The first inventor who conceives and the technology or invention to practice. Other countries, e.g. the EU and Singapore, follows the first-to-file rule. Other countries, e.g. the EU and Singapore, follows the first-to-file rule. I.e. The patent is granted to the first person who files a patent application for an invention, regardless of who invented the technology. I.e. The patent is granted to the first person who files a patent application for an invention, regardless of who invented the technology.

13 Global Challenges in Enforcing IP Rights Difficult to find the infringer and enforce IP rights that are violated on the Internet Difficult to find the infringer and enforce IP rights that are violated on the Internet Unclear which countrys courts will have jurisdiction over disputes relating to E- Commerce and IP Unclear which countrys courts will have jurisdiction over disputes relating to E- Commerce and IP Laws affecting IP vary from country to country so levels of protection may be different. Laws affecting IP vary from country to country so levels of protection may be different.

14 Trademarks and Domain Names Due to the Due to the higher costs of patentinghigher costs of patenting difficulty in obtaining patents in some instancesdifficulty in obtaining patents in some instances Companies ought to maximise their IP assets by obtaining strong protection for their Trademarks and Domain names. Companies ought to maximise their IP assets by obtaining strong protection for their Trademarks and Domain names.

15 Maximising your IP Assets Globalisation is unstoppable – at the core nature of ecommerce Globalisation is unstoppable – at the core nature of ecommerce IP assets needs to be maximised to overcome differences in global IP regimes IP assets needs to be maximised to overcome differences in global IP regimes IP must be used as a dynamic strategic tool to advance a companys interests. IP must be used as a dynamic strategic tool to advance a companys interests.

16 Strategic Use of IP Ownership Market entry barrier Market entry barrier Cost saving Cost saving Source of income Source of income Business expansion Business expansion

17 Case Study 1– Preventing others IP from becoming your liability Macronix International (Headquarters: Taiwan) Macronix International (Headquarters: Taiwan) US$1bil semi-conductor company founded in 1989US$1bil semi-conductor company founded in 1989 Patent portfolio of 1200 patents worldwidePatent portfolio of 1200 patents worldwide To avoid IP from becoming their liability, To avoid IP from becoming their liability, In-house legal/IP team of 15 members, 13 of which are IP-trainedIn-house legal/IP team of 15 members, 13 of which are IP-trained Defended itself against Atmel (one of top 10 semiconductor companies) in 5 US litigation cases. Won all 5 casesDefended itself against Atmel (one of top 10 semiconductor companies) in 5 US litigation cases. Won all 5 cases

18 Case Study 2 – Turning potential liability into mutual asset Samsung Electronics (Korea) and SanDisk Corp (US) Sued each other in California and Texas courts in 2002 over patent rights Both sides found that it would be more beneficial to fight together rather than against each other Dismissed the lawsuits and signed a seven-year extension to a deal that covers licensing and supply of flash memory technology

19 Case Study 3 – Profiting from IP IBM (US) IBM (US) In 1991, IBM was a net payer for the IP of othersIn 1991, IBM was a net payer for the IP of others IBM decided that it could and should adopt strategies to maximise its own IP assetsIBM decided that it could and should adopt strategies to maximise its own IP assets Embarked on an aggressive IP effort to ensure that patents were carefully mined, and all forms of IP were exploited through licensingEmbarked on an aggressive IP effort to ensure that patents were carefully mined, and all forms of IP were exploited through licensing Close to 6,000% growth in annual licensing revenue, from US$30mil in 1990 to US$1.8bil todayClose to 6,000% growth in annual licensing revenue, from US$30mil in 1990 to US$1.8bil today

20 Conclusion: IP protection – Asset or Liability? Globalisation presents new challenges in obtaining and enforcing IP rights Globalisation presents new challenges in obtaining and enforcing IP rights IP is an asset or liability - Depends on the extent of your company using IP as a strategic tool IP is an asset or liability - Depends on the extent of your company using IP as a strategic tool Proactive approach to IP ownership and use is imperative for IP to be an asset Proactive approach to IP ownership and use is imperative for IP to be an asset

21 Thank you


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