By CPA Global News ‑ April 2, 2020
According to most commentators and projections, while the coronavirus pandemic had its origins in Asia, the countries of the region have had some successes in mitigating the impact of the virus – both socially and economically. There are potential lessons to be learned from the actions and response of businesses and policy makers on the ground in these countries, including for those in the IP industry.
CPA Global has been speaking with customers and teams working across the region to identify the challenges they have been facing, response strategies and predictions regarding the near term and longer-term impacts of the pandemic – including:
With the novel coronavirus first identified in Wuhan province, China saw the fastest growth of new cases early in the pandemic. However, official figures now suggest that the US has overtaken China in terms of the sheer number of confirmed cases while both Italy and Spain have reported higher numbers of fatalities.
The focus for the IP industry has been on two core phases: Firstly, protecting people and families, ensuring basic business continuity and minimising the impact on business and lives. Secondly, working to accelerate businesses and manufacturing to minimise the long-term impact of the crisis.
To a large extent companies are still innovating and seeking to carry on IP business as normal, and this has been supported by the actions taken by The China National IP Administration – including extending the deadlines for any trademark applicant or registrant affected by the coronavirus outbreak, and reinstatement of patent rights within two months if an applicant missed a deadline because of epidemic control measures.
According to Yifeng Song, Managing Director of CPA Global Asia-Pacific, “China is now further along in terms of the outbreak and is starting to show some signs of economic recovery. Indeed, some of our manufacturing customers, including in Wuhan, have reported that supply chains are getting back to normal and they have been able to deliver for customers even as they diligently work to protect their people.
Asia is underpinned by an extremely strong e-commerce sector - large companies like Alibaba are still operating across the whole region and can deliver goods. That's a key factor in why the virus can be well managed here.”
“It’s difficult to predict the long term impact on IP because it is so heavily reliant on R&D investment” says Song, “but if there is to be an impact it’s likely to be a pivot towards greater quality of IP rather than quantity of filings.”
Hong Kong has been grappling with socio-political unrest before the virus hit. But there is clear consensus that the virus is the greater threat, with the pro-democracy campaigners recognising that mass gatherings would not be conducive to generating support at this time. Hong Kong was arguably well prepared to manage the impact of COVID-19, too, having implemented business continuity plans and solutions previously in respect of the SARS outbreak in 2003.
“The experience of 2003 meant that businesses in Hong Kong, including those in the IP industry, were far more ready to shift to remote working in response to COVID-19 than perhaps those in other jurisdictions” says Emily Wang, CPA Global Head of Regional Sales, Taiwan, Hong Kong & South East Asia. Digitalisation has been a key part of Hong Kong’s response, with cloud-based solutions, advanced technology and IT infrastructure meaning that workforces have more easily transitioned to working from home.
At the same time, though, IP advisers and innovative businesses are being conservative in their approach and are understandably risk averse, particularly considering the underlying political unrest in the region. “There may be a short term reduction in certain IP activity such as searches, as well as an effort to control costs, but this should be tempered to some extent by the fact that, over the longer term, those enterprises who continue to seek to innovate are far more likely to remain competitive” says Wang.
Similarly to China, The Hong Kong Registry extended patent, design and trademark deadlines for any filing date that fell between 29 January and 21 February.
South Korea reported the highest number of COVID-19 cases outside of China until it was overtaken by Italy in early March. Just as Hong Kong had been well prepared following its efforts to tackle SARS, South Korea was able to implement an established system of high-volume virus testing based on its learning from an outbreak of MERS in 2015. These policies enabled the Korean government to move quickly to action preventative measures including using mobile phone alerts to notify individuals of proximity to potential virus carriers.
This has had knock on effects in Intellectual Property too, with KIPO launching a new patent navigation system to provide the most accurate and up to date information regarding patents aimed at tackling COVID-19. KIPO has also granted deadline extension for applicants who failed to comply with time limits or who missed a fee payment due to coronavirus.
To some extent, this preparedness has meant that the IP industry in South Korea has been well positioned to maintain business as usual. “Many large businesses are still working from their offices” says Selim Lee, CPA Global Head of Sales, Korea. “There remains some reticence in Korea towards remote working, with concerns regarding security, particularly cyber security and IT infrastructure. For most, working from home has only really been applied to very distinct groups such as pregnant women and parents with childcare responsibilities. At the same time, though, most large organisations have ceased face to face meetings and in the absence of digital tools this means that there may be delays in businesses processes.”
Despite South Korea showing some signs of coming out of the crisis, there remains the risk of an additional wave of cases, particularly imported cases. The IP industry is therefore rightly being cautious and defensive, with efforts being made to ensure cost controls are in place. “Some businesses see IP as a cost and some see it as an investment and are taking action accordingly”, says Lee. “This depends on scale and customer base. Clearly the overall message is that those companies who are continuing to innovate will be well-positioned post-crisis. Looking ahead, Korea is currently behind the curve when compared to some other countries in the region when it comes to digitalisation and if the situation evolves to the extent that mass home working is required then the cracks in the system may start to show. Digital tools and secure IT infrastructure will be a key part of the IP resilience toolkit.”
Taiwan has taken a zero-tolerance approach to tackling the coronavirus. This has included the roll out of an ‘electronic fence’, a partnership between government and telecommunications companies to monitor people who are supposed to be quarantining via geo-location tracking, and a managed number of new cases.
Emily Wang CPA Global Head of Regional Sales, Taiwan, Hong Kong & South East Asia, says that the IP industry in Taiwan is seeking to carry on with business as normal. “Companies are continuing to file. Taiwanese businesses operate on a calendar year basis so any slowdown which does hit will likely be addressed later in the year as departments seek to hit their targets. But, generally speaking, companies, especially technology companies, understand that innovation really is key to growth and that IP is a critical part of that.”
However, in similar fashion to South Korea, the security provided by the state’s actions to tackle the virus may mask a potential challenge. Concerns around the security of remote working and cultural factors governing the business world mean that Taiwan is arguably not yet fully prepared to move to home working if required.
In addition, says Wang, “there are also concerns around internet bandwidth and the ability of businesses’ IT infrastructure to make mass home working a reality. Taiwanese businesses, including law firms and IP departments, haven’t yet fully embraced cloud-based solutions. They remain very concerned about security and confidentiality and so have large internal IT teams and owned infrastructure and software. The risk is that if sustained, long term isolation is required then businesses and individuals without technological support could end up being cut off from the IP ecosystem.”
At one point Japan had the third highest number of COVID-19 cases and although a real threat still remains, it is much further down the list of confirmed cases Japan has seemingly dealt with the crisis well – with some commentators suggesting that early lessons were learned from the outbreak onboard the Diamond Princess.
“The Japanese culture is one of diligence and respect, with the general population likely to take heed of government advice. Coupled with early action taken by the government, the impact of the COVID 19 virus has been relatively minimal. Japanese companies also have business continuity hardwired into them alongside a psyche of meticulous planning”, says James Lacey, Japan Director, CPA Global.
In similar fashion to Taiwan, the Japanese IP industry remains largely paper-based and reliant on face to face contact. According to Lacey, “IP departments and law firms are moving at a fast pace in terms of proactively addressing issues such as their suppliers' business continuity planning and engaging with global patent offices. Increasingly, there will be a real need to embed internal and external collaboration tools that are not so reliant upon traditional working practices.”
Of course, the fast-moving nature of COVID-19 means that companies shouldn’t be resting on their laurels and the wider cultural impact of the coronavirus pandemic may have given Japanese businesses reason to pause.
“The Japanese mentality is very much of calmness and determination. If a promise is made then you need to deliver on the promise. This mentality perhaps explains the decision to delay postponing the Tokyo Olympics until the last possible moment. Whilst many in Japan would believe strongly, perhaps rightly, that the Games could have been delivered safely in terms of the situation on the ground, the real issue comes from the international nature of the event and the impact on other nations,” says Lacey.
Sporting globalisation is perhaps a useful metaphor when considering the international nature of IP in the context of the coronavirus outbreak. The IP industry is increasingly globalised and Japanese IP departments and law firms are doing business not just in Japan, but around the world. “As Japanese IP departments and law firms become more globalised, they will need to think through how to continue to operate with their international network of filing agents says Lacey. “Those companies who have started to embark upon a digitalisation journey will be well placed to better navigate the global impact caused by COVID-19.”
This point is true of the wider business landscape in APAC. While the medical solution to COVID-19 has been to retrench and isolate, the reality of the global economy is that many Asian businesses have significant customer bases and supply chains overseas.
Any long-term coronavirus-related impact on consumer jurisdictions overseas may still impact the IP strategy of corporates, and their legal advisers, in Asia.
While the COVID-19 outbreak is a fast-moving situation, there are some conclusions that the international IP community can draw from businesses’ experience in APAC.
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