Intellectual property rights remain an unresolved issue

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Counterfeit brand products are openly sold on street markets throughout Southeast Asia

By Arno Maierbrugger and Sheree McDonald

Intellectual property (IP) rights could be a key asset for Southeast Asia to protect its reputation as a promising place to do business. However, while the reputation of being an economic powerhouse of the world has been widely acknowledged by the global business community, most of the region’s countries’ efforts to combat counterfeit activities and to enforce IP laws has not.

Despite legislation being into effect and international conventions on IP rights having been signed by most of the tiger states, the region remains a busy place for counterfeit product trade, hard- and software piracy and falsified goods of all kind, with only a few exceptions such as Singapore. While Thailand and Malaysia are making progress in implementing IP laws, Cambodia, Indonesia or Vietnam are heavily struggling to rein in the copycat trade, and Myanmar even has to start from scratch.

In Thailand, a major issue with regard to IP rights is soft- and hardware piracy. Examples for such issues are refurbished computers with built-in second hand hard drives selling as new for extremely low prices, sometimes loaded with illegal movie or song downloads. While the country’s Department of Intellectual Property (DIP) and the Technological Crime Suppression Division (TCSD) is working on the issue, there is still difficulty enforcing prohibitions of piracy. DIP has little authority and TCSD has few resources available to curb product piracy. The focus now is to stop delays on the passage of amendments to the Copyright Act, which is supposed to largely impact the availability and facilitation of piracy by, for example, creating a ban on camcorders in cinemas as well as imposing a landlord liability.

However, there are counterfeit products being sold all over the country. For example, while Swedish youth fashion brand H&M only recently announced it will venture into Thailand and open its first store by the end of 2012, clothes with fake H&M labels have been readily available on street markets and even in department stores for years, reportedly originating from Cambodia. The same applies to other well-known consumer brands. For fake electronics goods, mobile phones and computer parts there even exists an entire shopping mall in the center of Bangkok, MBK Mall, where everything from fake Vertu luxury mobile phones to pirated HP printer cartridges and copycat iPad, iPods and iPhones can be bought for a fraction of the original price.

The Philippines are trying to hit intellectual property rights issues head on, but in a different way. The focus lately has been on the implementation of a new IP rights legislation in order to protect the results obtained in laboratories that are funded by the government. The Philippine Technology Transfer Act of 2009 actually was released in May 2012. The result is that research and development institutions that are running tests in their laboratories are now granted intellectual ownership of the results, provided the research has been funded by the government. This is to protect the potential exploitation of the efforts made by individual scientists.

However, the country is well known for its rampant software piracy which is among the highest in Southeast Asia. Even though the Pilipinas Anti-Piracy Team (PAPT) is doing its best to raid shopping malls, computer resellers and offices regularly for pirated software, seven out of ten software installations in the country are unlicensed, according to the 2011 Global Software Piracy Study by the anti-software piracy organisation Business Software Alliance. The commercial value of unlicensed software in the Philippines rose by 20 per cent to $338 million in 2011. The Philippine Commission on Information and Communications Technology (CICT) found out that pirated software is even widely used in government offices, where illegal software copies are installed instead of spending millions of dollars for licensed software.

Compared with the Philippines’ software piracy rate of 70 per cent, Thailand’s stands at 72 per cent, Indonesia’s at 86 per cent, Vietnam’s at 81 per cent, Brunei’s at 67 per cent, Malaysia’s at 55 per cent and Singapore’s at 33 per cent.

Myanmar is a country that will have to start from zero with IP rights. As of now, the recently opened economy is seen as particularly risky in terms of IP rights for many foreign investors as legal protection of brands, trademarks and patents is virtually non-existing. The software piracy rate is estimated at 91 per cent.

Wee Choo Hua, Asia-Pacific director of software policy, legal and corporate affairs at Microsoft, recently said that since there are no intellectual property laws and no trademark registry in Myanmar, the company is hesitant to venture into the country despite its favourable economic outlook. Currently, the sole responsibility of protecting intellectual property has to be shouldered by individual companies, which hampers the influx of technology investment. According to the Singapore Business Federation, who visited Myanmar in May for a field study, the faster action Myanmar will take on implementing IP rights, the more technology investment can be expected.

At present, not only soft- and hardware piracy is a problem in Myanmar. Many other items, from fashion products to watches and, particularly, pharmaceuticals, are widely faked in the country without any intervention from the authorities. Myanmar’s semi-autonomous north-eastern region, especially Mong La, is known to produce the highest volume of pirated CDs and DVDs for the entire Chinese and Southeast Asian market, according to the United Nations Office on Drug and Crime (UNDOC).

Though sold everywhere, the main volume outlets for counterfeit CDs, DVDs, watches, bags, clothes and fake medicines in Southeast Asia are Mong La and Tachilek in Myanmar and Phnom Penh in Cambodia. Relatively stricter law enforcement in Thailand has made it less of a direct destination for such goods.

According to the Myanmar Times, there will be at least a consumer protection law coming into effect soon. However, many consumers knowingly buy fake electronics.

“Sometimes we’re not in a position to buy a genuine product and therefore buy a cheaper item, even though we know it’s fake,” Ko Ko, a 21-year-old technology student, told the paper, adding that genuine products often cost ten times the price of a fake.

Vietnam also has a serious problem with counterfeit goods. According to recent surveys by the Vietnamese High Quality Goods Enterprise Association, more than 60 per cent of products purchased in local markets are fake, which means that six out of ten market shoppers knowingly or mistakenly go home with fake or copycat products, the survey found.

Bogus producers in Vietnam have faked almost every kind of products available at the markets, from clothing, footwear and bags to cosmetics, shampoo and perfume, as long as they are well-consumed products. Most of the fake product makers are small, unlicensed manufacturing facilities.

On the other hand, the problem with pirated computer software in Vietnam is slightly improving. The country’s piracy rate has fallen to 81 per cent in 2011 from 88 per cent in 2006, the Business Software Alliance said in its 2011 report. The improvement is said to be attributable to the country’s joining of the World Trade Organisation in 2007.

In terms of intellectual property protection, Vietnam is a signatory to most of the international conventions governing IP rights. The National Office of Intellectual Property of Vietnam is the body where companies can protect their trademarks, patents, industrial designs and else. However, how the law is enforced is another story.

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Reading Time: 5 minutes

Counterfeit brand products are openly sold on street markets throughout Southeast Asia

By Arno Maierbrugger and Sheree McDonald

Reading Time: 5 minutes

Counterfeit brand products are openly sold on street markets throughout Southeast Asia

By Arno Maierbrugger and Sheree McDonald

Intellectual property (IP) rights could be a key asset for Southeast Asia to protect its reputation as a promising place to do business. However, while the reputation of being an economic powerhouse of the world has been widely acknowledged by the global business community, most of the region’s countries’ efforts to combat counterfeit activities and to enforce IP laws has not.

Despite legislation being into effect and international conventions on IP rights having been signed by most of the tiger states, the region remains a busy place for counterfeit product trade, hard- and software piracy and falsified goods of all kind, with only a few exceptions such as Singapore. While Thailand and Malaysia are making progress in implementing IP laws, Cambodia, Indonesia or Vietnam are heavily struggling to rein in the copycat trade, and Myanmar even has to start from scratch.

In Thailand, a major issue with regard to IP rights is soft- and hardware piracy. Examples for such issues are refurbished computers with built-in second hand hard drives selling as new for extremely low prices, sometimes loaded with illegal movie or song downloads. While the country’s Department of Intellectual Property (DIP) and the Technological Crime Suppression Division (TCSD) is working on the issue, there is still difficulty enforcing prohibitions of piracy. DIP has little authority and TCSD has few resources available to curb product piracy. The focus now is to stop delays on the passage of amendments to the Copyright Act, which is supposed to largely impact the availability and facilitation of piracy by, for example, creating a ban on camcorders in cinemas as well as imposing a landlord liability.

However, there are counterfeit products being sold all over the country. For example, while Swedish youth fashion brand H&M only recently announced it will venture into Thailand and open its first store by the end of 2012, clothes with fake H&M labels have been readily available on street markets and even in department stores for years, reportedly originating from Cambodia. The same applies to other well-known consumer brands. For fake electronics goods, mobile phones and computer parts there even exists an entire shopping mall in the center of Bangkok, MBK Mall, where everything from fake Vertu luxury mobile phones to pirated HP printer cartridges and copycat iPad, iPods and iPhones can be bought for a fraction of the original price.

The Philippines are trying to hit intellectual property rights issues head on, but in a different way. The focus lately has been on the implementation of a new IP rights legislation in order to protect the results obtained in laboratories that are funded by the government. The Philippine Technology Transfer Act of 2009 actually was released in May 2012. The result is that research and development institutions that are running tests in their laboratories are now granted intellectual ownership of the results, provided the research has been funded by the government. This is to protect the potential exploitation of the efforts made by individual scientists.

However, the country is well known for its rampant software piracy which is among the highest in Southeast Asia. Even though the Pilipinas Anti-Piracy Team (PAPT) is doing its best to raid shopping malls, computer resellers and offices regularly for pirated software, seven out of ten software installations in the country are unlicensed, according to the 2011 Global Software Piracy Study by the anti-software piracy organisation Business Software Alliance. The commercial value of unlicensed software in the Philippines rose by 20 per cent to $338 million in 2011. The Philippine Commission on Information and Communications Technology (CICT) found out that pirated software is even widely used in government offices, where illegal software copies are installed instead of spending millions of dollars for licensed software.

Compared with the Philippines’ software piracy rate of 70 per cent, Thailand’s stands at 72 per cent, Indonesia’s at 86 per cent, Vietnam’s at 81 per cent, Brunei’s at 67 per cent, Malaysia’s at 55 per cent and Singapore’s at 33 per cent.

Myanmar is a country that will have to start from zero with IP rights. As of now, the recently opened economy is seen as particularly risky in terms of IP rights for many foreign investors as legal protection of brands, trademarks and patents is virtually non-existing. The software piracy rate is estimated at 91 per cent.

Wee Choo Hua, Asia-Pacific director of software policy, legal and corporate affairs at Microsoft, recently said that since there are no intellectual property laws and no trademark registry in Myanmar, the company is hesitant to venture into the country despite its favourable economic outlook. Currently, the sole responsibility of protecting intellectual property has to be shouldered by individual companies, which hampers the influx of technology investment. According to the Singapore Business Federation, who visited Myanmar in May for a field study, the faster action Myanmar will take on implementing IP rights, the more technology investment can be expected.

At present, not only soft- and hardware piracy is a problem in Myanmar. Many other items, from fashion products to watches and, particularly, pharmaceuticals, are widely faked in the country without any intervention from the authorities. Myanmar’s semi-autonomous north-eastern region, especially Mong La, is known to produce the highest volume of pirated CDs and DVDs for the entire Chinese and Southeast Asian market, according to the United Nations Office on Drug and Crime (UNDOC).

Though sold everywhere, the main volume outlets for counterfeit CDs, DVDs, watches, bags, clothes and fake medicines in Southeast Asia are Mong La and Tachilek in Myanmar and Phnom Penh in Cambodia. Relatively stricter law enforcement in Thailand has made it less of a direct destination for such goods.

According to the Myanmar Times, there will be at least a consumer protection law coming into effect soon. However, many consumers knowingly buy fake electronics.

“Sometimes we’re not in a position to buy a genuine product and therefore buy a cheaper item, even though we know it’s fake,” Ko Ko, a 21-year-old technology student, told the paper, adding that genuine products often cost ten times the price of a fake.

Vietnam also has a serious problem with counterfeit goods. According to recent surveys by the Vietnamese High Quality Goods Enterprise Association, more than 60 per cent of products purchased in local markets are fake, which means that six out of ten market shoppers knowingly or mistakenly go home with fake or copycat products, the survey found.

Bogus producers in Vietnam have faked almost every kind of products available at the markets, from clothing, footwear and bags to cosmetics, shampoo and perfume, as long as they are well-consumed products. Most of the fake product makers are small, unlicensed manufacturing facilities.

On the other hand, the problem with pirated computer software in Vietnam is slightly improving. The country’s piracy rate has fallen to 81 per cent in 2011 from 88 per cent in 2006, the Business Software Alliance said in its 2011 report. The improvement is said to be attributable to the country’s joining of the World Trade Organisation in 2007.

In terms of intellectual property protection, Vietnam is a signatory to most of the international conventions governing IP rights. The National Office of Intellectual Property of Vietnam is the body where companies can protect their trademarks, patents, industrial designs and else. However, how the law is enforced is another story.

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