That.® Response to Prof Jamus Lim on IP Protection Justifications
Is Intellectual Property (“IP”) protection designed to incentivise innovation or is it a legal tool designed to reward people for their creations and/or create a foothold in the market? As IP laws in Singapore undergo a myriad of changes, Member of Parliament Associate Professor Jamus Lim gave some of his thoughts in Parliament regarding the amendments. More specifically, his concerns relate to how the allowance of partial acceptance of trade mark applications may affect the spurring of innovative activity in light of other IP rights such as copyright and patents. Our Directors, Mr Jonathan Foong (Profile) and Mr Mark Teng (Profile), share some of their trade mark prosecution experience and expert insights.
Introduction
On 12 January 2022, Parliament approved a plethora of changes to IP laws in Singapore in its quest to become a leading IP hub. One change commented upon by Associate Professor Jamus Lim (“Prof Jamus”) is the allowance of partial acceptance of national trade mark applications.
Under current trade mark laws, an applicant that has sought his brand name or logo to be registered across multiple classes of goods and services may see his entire application being refused even if the Intellectual Property Office of Singapore (the “IPOS”) objects to only one of the multiple classes, pursuant to the current Section 12(4) of the Trade Marks Act:
(4) If the applicant responds within the period referred to in subsection (3) but fails to satisfy the Registrar that those requirements are met, or to amend the application or provide the additional information or evidence so as to meet them, the Registrar may refuse to accept the application.
In a recent case, our client applied for one trade mark in three classes (see explanation on classes here) because they used the same brand across at least three products and/or services. Such an application is issued one trade mark number for administrative efficiency. Substantively, this does not affect an applicant’s trade mark rights. Note that in some countries, multiclass applications are not permitted. In such country, the same client would have to file three separate trade mark applications to achieve the same level of trade mark protection.
In our case, the IPOS raised objections in respect of one of the classes, but did not have any objections to the other two. Under the current IPOS practice, our client would have to pay $280 in official fees to the IPOS to file Form TM8 to “Request to divide an application for registration” to divide up the application to allow the non-objected to classes to proceed to registration.
We therefore advised our clients and assisted them to divide the application in two , one in respect of the one class where the IPOS maintained an objection, and the other in respect of the two classes where the IPOS had raised no objection. In this way, our client was able to obtain trade mark protection over the two classes first, while we continue to advocate for our client’s trade mark rights on the one class objected to.
The allowance of partial acceptance under the new amendments simply means that applicants can save some administrative time and costs so that the unobjected parts of their trade mark application can proceed to publication and registration.
Section 12 is now being amended to include, inter alia:
(4)(b) … the Registrar may accept the application in relation to those goods and services for which registration is sought and the requirements for registration have been met.
The amendments do not go so far as to say that in the future, applicants would no longer need to pay fees to divide an application. It remains to be seen how IPOS will implement this policy at an administrative level. In other words, the change of allowing partial acceptance of trade marks may just be a small administrative issue that may save applicants of Singaporean trade marks some money, and to make it easier to secure trade mark rights that are not objected to by IPOS. It is neither a substantial change, nor any indication from the government that trade marks are more important than copyrights, patents or any other IP rights. In the words of Minster Edwin Tong, this amendment will improve business-friendliness, operational efficiency and legislative and procedural clarity.
Prof Jamus Lim’s Response to the Amendments
In response to these changes, Prof Jamus, drew a distinction between the protection afforded to trade marks vis-à-vis other classes of IP such as patents and copyright. He notes that there are inherent trade-offs between granting IP protection and stifling innovative activity.
The issue raised by Prof Jamus relates to the fundamental rationale of trade mark law and the inevitable intersection of law and economics. Specifically, Prof Jamus’ concerns lie with the fact that trade marks do not generally promote competitive innovative activity unlike copyrights or patents, nor do they enrich the public domain. Instead, he sees the function of trade mark protection as market-oriented by granting trade mark owners a right to preclude others from the use of a particular established brand’s mark. It is in this light that Prof Jamus raised his concern with partial acceptance of national trade mark applications and the possibility of excessive and frivolous trade mark applications stifling new entrants into the market –Respectfully, we cannot agree.
To answer Prof Jamus’ question, one would first need to appreciate the justifications of IP law, namely, whether IP protection is designed specifically to incentivise innovation or as a legal tool to reward people for their creations and/or create a foothold in the market? Perhaps the more reasonable answer is, both.
Justifications for IP Protection
Prof Jamus notes that IP protection must be balanced with the promotion of innovative activity. However, promoting innovative activity is not the be all end all but just one of the many reasons why IP protection should be accorded. IP is multifaceted and consists of various types of rights – each with similar policy considerations but at varying degrees. Amongst other policy reasons, and even without the aid of Competition Law, IP laws serve to promote fair competition as well. This, in turn, spurs more efficient allocation of resources, greater innovation and responsiveness to consumer needs.
Justifications for Copyright and Patent Protection
Prof Jamus is not incorrect to suggest that copyright and patent protection exist primarily to spur innovative activity. Copyright protection for software codes, creative databases, literature, musical and artistic works are allowed so that their creators can reap the returns of their creative efforts for a limited, but actually rather long, period – the life of the author plus 70 years thereafter.
The statutory monopolies conferred upon the creators of copyrights or the inventors of patentable inventions (20 years) provide them with an “incentive” to create more works. The ultimate beneficiary of copyright and patent protection for certain individuals is society-at-large because creative works promote the enjoyment of life and inventions help us progress as a society.
However, once the duration of protection expires, the invention is free to be used by others to build upon. For example, one would note that the price of Panadol (the brand) is higher than generic paracetamol. While Panadol can no longer stop others from manufacturing paracetamol-based medicines, the difference in the price is due to the brand value behind Panadol’s trade mark registration.
Justifications for Trade Mark Protection
On the other hand, trade mark protection is not time-barred and is perpetual (subject to the owner of the trade mark renewing the registration every 10 years). While trade mark protection can offer an incentive to innovate, it is not the main justification, unlike copyrights or patents. To use spurring innovative activity as the benchmark across all IP rights would be akin to comparing apples with oranges.
The learned Professor Ng-Loy Wee Loon S.C. argues that from an economic and utilitarian perspective, trade marks function as a badge of origin and/or quality. It is the cornerstone of every business which allows them to distinguish their brand from another.
From a consumer’s perspective, trade mark protection is justified as it serves as a useful tool for consumers to locate goods or services of a particular quality from a particular trade source. As such, this saves search time and costs, which in turn, results in a better allocation of resources which “enrich the public domain”. In light of the upcoming festivities, have you ever thought about why you are drawn to brands such as New Moon or Bee Cheng Hiang? Purchasing decisions are made using brands as identifiers of quality and origin. To dilute trade mark rights would be akin to diluting consumers’ ability to quickly isolate the product or service that they intend to obtain, thereby reducing allocative efficiency (to use some economic terms).
From a business perspective, significant time, effort and money are spent on creating and developing the trade mark as a badge of origin or quality for goods or services. Offering strong trade mark protection not only serves as an important incentive for the incumbent business to make these investments but also guards it against unfair competition from other businesses who attempt to steal the incumbent business’ customers by using an identical or confusingly similar trade mark. When viewed in this light, we can see how offering trade mark protection implicitly promotes competitive and innovative activity as well.
Whilst “excessive and frivolous trade mark applications” are indeed a possible cause for concern, the Trade Marks Act has various safeguards to militate against such behaviours. For instance, payment of a fee for each additional class registered for a sign or logo; revocation of marks on the register that have not been in use for a continuous period of 5 years or the ability for affected persons to invalidate trade mark applications made in bad faith. Insofar as partial applications are more business-friendly, it is unlikely that it would come at the expense of “excessive and frivolous trade mark applications” being made.
Conclusion
Spurring innovative activity and commercialising IP are not mutually exclusive goals as one simply cannot do without the other. People will not be incentivised to innovate and create new inventions or works if they are unable to receive some form of remuneration for their time, effort and money spent on doing so. Likewise, one would not be able to commercialise their trade mark if the product or brand that they sell it under is not innovative or is unable to distinguish itself from existing brands in the market. To that end, it would be oversimplistic to transplant the policy reasons for copyrights into trade marks insofar as they both fall under the category of IP. This is because the two are fundamentally seeking to protect different aspects of intangible assets – one, a product or name; and the other, the expression of an idea. Therefore, while Prof Jamus makes a compelling argument with regards to spurring innovative activity, it must be viewed in light of the justifications for trade mark protection.
If you require any help regarding the protection of your intangible assets, or simply want to know more about IP, do feel free to drop us an email at ask@that.legal and #LetsTalkAboutYourChallenge #THATistheway.
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