By Vincent Teh
This article first appeared in the August 2015 issue of Business Today.
In the past three decades, the exponential growth of technology and rapid globalisation of trade have to some extent outstripped the development of intellectual property laws and regulations. This led many to question the practicality of intellectual property protection and whether it is still needed.
That question, however, I think is misplaced. Intellectual property is essentially an asset, and like any other assets that are of value, you will naturally want to protect it. We’ve created bastions, castles, moats, booby traps, labyrinths, vaults, safes, subterranean bunkers and sharks with lasers attached to their heads, to keep our valuable possessions safe. We use security codes, finger print scanners, retina scanners, voice recognition, face recognition and hundred character long alphanumerical passwords to protect our money.
So why wouldn’t we want to make an effort to protect our intellectual assets?
As our global economy is slowly transitioning to a knowledge-based economy, IP protection will become increasingly more crucial. Yes, I concede that the development in some areas of IP law is at the pace of a handicapped snail. Yes, sometimes it seems as though the law has no idea how to adapt to the changing economical landscape.
But that doesn’t mean we should roll over, play dead and hand our IP rights over to every Chan, Jorge and Harry. We humans did not get to where we are now by quitting. Can you imagine if our caveman ancestor had said “fire hot… burn hands… fire bad… no want fire!” We must adapt and utilise the present laws and regulations to make the best of things, because unless and until we are living in a utopia where everything is communal and shared (which will never be the case), IP protection will remain vital. Accordingly, it is not a question of whether IP protection is still relevant, but I think the question should be whether the IP protection strategies created decades ago are still relevant today.
Is IP Registration Enough?
IP registration has long been touted as the pinnacle of IP protection. And fair enough, IP registration provides you with a prima facie evidence of ownership, much like a title deed of a house. It also allows you to enforce your rights with infringement action. Indeed both of these are very crucial weapons to protect your IP against anyone who wishes to misuse it. However, with copycats operating with more audacity, speed, and proficiency; has IP registration become the Maginot line of IP protection?
Normally registration requires time (e.g., in some countries it could take years for an IP right to be registered). For some IP this wouldn’t be much of a problem. Trademarks, for example, tend to increase in value with time. But now, a lot of modern technologies have the shelf life of a fruit fly, becoming museum exhibits within a few months. This situation requires fast action, and businesses simply cannot wait for a patent to be registered. For this we can take a page from the operation module of the SR71 Black Bird.
The Black Bird is an American long-range strategic reconnaissance aircraft that was designed to operate deep behind enemy lines. However, strangely enough, for an aircraft whose purpose was to snoop around Stalin’s living room, it was not designed to carry any defensive weapons. The Black Bird didn’t need any because it’s the love child of a ninja and the Roadrunner. It was designed to be stealthy to the enemy’s radar, using radar absorbing materials and shapes that would reflect the radar’s beam away from its origin. And with a top speed of 3,540 km/h, it’s the fastest air-breathing aircraft in the world. The plane could easily outfly any aircraft, missile or empty vodka bottle that Mother Russia could throw at it.
Drawing inspiration from the Black Bird, you can rely on trade secrets to be stealthy, i.e., keeping your technology hush hush by limiting the access to the technical know-how to as few as possible, and always on a need-to-know basis. It is also crucial to back that up by signing Non-Disclosure Agreements/Confidentiality Agreements with anyone who will come in contact with your secret (e.g., OEM manufacturers, employees, contractors, etc.).
You would also want to hit the market hard and fast before any competitors can reverse-engineer, replicate and compete with your products. Rapid development, production and commercialisation of your technologies will mean that the competitors won’t even know what hit them before you ran away with their market share.
However, the drawback of trade secrets is that, unlike registered IP rights, you do not have exclusive rights to your creation. This means you will not be able to prevent others from coming up with the same products or processes independently of you. Also, it is difficult to keep any secrets over a long period of time or when more people are aware of it. Some products will require a long R&D process and may take a long time to market to the consumers. Without patent or design registration, you will quickly lose market control and share as more and more of your competitors free ride on your R&D.
Sometimes you may also find that your creation does not fit into any of the commonly recognised four or five IP rights and thus cannot be registered. You may have a brilliant family recipe from your third cousin, twice removed, or you may have a great teaching method that would scare the stripes off the Tiger Mom. Both of which typically cannot be registered as patents. Nevertheless, all is not lost, you may still be able to find a way around that by relying on your branding to carve out a sizeable chunk of the market pie.
Ever heard of Brand Loyalty? No? Try telling an Australian that Vegemite tastes exactly like Marmite. You’ll likely be battered with a didgeridoo and/or thumped with boomerang clapsticks. Oftentimes, human affinity for fanaticism is the greatest blessing to businesses. Brand loyalty will help turn your customers into bosom friends that will stick with you through thick and thin, no questions asked. The prerequisite of attaining brand loyalty is of course the existence of a brand, and the most common manifestation of a brand is in trademarks and sometimes the product.
Think the Golden Arches, the Coke bottle, the robin shell blue box, the blue diamond shaped pill, the Montessori education, the Dyson vacuums, the Atkins diet; all of which may be registered as either trademarks, designs or both. Registration of your brands gives you exclusive rights to them. It allows you to hold on to your identity, and with that, all your aboriginal musical instrument swinging devotees.
While it is true that IP registration is not a panacea to all your problems, we cannot deny that it still has a big role to play in the new economy. Registration gives you exclusive rights to use and commercialise your intellectual property and it is this monopolistic right that will give value to your creation. Think of it this way: If I offered you a brand new Lamborghini for 20% of the market price, would you buy it? What if I told you there is a catch? The catch is that (i) you cannot sell the car to anyone; (ii) you must never lock the door; (iii) you must leave the keys on the dashboard; and (iv) you can never stop anyone who wants to from driving your car. Would you still buy the car?
Note: The views expressed in this article are the author’s own, and need not reflect the views of KASS nor of its clients.
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