How safeguarding intellectual property benefits Singapore’s economy

As global competition intensifies, it is more important than ever for firms to stand out. Intellectual property (IP)—from brands and trademarks to patents and copyrighted work—is an important means by which local enterprises can set themselves apart and go global.

Accordingly, Singapore has been cultivating a robust IP environment. Yet international threats to IP, including counterfeiting and brand restriction, have not abated.

With IP-related industries making valuable contributions to Singapore’s economy, it is important to take these threats seriously.

The economic significance of IP is clear in a recently-released study commissioned by the International Trademark Association which focuses on trademarks, one form of IP that is crucial to firms’ branding efforts.

The Economic Contribution of Trademark-Intensive Industries in Indonesia, Malaysia, the Philippines, Singapore and Thailand by research firm Frontier Economics finds that trademark-intensive industries directly contribute half of Singapore’s GDP, and indirectly contribute to 55 per cent of GDP.

Based on data from 2012 to 2015, such industries account for 60 per cent of Singapore’s exports and 29 per cent of employment.

Major trademark-intensive industries—defined as those which file more trademarks, weighted against total employment in each industry—include manufacturing, wholesale, and retail, and information and communication.

Looking at the broader South-east Asian region, the researchers found that “trademark-intensiveness” increases the value-added per worker by between 57 and 90 per cent in the five countries studied.

Recognising the importance of IP as an asset to businesses and a driver of growth, Singapore has long striven to provide an ideal IP environment.

In the latest annual International Property Rights Index, Singapore ranks fourth in the world and best in the region (Asia and Oceania) for its IP environment. The ranking takes into account protection of IP rights, patent protection, and copyright piracy.

But against a fast-changing innovation landscape, countries and firms cannot afford to be complacent. The Intellectual Property Office of Singapore (IPOS) is carrying out many initiatives to empower firms to make the most of IP.

For instance, IPOS has teamed up with Deloitte Southeast Asia Financial Advisory Services to help 100 firms commercialise their IP and go global.

Under a memorandum of understanding signed in August, IPOS and Deloitte will aid innovative enterprises in the biomedical, healthcare, manufacturing, engineering, and deep tech sectors.

Tapping the value of their IP, these selected innovation-driven firms will be groomed to become future global market leaders.

Other efforts include a professional conversion program and the IP ValueLab, IPOS’ enterprise engagement arm, which help build the IP-related capabilities of local firms.

Yet even as such initiatives strengthen the IP environment, Singapore is not spared from global threats to IP.

One issue is counterfeiting, in which third-party manufacturers exploit a brand’s IP by passing off their products as the real deal.

Both consumers and the genuine manufacturers suffer as a result: the former from having paid for illegitimate and likely inferior products, and the latter from lost sales and a potential erosion in reputation.

Singapore has not been spared by counterfeiters.

As the authority responsible for border enforcement of IP rights, Singapore Customs detains tens of thousands of counterfeit goods each year, including luxury bags, shoes, and other fashion items, toys, perfumes, mobile phones, and accessories.

Furthermore, some counterfeit products manage to make it onto retail shelves here, where they can cause real harm. The Health Sciences Authority has previously issued alerts about “public health and safety concerns” for counterfeit contact lenses, eye drops, and medicines, for instance.

If counterfeiting is prevalent, manufacturers also lose the incentive to come up with new products - resulting in low competitiveness and a stifled spirit of innovation.

Unlike the illegal threat of counterfeiting, another threat to IP appeals to authority.

There has been a notable increase in regulations and legislation to restrict brand use on packaging in recent years—a practice that the World Health Organization (WHO) encourages for tobacco products. WHO advises countries to ban branding on cigarette packaging, thus making them less attractive and discouraging smoking.

Brands allow consumers to differentiate between inferior products and those with a reputation for reliability. If their brands are eroded, companies may end up competing on price instead of quality. Furthermore, plain packaging is easier for counterfeiters to copy and could result in an increase in inferior - and more dangerous - imitations.

Specifically, while the brand name may remain on the packaging in the form of plain block black letters, the overall packaging design will not appear.

As a result, counterfeiters will have an easier time duping consumers into buying products that are not up to standard. In addition, counterfeit products could contain ingredients not permitted in those legally produced since they are not subject to the same quality controls.

Brand restriction also sets an unfortunate precedent, opening the door for IP rights to be weakened in other industries. In Australia, the first country to adopt the policy on cigarette packaging, there have been calls for similar constraints on toys, ‘unhealthy’ food and alcohol.

Strong IP protection is an important pillar of Singapore’s economic policy.

IPOS has worked to implement the toughest IP standards to build Singapore up as an IP hub, attracting foreign businesses, innovators, and investors and nurturing homegrown ones, who will in turn create high-quality jobs and high-value industries.

If Singapore and Singaporean firms are to remain competitive internationally, its IP regime must continue to be strengthened - and must be defended against both illegal threats such as counterfeiting, and potential problems posed by brand restrictions.

ABOUT THE AUTHOR:

Etienne Sanz de Acedo is the chief executive officer of the International Trademark Association (INTA). INTA is the global association of trademark owners and professionals dedicated to supporting trademarks and related intellectual property in order to protect consumers and to promote fair and effective commerce. Headquartered in New York City, INTA also has offices in Brussels, Santiago, Shanghai, Singapore, and Washington, D.C., and has representatives in Geneva and New Delhi.