What’s going on in Singapore?

Singapore has been very clear about its intention to become a global intellectual property hub for several years now, having unveiled a 10-year master plan to develop its IP initiatives at the start of the decade.

Since 2013, a number of programs have been implemented aimed at strengthening intellectual property protection rights for companies operating in Singapore, encouraging businesses to set up there, and send the country flying up the IP Index rankings.

Some of these initiatives have included:

  • A SGD100m financing scheme, launched in 2014, allowing businesses to use intellectual property as collateral when applying for bank loans.

  • The Intellectual Property Office of Singapore’s (IPOS) SGD1bn Makara Innovation Fund, granted on the basis of strong intellectual property.

  • A partnership with Deloitte to help firms commercialise their IP rights.

Singapore’s Supreme Court also has a dedicated IP Court to deal with increasingly complicated intellectual property cases, a symptom of IP’s growing presence.

More recently, Singapore signed an MoU with the Internet Initiatives Development Fund (IIDF), a Russian venture capital fund and accelerator. This latest move will give Russian firms greater access to Singapore’s robust IP protection, creating more branding and commercialisation opportunities for smaller firms and startups in particular, as well as access to consultancy services, patent search and analytics, training programmes and workshops.

We spoke to Sheena Jacob, partner at JurisAsia LLC, and Daren Tang, chief executive of the Intellectual Property Office of Singapore, to find out more about Singapore’s ever-growing IP protections and what this means for businesses worldwide.

“Singapore’s Supreme Court also has a dedicated IP Court to deal with increasingly complicated intellectual property cases, a symptom of IP’s growing presence.”

Sheena R Jacobs
Managing Partner at JurisAsia LLC

“Innovation and the creation of intellectual assets must underpin future growth and this necessarily means that IP is key to this economic growth strategy.”

Why is Singapore prioritising IP?

Trademark-intensive industries like manufacturing, wholesale, and retail, and information and communication depend on IP rights to brand themselves. Singapore relies on these industries for 60% of its exports. In 2017, the International Trademark Association published a study by Frontier Economics which found that trademark-intensive industries are directly responsible for half of Singapore’s GDP.

“Globally, investment in intangibles have outpaced investment in tangible assets,” explains Tang. “Today, more than half of the global economy—or close to USD60T — is in intangible assets. The world’s most valuable companies are now intangible asset-rich enterprises such as Amazon, Microsoft, Apple, Tencent and Alibaba. And IP {…} is the primary way these companies protect their intangible assets.”

Jacob elaborates that Singapore’s project of becoming a global IP hub is more than simply a response to changing trends in the global economy: it is a total overhaul of its own previous economic model and a critical element of its future development.

“The shift to a knowledge-based economy arose from the recognition that Singapore can no longer rely on cheap labour and manufacturing to drive the economy,” she says. “Innovation and the creation of intellectual assets must underpin future growth and this necessarily means that IP is key to this economic growth strategy.”

“Being a politically neutral country with a strong legal framework and IP system, Singapore hopes to attract businesses from outside the country to hold their IP assets in Singapore in order to take advantage of the favourable tax and legal infrastructure,” she continues.

Study after study has revealed the benefits of having robust IP protections, from higher levels of foreign direct investment to a greater percentage of the workforce entering high-paying industries. According to the International Property Rights Index, income per capita is thirteen times larger in countries with the strongest IP protections than in the lowest-ranking economies.

How is progress so far?

Jacob describes the results of Singapore’s 10-year master plan so far as “mixed”. Although impressive, Singapore’s IP protection initiatives don’t differ greatly from those being implemented in other global IP hubs, such as New Zealand, Norway and Finland.

“The IP Master Plan has had mixed results given that the IP market is a highly competitive global one,” she observes.

However, Singapore is holding strong among this close competition. In the World Economic Forum’s Global Competitiveness Report 2018, it ranked third in the world and first in Asia for IP protection. It also ranked fifth on the International Property Rights Index and ninth in the United States Chamber of Commerce intellectual property (IP) index. The margins separating the top-ranking countries are typically small, with all of the International Property Rights Index’s top ten countries scoring between 8 and 9 out of 10.

It’s also important to note Singapore’s role in strengthening the regional IP market. What’s good for Singapore is good for Asia, as Tang highlighted. He pointed to how Singapore is driving regional IP growth and helping Asia steadily establish itself as having some of the most advanced IP protections worldwide.

“Asia, including both Singapore and Hong Kong, is at the centre of innovation and intangible asset growth,” he noted. “Asia has outperformed in the Global Innovation Index (GII) rankings over the past few years. In 2018, five of the top 20 most innovative economies were Asian. Growth in Asian IP applications also doubled that of average global growth.”

The strength of Singapore’s IP protection is visible not just in its global rankings, but in the number of companies choosing to conduct business out of this newly-established hub. Global consumer goods corporation Procter and Gamble cited the high levels of IP protection as one of the motivating factors behind its decision to move parts of the business—including its beauty unit and digital innovation centre—from its headquarters in the United States to Singapore.

The World Intellectual Property Organisation (WIPO) have also established an Arbitration and Mediation centre in the country—its only centre outside of Geneva.

Daren Tang
Chief Executive of the Intellectual Property Office of Singapore

“The world’s most valuable companies are now intangible asset-rich enterprises such as Amazon, Microsoft, Apple, Tencent and Alibaba. And IP {…} is the primary way these companies protect their intangible assets.”

“In the World Economic Forum’s Global Competitiveness Report 2018, it ranked third in the world and first in Asia for IP protection. It also ranked fifth on the International Property Rights Index and ninth in the United States Chamber of Commerce intellectual property (IP) index.”

Are there any threats?

Of course, Singapore isn’t immune to the threats plaguing the IP rights of businesses worldwide. For instance, the global pushback against branding for products deemed ‘risky’ or ‘unhealthy’, such as tobacco, fatty foods and alcohol amounts to a weakening of IP rights for trademark-intensive industries. Australia is one of the most prominent examples, where plain packaging has been introduced for tobacco and is proposed for fatty foods, alcohol and sugary drinks.

Counterfeit products also cost businesses billions every year, with Singapore Customs annually detaining tens of thousands of counterfeit goods.

However, Jacob insists that counterfeiting “is less of a problem in Singapore”, pointing instead to high rates of illegal streaming as a more prevalent issue. In November, the country’s Coalition Against Piracy revealed that 15% of Singaporeans were using TV boxes to view pirated content.

The good news is that these threats to IP protection are not limited to Singapore and are instead a part of a much wider “global phenomenon”, Jacob says.

What’s the outlook?

On the whole, Singapore appears to be bucking the global trend for brand restriction by strengthening its IP protection, attracting more and more trademark-intensive industries. This helps offset the damage done by more universal issues and set Singapore apart from the crowd, both regionally and internationally.

“The challenges remain but as Asia continues to soar in the 21st century, Singapore is well placed to take advantage of this and make a strong case for itself,” says Jacob.

Meanwhile, Tang emphasised Singapore’s key strength going forward: its awareness of the challenges it faces.

“Our story for the next chapter will depend on whether Singapore can continue to remain relevant in a global economy that is increasingly driven by innovation,” he comments. “In turn, this will depend on our ability to bring value to global innovation flows—and being a place that understands IP from the economic and business angles will be critical to this.”

Looking forward, he said that IPOS would be updating Singapore’s IP laws and dispute resolution system to reflect the global market, including “fast-track” IP litigation.

“On the whole, Singapore appears to be bucking the global trend for brand restriction by strengthening its IP protection, attracting more and more trademark-intensive industries. This helps offset the damage done by more universal issues and set Singapore apart from the crowd, both regionally and internationally.”

Tang also pointed out that Singapore had recently signed an MoU with the Sino-Singapore Guangzhou Knowledge City Investment Development Company to establish the first International Intellectual Property Innovation Service Centre in the Sino-Singapore Guangzhou Knowledge City and will be helping the workforce acquire more advanced IP skills through a new Masters programme at the Singapore University of Social Sciences.

The initiatives put in place under the 10-year master plan are still in their infancy, but the full effects will likely be felt throughout the next decade as businesses of every size take advantage of Singapore’s expanding IP infrastructure.