Commentary from the Center for Innovation, Trade, and Strategy
Intellectual Property Challenges in the ASEAN Region
Peter N. Fowler argues that the success of the ASEAN Economic Community depends on the speedy harmonization of IP norms and practices across the region and discusses the need for a mechanism for resolving the inevitable regional disputes.
The Philippines recently assumed the chair of the Association of Southeast Asian Nations (ASEAN) Working Group on Intellectual Property Cooperation (AWGIPC). This development presents an opportunity to take stock of the AWGIPC’s progress toward fulfilling its 2025 commitments to drive economic prosperity in the region through greater intellectual property (IP) creation, innovation, and the attraction of substantial foreign direct investments in research and development.
In March 2021 the Intellectual Property Office of the Philippines director general Rowel S. Barba stated his desire to accelerate the completion of remaining deliverables under the ASEAN IP Rights Action Plan 2016–2025. He envisions doing this by enabling more cooperation activities within the bloc and with ASEAN dialogue partners and “uniting the ASEAN community with the goal of improving the IP system for economic recovery and growth.” Although according to Barba 82% of the Action Plan is either ongoing or completed, the commitments that remain are both sensitive and politically challenging. These include exploring the establishment of unified regional IP systems; creating databases to consolidate genetic resources, traditional knowledge, and copyright information; strengthening the financial basis and management of members’ national IP offices; and developing an information exchange and effective guidelines on enforcement against online infringement.
These are highly technical commitments, and in most cases politically sensitive ones. While completing the outstanding tasks will be a challenge, the goal of regional economic integration will require the AWGIPC to maintain a determined focus and deftly frame the issues at stake. The success of the ASEAN Economic Community (AEC) depends, to a great extent, on the speedy harmonization of IP norms and practices across the region. Yet even as recognition of the need for greater harmonization of IP regimes gains traction, the mechanism for resolution of the inevitable regional disputes remains an unaddressed challenge.
At the end of 2015, ASEAN officially established the AEC to create a single market and production base and become a fully globally integrated economic region. The AEC, with a population nearing 675 million people as of June 2021, is a significant economic bloc. It is currently the world’s third most populous economy and is projected to become the world’s fourth-largest economy by 2030. By that year, the region’s population is expected to reach 723 million people and the combined domestic consumption, which powers roughly 60% of ASEAN’s GDP today, is expected to double to $4 trillion.
According to the official blueprint, the AEC would make ASEAN more dynamic and competitive.3 The document explicitly recognizes IP as one of the necessary factors in building a competitive economic region. In its initial ASEAN Framework Agreement on Intellectual Property Cooperation, the AEC emphasized regional commitments concerning IP protection, administration, and enforcement. The most recently adopted ASEAN IP Rights Action Plan for 2016–2025 recognizes the important role of IP rights in the context of trade and investment flows, as well as the importance of cooperation in IP-related fields in the region. It also commits the organization to explore the establishment of a single IP administration for the AEC.
Momentum for the creation of a more robust ASEAN IP system appears to be gaining. Yet the challenges ahead are substantial and fraught with political sensitivities. Among them are strengthening national IP offices and building IP infrastructure in the region, creating regional IP platforms and infrastructure to enhance the AEC, and establishing regional mechanisms to promote asset creation and commercialization.
CONFRONTING CHALLENGES TO THE HARMONIZATION OF IP LAWS AND SYSTEMS
When discussing ASEAN’s future, the first question to consider is whether increasing regional competition to attract sustainable and higher-value investment will lead to the creation of an innovative and enhanced IP environment in Southeast Asia. As individual AEC members implement policies and initiatives to expand trade, attract investment, open their markets, and promote innovation,4 the potential positive influence on regional IP protection and enforcement efforts cannot be ignored. An impetus to update and enhance IP protection and enforcement procedures, in turn, will gain support among policymakers and the business community. If the World Intellectual Property Organization is right that invention is the bedrock of innovation and that viable invention depends on a robust patent system, then the AEC members will need to devote greater resources and expend political capital in renovating their patent systems to meet the expectations of innovative investors and gain the approval of global innovation arbiters.
An additional question is whether Singapore and other regional IP leaders will serve as models that inspire a race to the top, or whether their success will be discounted as unique and viewed as unrealizable by other ASEAN members. An indication of the AEC’s ability to integrate its members’ IP regimes is whether countries can make progress to harmonize their existing IP laws and procedures. Given the disparity of economic levels, variations of legal systems, and cultural attitudes about the value of IP to national economic development, it is a very hard row to hoe, if not a veritable minefield of obstacles for well-intentioned IP advocates.
Since the early 1990s, efforts at harmonization have been basic and incremental. Even initiatives that would significantly benefit IP applicants in the ASEAN region, without changing substantive legal requirements, have proved hard to achieve. The adoption of a common patent and trademark application form for use by all national offices took years and has yet to be implemented fully by all ASEAN offices.
Practices vary among countries, and the least developed members of the AEC (namely, Cambodia, Laos, and Myanmar) are given leeway in implementing the obligations of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Similarly, the conduct of public consultations and consideration of private-sector input on policy changes, regulatory revisions, operational practices, and examination guidelines differ from country to country. Rules are also an important component of practice. As long as there is no harmonization in IP rules, inventors, entrepreneurs, and creators in the region will face significant challenges and expenses obtaining regional coverage. Unlike their peers in the United States and the European Union, who can get IP protection by filing a single application that covers a large economic region, ASEAN inventors confront different rules and practices. With an unclear mandate at the regional level to harmonize IP rules, or even in some cases to engage in meaningful consultations with the stakeholders who are the customers of the IP systems, the prospects for progress seem dim without sustained and visionary leadership.
Foreign IP offices and stakeholders have encouraged more transparency and public consultation in these areas, but often with mixed results. As greater levels of experience sharing occur between offices, ideally a culture of public consultation, transparency in administrative decision-making, and notice-and-comment rulemaking will become the norm.
RESOLVING INEVITABLE DISPUTES ON IP ISSUES
Even as the prospect for a harmonized IP regime gains ground in the AEC, the efficient resolution of the inevitable disputes over IP remains an unaddressed challenge. Despite informed economic policy decisions, compliance with trade agreements, increased demands by creative and innovative domestic sectors, and the unavoidable push and pull of regional and global competition to attract foreign investment and develop sustainable, digital economies, disputes will inevitably occur. There is, however, no current mechanism to resolve them.
A bedrock principle and limitation governing the WTO dispute-settlement process is that the mechanism can only be used between WTO members. Because this mechanism is not available to IP rightsholders, it has little practical effect in resolving disputes involving private IP in the AEC. While some regional intergovernmental groupings, such as the Andean Tribunal of Justice, Caribbean Court of Justice, East African Community Court, and European Court of Justice, have created supranational or international courts of final appeal to resolve disputes among parties, unlike the EU, the AEC aspires only to economic and financial integration, without a monetary union or political integration. Such a clear limitation on the collective vision for the AEC, and indeed for ASEAN itself, has constrained efforts to date to create common regional organs, such as a supranational court of final appeal to resolve disputes between parties, a common legislative body, or executive leadership. No agreement or treaty exists that subjects any AEC member to the final decision of a supranational appellate judicial body in a case interpreting or enforcing a domestic IP law.
For certain types of disputes in limited commercial sectors, ASEAN members have agreed to allow investors to submit claims against them in regional and international arbitration bodies. Yet commenters have noted that while this “may provide some comfort to foreign investors in ASEAN, the development of regional and consolidated dispute resolution mechanisms—like IPR protection—clashes against ASEAN values such as noninterference and national sovereignty and remains an ongoing goal.”
Currently, disputes over IP infringement, like all commercial disputes, proceed in the courts of the member country where the IP is registered or protected. In a single market economy, IP will cross national borders as goods and services are made available to consumers throughout the AEC, which is the very goal of a regional market. Inevitably, there will be a rise in legal disputes involving IP. No matter what the form of IP, if the final appellate judicial body of one AEC member rules one way and another member’s final appellate judicial body rules differently, there is no institutional mechanism to resolve the conflict. Clearly, rightsholders will want to see their IP treated the same throughout the single market. Without a supranational judicial organ, rightsholders will be left to the uncertainty of individual national judicial bodies in protecting their IP within the AEC. As the economists Narongchai Akrasanee and Jutamas Arunanondchai long ago noted, “While embracing all aspects of the EU institution is politically unfeasible and is unnecessary, a supranational ASEAN Court is the one thing that the ASEAN economic integration process cannot do without.”7 Almost two decades later, their point is still valid.
The AWGIPC is aware that, in addition to better legislation and capacity of the national IP offices, effective enforcement systems play a role in the protection of IP rights. Many of the capacity-building programs conducted in the region are focused on enforcement. The adoption of an ASEAN Initiative on Enforcement and the creation of the ASEAN Network of IP Enforcement Experts can be seen as evidence of the importance placed on strengthening the capacities of members, especially in cross-border enforcement, information sharing, and cooperation on transnational IP criminal activity.
While a fully harmonized and integrated transnational enforcement system for the region may seem a bridge too far, the success of the EU in adding a number of members demonstrates that regional integration is not only possible but also popular and of economic value. Alternatively, lessons might be gleaned from the recent experience of the African Union, which with 54 members faces an even greater challenge to building a common commitment to regional harmonization. As Yeukai Mupangavanhu has noted, African countries have adopted regional integration as a strategy to deal with the challenges of globalization, firmly believing that this will increase their negotiating capacity and competitiveness in global trade, as well as improve access to foreign technology. The African Union is facilitating the establishment of a continental IP body, the Pan-African Intellectual Property Organization, in line with its vision for regional integration.
The AEC is a challenging environment for IP rightsholders, yet this diverse and growing organization is teeming with opportunities. While the IP environment across the ASEAN region ranges from an emerging legal framework in Myanmar to a modern, rule of law–based, and transparent legal system administered by an array of responsive agencies in Singapore, the AEC as a whole is still, unfortunately, lesser than its parts.
To be sure, ASEAN members have bridged their many differences to create a functioning intergovernmental structure and an actual, though still nascent, single market. Yet challenges remain in harmonizing IP regimes and improving the transnational landscape for enforcement. To achieve its stated goals, the AEC may wish to consider the establishment of a regional IP administration—not to replace or supplant the ten national IP offices but to attract greater investment and spur further regional integration. The AEC is becoming a draw for investors and innovators alike, and to realize its full potential as a region of IP exporters, not just IP consumers, a unified regime for the protection and enforcement of IP should be one of the highest priorities.
Peter N. Fowler is a Senior Counsel in the Office of Policy and International Affairs at the United States Patent and Trademark Office (USPTO) in the U.S. Department of Commerce. Having covered the region since 1995, he served as the USPTO regional intellectual property attaché for Southeast Asia, posted at the U.S. embassy in Bangkok, from 2011 to 2017 and as an adviser to the Office of the U.S. Trade Representative on trade agreement negotiations in the region, including those with Malaysia, Singapore, Thailand, and Vietnam and the Trans-Pacific Partnership. He is co-author of “ASEAN and Intellectual Property: Will a Complicated History Lead to a Certain Future?” (2017).
The views expressed are solely those of the author and do not represent the official position of the USPTO, the Department of Commerce, or the U.S. government.
 “PH Assumes Chairmanship of ASEAN Intellectual Property Cooperation Group,” Intellectual Property Office of the Philippines, March 25, 2021, https://www.ipophil.gov.ph/news/ph-assumes-chairmanship-of-asean-intellectual-property-cooperation-group.
 For example, Singapore has adopted a master plan to be a global IP hub for Asia, the Philippines has taken the lead as a champion on IP-enforcement initiatives, and other member countries have embraced IP as a major component of their economic competitiveness by issuing a national IP roadmap (Thailand) or national IP strategy (Vietnam).
 See, for example, U.S. Chamber of Commerce, “International IP Index 2021: Recovery through Ingenuity,” 2021, https://www.theglobalipcenter.com/wp-content/uploads/2021/03/GIPC_IPIndex2021_FullReport_v3.pdf; and Global Innovation Index, https://www.globalinnovationindex.org/Home.
 “The ASEAN Economic Community: Investment Opportunities and Challenges in the World’s Newest Market,” Jones Day, February 2016, http://www.jonesday.com/files/Publication/ca71c5ab-9c8d-4384-a8a9-a123fbb83943/Presentation/PublicationAttachment/e78899ed-dd35-4cf1-9f01-af35c0b78348/ASEAN%20Economic%20Community%20Commentary%20A4.pdf.
 Narongchai Akrasanee and Jutamas Arunanonchai, “Institutional Reforms to Achieve ASEAN Market Integration,” in The 2nd ASEAN Reader, ed. Sharon Siddique and Sree Kumar (Singapore: ISEAS Publishing, 2003), 509–10.
 Y. Mupangavanhu, “African Union Rising to the Need for Continental IP Protection? The Establishment of the Pan-African Intellectual Property Organization,” Journal of African Law 59, no 1 (2015): 1–24.