Intellectual Property Intellectual Property ProtectionProtection
in ain a
Rapidly Globalising Rapidly Globalising EconomyEconomy
Asset or Liability?Asset or Liability?
Presentation & Dialogue withPresentation & Dialogue with Prof CC HangProf CC Hang
Chairman, Intellectual Property Office of SingaporeChairman, Intellectual Property Office of Singapore7 April 20047 April 2004
No. of Patents Granted to Residents No. of Patents Granted to Residents (IMD (IMD World Competitiveness Yearbook 2003*)World Competitiveness Yearbook 2003*)
No. of patents granted to No. of patents granted to residentsresidents
123,978123,978
83,09083,090
34,05234,052
20,09420,094
18,32818,328
16,34016,340
11,290 11,290
4,491 4,491
3,9833,983
3,7423,742
63
RankRank
Japan (1Japan (1stst) )
US (2US (2ndnd) )
Korea (3Korea (3rdrd) )
Taiwan (4Taiwan (4thth) )
Germany (5Germany (5thth) )
Russia (6Russia (6thth) )
France (7France (7thth) )
UK (8UK (8thth))
Italy (9Italy (9thth))
China (10China (10thth) )
Singapore (45th)
*Based on no. of patents granted to residents (average 1998-2000)
No. of Patents granted to Singapore residents in 2003: 240
No. of Patents Granted Per Million Population by No. of Patents Granted Per Million Population by the US Patents and Trademark Office the US Patents and Trademark Office (WEF Global Competitiveness Report 2003)(WEF Global Competitiveness Report 2003)
RankRank
USA (1USA (1stst) )
Japan (2Japan (2ndnd) )
Taiwan (3Taiwan (3rdrd) )
Sweden (4Sweden (4thth) )
Switzerland (5Switzerland (5thth) )
Israel (6Israel (6thth) )
Finland (7Finland (7thth) )
Germany (8Germany (8thth) )
Canada (9Canada (9thth))
Singapore (10th)
No. of patents granted per capitaNo. of patents granted per capita
301301
273273
241241
190190
189189
165165
155 155
137137
109109
97
No. of Patents Granted to Residents per No. of Patents Granted to Residents per 1000 R&D Persons 1000 R&D Persons
(IMD World Competitiveness Yearbook 2003)(IMD World Competitiveness Yearbook 2003)
RankRank
Taiwan (1Taiwan (1stst) )
Korea (2Korea (2ndnd) )
Japan (3Japan (3rdrd) )
New Zealand (4New Zealand (4thth) )
South Africa (5South Africa (5thth) )
Thailand (6Thailand (6thth) )
Italy (7Italy (7thth) )
Chile (8Chile (8thth) )
Austria (9Austria (9thth))
France (10th)
Singapore (42nd)
No. of patents granted per 1000 R&D personsNo. of patents granted per 1000 R&D persons
367.7367.7
263.4263.4
221.6221.6
97.697.6
95.295.2
81.381.3
73.8 73.8
69.469.4
65.665.6
58.0
10.7
Importance of IP – the IP Value Chain Importance of IP – the IP Value Chain
CCreationreation
OOwnershipwnership
EExploitationxploitation
Protected IP
IP-savvy culture and
environment
CommercialSuccess
Technological Success
Awareness
Registration and Enforcement
Creation and Acquisition
IP ValueChain
Exploitation
Stac Electronics v Microsoft CorpStac Electronics v Microsoft Corp
1993 – Stac Electronics (US) sued Microsoft 1993 – Stac Electronics (US) sued Microsoft (US) for software patent infringement(US) for software patent infringement
The Stac patent involved software data-The Stac patent involved software data-compression technology, used in Microsoft’s compression technology, used in Microsoft’s then-standard DOS operating systemthen-standard DOS operating system
Verdict:Verdict: US$120mil against Microsoft US$120mil against Microsoft awarded in 1994awarded in 1994
Microsoft’s patent applications jumped from 6 Microsoft’s patent applications jumped from 6 to 60 per year! to 60 per year!
Eolas Technologies v Microsoft CorpEolas Technologies v Microsoft Corp
1999 – Eolas Technologies (US) sued 1999 – Eolas Technologies (US) sued Microsoft (US) for patent infringement Microsoft (US) for patent infringement
Eolas alleged Eolas alleged that the Microsoft infringed on that the Microsoft infringed on its patents when enabling Internet Explorer to its patents when enabling Internet Explorer to use plug-ins and applets in the softwareuse plug-ins and applets in the software
Verdict:Verdict: US$521mil against Microsoft US$521mil against Microsoft awarded in 2003awarded in 2003
Microsoft has appealed and the case is Microsoft has appealed and the case is pendingpending
Priceline v Expedia Priceline v Expedia
Priceline (US) sued Expedia (US) in Priceline (US) sued Expedia (US) in 1999 for infringement on it’s “name-1999 for infringement on it’s “name-your-own-price” business modelyour-own-price” business model
The dispute was subsequently settled The dispute was subsequently settled out-of-court, with Expedia agreeing out-of-court, with Expedia agreeing to pay royalties to Pricelineto pay royalties to Priceline
What is Intellectual Property (IP)What is Intellectual Property (IP) Creation that is original and innovative
Legally-protected in the form of • Patents• Copyright ©• TrademarksTM, ®• Designs• Layout-Designs of Integrated Circuits• Geographical Indications• Trade Secrets
Globalisation and Ecommerce – Globalisation and Ecommerce – Challenges for IP protection Challenges for IP protection
Ecommerce occurs globally Ecommerce occurs globally IP can be used and licensed in many IP can be used and licensed in many
countries simultaneously, due to wide-countries simultaneously, due to wide-reaching potential customer base via reaching potential customer base via the internetthe internet
Global nature creates challenges in Global nature creates challenges in obtainingobtaining and and enforcingenforcing IP rights in IP rights in different countries different countries
Global Challenges in Global Challenges in Obtaining Obtaining IP RightsIP Rights
Differences on what can be patentedDifferences on what can be patented
E.g. In the US, business methods can be E.g. In the US, business methods can be patented. E.g. patented. E.g.
Amazon’s “one-click” purchasingAmazon’s “one-click” purchasing eBay’s patent on information presentation eBay’s patent on information presentation
and management in an online trading and management in an online trading environment environment
Business methods are not currently Business methods are not currently patentable under the EU systempatentable under the EU system
Different rules before patent can be grantedDifferent rules before patent can be granted
First-to Invent v First-to-File First-to Invent v First-to-File
The US uses the The US uses the first-to-inventfirst-to-invent rule. rule. I.e. The first inventor who conceives and the I.e. The first inventor who conceives and the
technology or invention to practice. technology or invention to practice.
Other countries, e.g. the EU and Singapore, Other countries, e.g. the EU and Singapore, follows the follows the first-to-filefirst-to-file rule. rule.
I.e. The patent is granted to the first person who I.e. The patent is granted to the first person who files a patent application for an invention, files a patent application for an invention, regardless of who invented the technology. regardless of who invented the technology.
Global Challenges in Global Challenges in Enforcing Enforcing IP RightsIP Rights
Difficult to find the infringer and enforce IP Difficult to find the infringer and enforce IP rights that are violated on the Internet rights that are violated on the Internet
Unclear which country’s courts will have Unclear which country’s courts will have jurisdiction over disputes relating to E-jurisdiction over disputes relating to E-Commerce and IP Commerce and IP
Laws affecting IP vary from country to Laws affecting IP vary from country to country so levels of protection may be country so levels of protection may be different. different.
Trademarks and Domain NamesTrademarks and Domain Names
Due to the Due to the • higher costs of patentinghigher costs of patenting• difficulty in obtaining patents in some difficulty in obtaining patents in some
instancesinstances
Companies ought to maximise their Companies ought to maximise their IP assets by obtaining strong IP assets by obtaining strong protection for their Trademarks and protection for their Trademarks and Domain names. Domain names.
Maximising your IP Assets Maximising your IP Assets
Globalisation is unstoppable – at the Globalisation is unstoppable – at the core nature of ecommercecore nature of ecommerce
IP assets needs to be maximised to IP assets needs to be maximised to overcome differences in global IP overcome differences in global IP regimes regimes
IP must be used as a dynamic IP must be used as a dynamic strategic strategic tool to advance a company’s interests. tool to advance a company’s interests.
Strategic Use of IP OwnershipStrategic Use of IP Ownership
Market entry barrier Market entry barrier
Cost saving Cost saving
Source of income Source of income
Business expansionBusiness expansion
Case Study 1– Preventing others’ IP from Case Study 1– Preventing others’ IP from becoming your becoming your liabilityliability
Macronix InternationalMacronix International (Headquarters: Taiwan)(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 In-house legal/IP team of 15 members, 13 of which
are IP-trainedare IP-trained
• Defended itself against Atmel (one of top 10 Defended itself against Atmel (one of top 10 semiconductor companies) in 5 US litigation cases. semiconductor companies) in 5 US litigation cases. Won all 5 cases Won all 5 cases
Case Study 2 – Turning potential Case Study 2 – Turning potential liabilityliability into mutual into mutual asset 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
Case Study 3 – Profiting from IP 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 IBM decided that it could and should adopt strategies to maximise its own IP assetsstrategies to maximise its own IP assets
• Embarked on an aggressive IP effort to ensure Embarked on an aggressive IP effort to ensure that patents were carefully mined, and all forms that patents were carefully mined, and all forms of IP were exploited through licensingof IP were exploited through licensing
• Close to 6,000% growth in annual licensing Close to 6,000% growth in annual licensing revenue, from US$30mil in 1990 to US$1.8bil revenue, from US$30mil in 1990 to US$1.8bil todaytoday
Conclusion: IP protection – Conclusion: IP protection – Asset Asset or Liability?or Liability?
Globalisation presents new challenges Globalisation presents new challenges in in obtainingobtaining and and enforcingenforcing IP rights IP rights
IP is an IP is an assetasset or or liabilityliability - Depends on - Depends on the extent of your company using IP the extent of your company using IP as a strategic toolas a strategic tool
Proactive approach to IP ownership Proactive approach to IP ownership and use is and use is imperativeimperative for IP to be an for IP to be an assetasset
Thank youThank you
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