Property rights, trademarks and consumer protection

* This is my article in BusinessWorld last September 18, 2017.

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Private property rights that people and businesses enjoy are among the cornerstones of a free and dynamic society. People have exclusive rights on what to do with their private properties — use them, sell, rent out, or donate.

However, when rights to private property — both physical and intangible assets — are unprotected, society can quickly degenerate into disorder. As a result, consumers will be unable to recognize which among manufacturers and service providers are trustworthy and which are suspicious.

Measuring the extent of property rights protection across many countries is done annually by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the International Property Rights Index (IPRI) annually and partners with independent, nongovernment, and market-oriented think tanks and institutes from many countries.

IPRI is derived by getting the score (1 to 10, 10 being the highest) of each country covered in three major areas:

  1. Legal and Political Environment (LP), covers judicial independence, rule of law, control of corruption, and political stability of a country or economy.
  2. Physical Property Rights (PPR), includes registration and protection of physical properties, access to loans.
  3. Intellectual Property Rights (IPR), includes protection of patents, trademarks and brand, and copyrights.

Countries with high scores in two or all three of these areas will have a high IPRI overall score and global rank (see table).

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Among the important insights in the above numbers are: One, the more developed the economies are like Singapore and Japan, the higher the IPRI score and global rank. Which implies that as private property is better recognized and protected, there are more economic activities and innovations that occur.

Two, the Philippines experienced some improvement in its global rank, from 77th out of 131 countries in the 2013 report. It rose to 64 out of 127 countries in 2017. Its low score in legal and political environment was compensated by its high score in physical property rights.

One emerging issue in IPR non-protection is plain packaging (PP) of tobacco products purportedly for health reasons. Besides being slapped with high taxes, tobacco products also feature graphic warnings on packaging. Advertising tobacco products have also been restricted and smoking in may areas have been disallowed, which are part of several moves to deter people from lighting up.

These have been tried in many countries but smoking incidence does not seem to significantly decline as people shift to cheaper and often, illegal, illicit products. So the next step is to prohibit the use of a tobacco brand, logo, or trademark. This has been done in Australia and there are plans to introduce legislation in Singapore, Malaysia and Taiwan.

This plan does not appear to be right because a brand or logo of a company represents how effective it is in developing consumer loyalty and service. Imagine also if all ice cream, all soft drinks, all beer, all wine, etc. will simply be labeled as “ice cream,” “soda,” “beer,” etc. with no brand recognition of who produced or manufactured the products.

Or all government departments and agencies (DoH, DoF, DPWH, NEDA, etc.) will lose their logo and will simply have a generic brand “Philippine government,” it would not seem right.

I have never been a smoker nor have I been a fan of smoking but was once a fan of tobacco ads in cycling or in the F1 race. But I will not recommend the scrapping of a brand or trademark of companies in a particular industry. People who hate the companies should attack them as such and they may even use the company brand for their attacks.

Intellectual property rights like medicine patents, song copyrights, company brand or trademarks, play an important role of recognizing efficiency and innovation. Consumers look up to these brands and decide which ones to support and patronize and which ones to reject based on their specific needs and interests.

Governments therefore, should respect and protect these IPRs the same way it should respect and protect physical private properties. Moreover, people own their bodies and not the state nor NGOs.

After rising taxes, health warnings, and business regulations are in place, governments should leave individuals and allow them to seek their own happiness without harming other people.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers, which is a member of EFN Asia and the Property Rights Alliance (PRA).

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ALF 2016, Panel on property rights

The 4th Asia Liberty Forum 2016, #AsiaLF16, has successfully ended in Kuala Lumpur last Saturday night. Among the important panel discussions was the one on “Protecting Yourself Against Daylight Robbery — Current Challenges to Property Rights”.

Photo below, holding the microphone is Wan Saiful Wan Jan, CEO of IDEAS Malaysia, who chaired the discussion. The speakers from left:  (1) Lorenzo Montanari of Property Rights Alliance (PRA), Washington DC, USA; (2) Barun Mitra of Liberty Institute, India; (3) Kriengsak Chareonwongsak of the Institute of Future Studies for Development, Thailand; and (4) Julian Morris of Reason Foundation, USA.

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Lorenzo spoke about the International Property Rights Index (IPRI) annual reports, especially the latest, 2015 Report.

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Barun talked about fighting for property rights of poor rural workers and households in their tilled land in India.

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Julian talked about IPR, especially of trademarks and company branding. His paper title was witty, “Marks vs. Marx”, the former refer to trademarks, the latter refer to IPR confiscation and stealing/socialization.

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Among the slides shown by Julian. An example of a medicine whose products and corporate brand/logo was copied and stolen to sell substandard or fake medicines, which can have serious or even fatal consequences to patients.

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Plain packaging of cigarettes, the logo and brands of Winfield and Marlboro were removed, only their product name is displayed. Further below, when plain packaging is applied on softdrinks/soda and beer.

I don’t smoke, never smoked my entire life, I derive zero pleasure in smoking, but I respect other people’s decision to smoke. It’s their life, their body, they can do whatever they want with their life so long as they do not harm other people, like puffing heavy smoke in an enclosed room with many non-smokers inside.

I think people should not smoke, but if they decide to smoke because they derive some pleasure in smoking — the same way that I derive pleasure in drinking with friends, frequently when I was still a bachelor, and seldom now with a family and 2 young girls — then their freedom to choose which cigarette products or brands to take should not be curtailed by the government.

After all, the government is a huge hypocrite institution that says “promote public health, discourage smoking and drinking” on the left hand, then happily and gleefully collects billions of pesos or dollars of “sin tax” revenues every year from more smokers on the right hand.

Meanwhile, I am thankful again to EFN Asia and FNF regional office for giving me a travel grant to attend the 4th ALF. Thanks Siggi, Pett, Jules.

Growth, IPRI 2015 and the TPP

Two weeks ago, I attended the launching of  the International Property Rights Index (IPRI) 2015 Report in Kuala Lumpur, then I also gave a short presentation on IPR and the Trans Pacific Partnership (TPP) Agreement.

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I showed portions of Dr. Ramon Clarete (University of the Philippines School of Economics, UPSE) paper during the UPSE-Ayala forum, Going Regional: Which Mega Trade Deals Should the Philippines Join? last February 2015.

He used the Gravity model of trade in estimating the level of bilateral exports or imports between two trading partners.

* Dependent variable: flow of trade between and among countries studied

* Independent or explanatory variables, their expected signs or relationships: GDP (+), population (+), dist. between two countries (-), commonality of language (+), shared borders (+), landlocked state (-).

* In addition, TPP and RCEP indicators or dummy variables are introduced: (a) TB1, 1 if both trading countries are TPP or RCEP members, 0 otherwise, (b) TB2, 1 if exporting country is a TPP or RCEP member, 0 otherwise; (c) TB3, 1 if importing country is a TPP or RCEP member, 0 otherwise. For overlapping memberships, a dummy variable where TPP*RCEP =1 if both trading partners are members of the two trade blocs.

And here are some results.

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Then I briefly discussed my article in BusinessWorld that day, Property rights protection in APEC economies. Then I discussed the IPR on medicines aspect of the TPP.

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And showed actual texts in the TPP agreement….

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Below, from left: Lorenzo Montanari, Exec. Dir. of the Property Rights Alliance (PRA); Dr. Sary Levy, author of IPRI 2015, and Wan Saiful Wan Jan, CEO of IDEAS and Director, SEANET.

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Concluding Notes:

1. Joining the TPP has more gains than pains for member-countries, especially in exports and overall GDP expansion.

2. IPR health provisions in TPP are not scary, they do not reduce access to cheaper generic drugs. Existing TRIPS flexibilities are maintained.

3. It seems that the generic pharma lobby + the anti-capitalism, anti-globalization NGOs created more noise and fear than what the TPPA actually provides.

4. There is more to fear in government taxation of medicines, in mandatory drug price discounts and price controls, than IPR protection.

“IPR create incentives for businesses to invest in ideas, to develop new products, and to earn a profit from the sale of those products. This in turn leads to improved customer satisfaction, improved profitability, and greater employment opportunities.”
– Prof. Sinclair Davidson, RMIT Univ. (Econ Dept.), Melbourne, Australia.

The full presentation is posted here.

IP development in Singapore

Of the 10 member-states of the ASEAN, Singapore is the most dynamic and most attractive in terms of trade, investments, finance, tourism and property rights protection, including intellectual property (IP). Which shows that the  main purpose  of having government is to help the people expand, not limit, their individual freedom, including the freedom to own and control private property, physical or non-physical or intellectual.

Below are three news reports that affirm this. Singapore is now ASEAN’s patent search and examination authority. This is something that other member-states of the ASEAN should  consider and emulate — when private property is secured and protected, more trade and investments, more finance and tourism, will come from many countries abroad.

So it is not about how populist and welfarist a government is that gives attractive and stable socio-economic environment; rather, it is the observance and enforcement of the rule of law, including the protection of IP rights (IPR).

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(1) Asian Scientist, Supporting The Asian Innovation Renaissance, May 21, 2015.

In total, innovators filed 2.57 million patent applications in 2013, a 9% increase from 2012. But while patent filings increased by over 26% in China, 12% in Australia and 8.3% in Korea, European filings were in decline, according to the 2014 World Intellectual Property Indicators report that gathers data on IP rights from more than 100 countries.

To help businesses in Asia convert IP rights into assets, the SMU School of Law will soon launch the Applied Research Centre for Intellectual Assets and the Law in Asia, in May 2015. “The Centre will focus on the interaction between IP law and business to facilitate appreciation of Asian intellectual assets and understanding of IP law in Asian economies, and the push for IP law cooperation in ASEAN,” explains the Centre’s director, Professor Liu Kung Chung.

(2) Channel News Asia, Singapore begins operations as ASEAN’s first international patent search, examination authority, August 31, 2015.

Local and global businesses and inventors will from Sep 1 be able to fast track their applications for patent protection in multiple markets via Singapore. This comes as the Republic kicks off operations as ASEAN’s first International Patent Search and Examination Authority under the Patent Cooperation Treaty (PCT).

In a press release on Monday, the Intellectual Property Office of Singapore (IPOS) said that Singapore is the fifth in Asia – after China, India, Japan and Korea – to join a group of 19 IP offices worldwide that have been appointed as International Authorities for the PCT.

IPOS also said that patent applicants from Brunei, Japan, Mexico, Laos and Vietnam will be the first to gain access to Singapore’s new service offerings as an International Searching Authority and International Preliminary Examining Authority in the coming months. These arrangements were set out under bilateral agreements signed recently at IP Week @SG 2015, said IPOS.

According to the authority, Singapore is a “choice PCT application destination” because of its quick office turnaround time of around 60 days for most cases, as compared to two to three years of waiting time for similar responses from other IP offices. Patent applicants could also enjoy rebates of up to 75 per cent when applying through IPOS.

(3) Channel News Asia, Singapore and UK boost intellectual property cooperation, September 21, 2015.

SINGAPORE: A new intellectual property (IP) agreement is set to benefit the Republic and the UK, with closer IP cooperation and enhanced UK-ASEAN trade relations, said the Intellectual Property Office of Singapore (IPOS) and the UK Intellectual Property Office in a joint media release on Monday (Sep 21).

The Memorandum of Understanding (MOU), which was signed on Monday, will improve international cooperation between the two IP offices, on issues relating to copyright, patents, trade mark and design, said the release.

“Singapore is an influential voice on issues of intellectual property in the ASEAN region,” said UK Minister for Intellectual Property, Baroness Neville Rolfe, adding that the MOU will allow the UK and Singapore to share best practices in areas such as IP rights protection, IP-related research and the streamlining of IP court processes.

Mr Tan Yih San, chief executive of IPOS, said: “This MOU reaffirms our mutual commitment to increase cross-border IP cooperation and provide a robust IP system for businesses and creators looking to expand into the UK, and those seeking to venture into the ASEAN region.”

IPRI 2012 Report

* This is my article in TV5’s news portal last April 04, 2012.
http://www.interaksyon.com/article/28670/fat-free-economics-property-rights-policy-lefts

Protection of private property rights and promulgation of the rule of law are the cornerstones of peace and order in society. Remove such property rights and society can quickly degenerate into chaos and disorder. For instance, if your house or car is also somebody else’s house and car, then they can take and occupy it anytime, anywhere.

There is one free market think tank, the Property Rights Alliance (PRA) based in Washington DC that conducts an annual study of how governments in the selected countries promulgate the rule of law and protect property rights. This annual report is called the International Property Rights Index (IPRI).

The study gives a particular score, then ranks those countries globally based on three major factors: (1) Legal And Political Environment, which includes judicial independence, rule of law, control of corruption and political stability; (2) Physical Property Rights, which include protection of such rights, registering property and access to loans; and (3) Intellectual Property Rights, which include protection of IPRs, such as patents and copyrights.

Our think tank here in Manila, Minimal Government Thinkers Inc. is among the nearly 70 independent and free market institutes, and the only Philippine-based think tank, that co-sponsored the publication of this annual study.

The 2012 Report has been released this week. Please note that while it was released this year, the basis of comparison were 2010 to 2011 data. Of the 130 countries covered by the study, the top 10 positions were garnered by developed economies with small populations. The first five, in order, are Finland, Sweden, Norway, Singapore, and Switzerland. The next five are Denmark, Luxembourg, New Zealand, Netherlands and Canada.

The Philippines ranked 87th out of 130 countries. While it performed fairly in Physical Property and Intellectual Property protection, it performed badly in the Legal and Political Environment. The culprit is the political instability, the bad state of corruption in government, poor observance of the rule of law and lack of judicial independence.

The country’s global rank in previous IPRI reports were 74th out of 115 countries in 2009, 80th out of 125 countries in 2010, and 87th out of 129 countries in 2011. So there was no change in the Philippines’ global ranking this year and last year.

Aside from Singapore, other Asian economies that performed well in the IPRI 2012 Report were Hong Kong in 12th place; Japan, 15th; Taiwan, 21st; Malaysia, 36th; South Korea, 40th; China, 57th; India, 62nd; Thailand, 69th; Indonesia, 86th; and Vietnam, also at 87th place.

The continued low ranking of the Philippines does not look good. If we need to attract more investors, grow the economy and create jobs, we need to assure entrepreneurs and employees, the average folks, that the fruits of their hard work and persistence in life are properly respected and protected. One should not toil hard abroad or in this country to buy a modest house and lot, only to find out later that the land is also being claimed by other people, resulting in additional costs and emotional stress in going to the courts and law enforcement agencies.

Populist and left-leaning policies – such as protection to squatters who illegally occupy private lands and an agrarian reform program with no final deadline and timetable – result in uncertainties.

These plus the weak rule of law end up in weak property rights enforcement for certain properties. These things must change if we want to retain the pool of talented entrepreneurs, as well as attract foreign professionals and investors, to come to the country.

Category
Score
Global Rank
Regional Rank (AO)
Legal and Political Environment
3.4
108 of 130
16 of 19
Judicial Independence
6.2
46 of 130
8 of 19
Rule of Law
6.4
40 of 130
7 of 19
Control of Corruption
5.9
40 of 130
7 of 19
Political Stability
7
13 of 130
3 of 19
Physical Property Rights
5.8
76 of 130
16 of 19
Protection of Physical Property Rights
6.5
50 of 130
10 of 19
Registering Property
6.8
117 of 130
16 of 19
Access to Loans
3.9
64 of 130
15 of 19
Intellectual Property Rights
4.9
73 of 130
11 of 19
Protection of Intellectual Property Rights
5.3
54 of 130
12 of 19
Patent Protection
0
Copyright Piracy
6
27 of 130
6 of 19
——–
And this is my article in the online magazine last April 13, 2012.
http://www.thelobbyist.biz/perspectives/less-gorvernment/1295-small-scale-robbery-and-property-rights)

In a small barrio in Pangasinan province that I visit from time to time to see the agro-forest farm that I help manage, I sometimes hear from our farm caretaker of small-scale robbery happening in the barrio or in the town proper. Things that are stolen are varied: from small items like vegetables, mangos, buko, chicken, kaldero, utensils; to more valuable ones like a tractor, a motorcycle, motorcycle parts, pigs, cows. There could be bigger items like land grabbing but I have not heard stories like that yet.

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The US-China IP cooperation dialogue

Here is another instance that while there are hawkish calls for military and political confrontation between the US and China in the future, another side of reality is that there are many instances of cooperation and dialogue between the two biggest economies in the planet. Being a non-believer and non-advocate of  BIG government, I side with the non-militarist view, of more trade and investments relations between and among countries as the key to a more peaceful, more prosperous world.

There is an existing US-China Intellectual Property (IP) Cooperation Dialogue. The first report was released last year and the new, second report was released by the joint US-China working group only last August 10. This initiative is a collaboration between the U.S. Chamber of Commerce and Renmin University’s China Intellectual Property Academy.  Meaning this is a non-government, civil society initiative, and it brings together 10 thought leaders annually, five each from the US and China.

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It is a good initiative, to strengthen IP rights in China. Being politically socialist, the possibility of the China government socializing and nationalizing certain private properties, physical or non-physical/intellectual, will always be there, no matter how small that possibility is. Thus, involving the academe and other civil society actors to help strengthen the rule of law, encourage people, public and private leaders, to respect and protect private property is a great initiative.

I saw the report. It examines five key areas: (1) IP and innovation in the technical sector, (2) IP and innovation in the pharmaceutical sector, (3) judicial protection of IP, (4) trade secrets protection, and (5) copyright enforcement.

This is the report’s Executive Summary:

  • Use quality instead of quantity as the measure of innovation.
  • Explore the possibility that a judicial interpretation be issued to ensure no injunctive threat is available until utility model patents have been substantively examined for validity.
  • Adopt a more balanced and market-driven approach to promote innovation by entrepreneurs, inventors and universities.
  • Improve the patent linkage system, and provide effective protection for clinical data of new chemical entities by using the ongoing effort to amend the Patent Law and the Drug Administration Law as an opportunity for change.
  • Initiate a special study on establishing a single IP appellate court to unify China’s judicial adjudication of IP.
  • Improve the guiding case system with respect to procedures for reviewing, selecting and releasing cases and support better adoption of case law information.
  • Recommend research on the possibility to have a stand-alone and uniform trade secret law, in order to effectively maintain a fair market competition environment.
  • Address new problems created by changing technology and business models; develop a good ecosystem for innovation by the interaction of law and the marketplace; and provide more market opportunities for copyright holders while dealing with piracy.

Cool. The report also examines why China’s talent pool and investments did not result in new drug discoveries and calls for transparency and stability of the Chinese legal process, including establishing one single IP appellate court, a searchable case database and an amicus system.

As I argued in my previous papers here, not all ideas are the same. Many are too common or wild or plain lousy and idiotic and hence, they do not need protection. Their supply is very high and non-scarce. Bright ideas are scarce, they need protection.

An effective IP system that leads to a lot of innovation should be supported by the rule of law and implemented in a competitive environment. Continued innovation, improvement of old and existing technologies and processes, is our assurance for a more prosperous, wealthier and healthier life in the planet.

I hope that this non-government, civil society initiative will be heard and studied especially by the China government. Being a member of the civilized international community of nations and governments, respect of private property even by socialist leadership is a responsibility of member-governments.

See the full report here, 70+ pages, more than half in Chinese language,http://www.theglobalipcenter.com/wp-content/uploads/2015/08/US-China-IP-Dialogue_2014-2015.pdf

Patent protection, data exclusivity, cheaper medicines law and the TPP

There was a DOH Advisory Council on the Implementation of RA 9502 (Cheaper Medicines Act of 2008) last April 20, 2015 that I was not able to attend. The Secretariat failed to invite me, but at least they sent me the minutes of the meeting, Among the speakers that day was Atty. Allan Gepte of the Intellectual Property Office (IPO), DTI and he was asked to give updates about the US (and PH?) Free Trade Agreement (FTA) and the European FTA (EFTA). He said that he was not aware of any current (PH-) USFTA negotiations and there are talks among EFTA countries.

He gave some updates about IP concerns in the country instead, like the DTI-IPO-DOH public consultation on IP issues, with some NGOs last March 31, 2015. The topics covered data protection patent term extensions. I was not there in that meeting.

But I  have attended the same DTI-IPO-DOH meeting last June 04, 2015 at the DTI International building. It was chaired by DTI Assistant Sec Rodolfo, IPO Dep. Allan Gepte, and DOH-NCPAM Doc Meme Guerrero. I learned about the meeting because three days ahead, June 01, there was another anti-TPP, anti-IPR forum at PRRM, QC, sponsored by IDEALS, MAG, AGAP and CHAT, and the speaker was Dr. Burku Kilik of Public Citizens, an NGO in the US. Then there was a belated invite to attend the March 31 meeting at the DTI.

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I think it was a limited consultation because only very few NGOs were there, led perhaps by the Focus on the Global South (FGS) leader, Joseph Purugganan, plus the Fair Trade Alliance, they are campaigning against strong IPR protection in the non-existent EU-PH FTA or non-existent PH membership in the TPP.

At the DTI consultation (a few CHAT members were also there, also Dave Escalona of Unilab), I commented that the PH is not even among the invited members of the TPP (only 4 of 10 ASEAN countries were invited to the TPP) and yet there are a number of noise against those proposed FTAs the issue of IPR.

Assuming for the sake of arguments that (1) there is a TPP Agreement already today or tomorrow, (2) the PH is a member of TPPA, and (3) all those “dreaded data exclusivity”, etc. provisions are implemented — then they will affect only a few, newly-invented medicines and not the 90-99% of off-patent, useful generic medicines in the WHO and DOH essential medicines list (EML). I think anti-IPR campaigners are not aware of this, perhaps they think that any extended regulatory data protection (RDP) and patent protection on innovator drugs also apply to off-patent, generic drugs. Far out, man.

I posted the above comments at the AC email loop. Atty. Joey Ochave, SVP of Unilab and a friend since the 80s in UP Diliman, replied to my comments. He said that

“data exclusivity can apply to off-patent, or even non-patented, drugs. Patent protection is different from data exclusivity but both seek to prevent the entry of generic competition and preserve the monopoly status of the originator. The only difference is patent protection is protected by TRIPs while data exclusivity is TRIPS Plus. Data exclusivity is NOT required by WTO. This is why the US tries to insert it in bilateral or multilateral trade agreements.”

I thanked Joey for his comments. These are legal matters, outside my usual cup of coffee so I yield to his explanation.

For now, the PH government through DTI Sec. Domingo has officially signified its intention to join the TPP in the next round of membership expansion. I support this move, I believe that it is not possible for the PH to have a bilateral FTA with the US or even Canada, and the US will remain to be the biggest, most innovative economy in  the planet for the next decade or two. The only way to have an FTA with them is through the TPP.

If what Joey mentioned that data exclusivity is to “prevent the entry of generic competition”, then it will have a rough sailing in the PH as access to generics is both a health and emotional issue here and in many other countries.

Things like this, the AC can discuss as RA 9502 is first and foremost, about IPC amendment and price regulation is just an add-on or after-thought chapter in the law. I have attended 2 fora already about TPP and IPR involving 2 foreign speakers who are generally anti-IPR and  both facilitated by IDEALS and CHAT. The first was a lady speaker from France, the 2nd was another lady speaker from the US, from Global Citizen. The 2 fora did not have legal minds as discussants after the presentation.