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The strength and enforceability of IP Laws in the ASEAN Community

Recently, The Economist Intelligence Unit (EIU) published a new survey report aptly called “The Investment Climate of South-East Asia” pursuant to a survey conducted amongst 234 senior corporate executives contemplating investments in several countries in the South East Asia region. The Economist conducted the survey under sponsorship from the United States Chamber of Commerce in March 2007 resulting in the report being published for various international commercial and business communities.

The survey results published under the report were disseminated extensively to several international business and commercial enterprises. The report indicated serious business concerns over South East Asian jurisdictional and governmental policies on Intellectual Property rights and foreign investor protection domestically. It also heightened several crucial factors that indicated significant changes to the survey respondents’ prospective business view of investing in South-East Asia. The primary concern of the senior business executives surveyed highlighted the fundamental need for strong Intellectual Property laws and policies as well as enforcement initiatives to protect the rights of multinational investors in the emerging markets of South-East Asia specifically in countries like Malaysia, Philippines, Thailand, Indonesia and Vietnam.

The survey reflected that North American, European and/or Asia Pacific businesses and companies are sensitive and observant of the economic decisions and policies of South-East Asian governments prior to investing in the region. Throughout the survey, North American respondents exceeded the global average at voicing serious concerns about various events such as the natural disasters experienced in Indonesia, the military coup in Thailand, and the new economic policies announced by governments as important factors in influencing their strategic business decisions for investments in South East Asian countries.

Countries that were rated by the respondents as having strong IP laws, as well as enforcement policies, namely Singapore and Malaysia, were identified as top investment priorities of multinationals. However, investment prospects in some key economies in South-east Asia namely Thailand, Indonesia and Vietnam ranked considerably low in investment preference out of the prominent South-East Asian countries listed. The primary reason for the low preference was identified due to uncertain IP protection issues in the respective Asian countries.

Singapore was rated first in the South East Asian region for its strong IP laws and vigorous enforcement of these laws, gathering support of the respondents’ strong confidence in Singapore. Singapore was also most frequently named as the number-one investment destination of multinationals, having been chosen by 53% of all respondent companies as being among their top three locales for international investments and business opportunities.

Malaysia was ranked second by respondents for its IP laws and enforcement. Additionally, the nation came second with 35% of respondents agreeing in respect of Malaysia being their favorable destination of multinational investment.

With regard to the business executives’ perception of investment potentiality for multinational corporations in Vietnam and Indonesia, Vietnam was one-step above Indonesia in the survey results with a 32% respondent feedback despite being ranked as a country with the least enforcement of its IP Laws.

Indonesia received an encouraging 30% support from the business executives for its potentiality in multinational investments for corporations, as it continues to develop its IP laws and enforcement strategies, what with the recent cases of IP protection gaining limelight in the world forums.

Surprisingly, countries like Thailand and the Philippines that have recently portrayed positive development in the protection and enforcement of IP, ranked rather low as Asia’s least preferred investment destinations for international corporations. Thailand was ranked fifth with 28% of responses from the executives whilst the Philippines ranked sixth with only 15% of the responses.

As the above survey results serve as a guide to improve efforts and initiatives for strengthening national IP laws in the South East Asian region, it has to be said that Thailand does indeed have the greatest task of all. This is because the United States intended to place Thailand on its special IP Watch List for being the Asian country that has yet to ease the persistent and continuing IP piracy issues in the essential five commercial industries including music and movies, clothes, pharmaceuticals, cable television and books. Should such placement in the US IP Watch List be implemented, there is the risk that Thailand’s various export products to the US will be affected commercially due to piracy concerns.

As for Vietnam and its growing investment market, the European Union and the United States have stepped up to assist the nation in combating piracy, by eradicating imitation goods with assistance from local customs officers, economic policemen and market managers. One of the first initiatives taken in combating piracy was a recent training workshop held by the EC-ASEAN Intellectual Property Rights Co-operation Programme, the US Patent and Trademark Office (USPTO) and the General Department of Customs of Vietnam. Support and participation on piracy issues in discussions at the workshop came from right holders of well-renowned trademarks in Vietnam, including L’Oreal, Nokia, Givenchy, Kenzo, Cisco Systems, Tag Heuer, Nike, Guerlain, Gedeon Richter, Scotch Whisky Association, Christian Dior, Ambro and Unilever and others. The five-day event seminar was to educate Vietnamese authoritative officials concerned on the ill-menaces of counterfeiting and piracy, with the primary aim of providing them with comprehensive training on adequate and sophisticated counter measures and knowledge on methods for enforcement of IP rights and the ongoing fight against fake and imitation goods.

Furthermore, under a tripartite co-operation program, right holders of trademarks of Vietnamese origin will be assisted in protecting IP rights. The European Union also plans to organize around 30 activities in Vietnam this year to boost co-operation in combating fake and imitation commodities. All of these programs strongly indicate that Vietnam is addressing international business concerns over IP rights protection in view of future investments.

All in all, these developments can be viewed as a positive step in the light of the Asia Intellectual Property Right Action Plan 2004-2010 initiated by its member countries who have since recognized that IP and IP rights creation, commercialization and protection have assumed an increasingly and unprecedented influence on business, social, economic and technological communities of nations across the world. As the overall positive developments and programs to further boost IP awareness and protection in the region take place, this initiative will definitely transform ASEAN collectively into an innovative and competitive region in trade.