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Monday, July 17, 2017

Trumping ethics in the Philippines

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Eventually the allegations of Trump’s conflict of interests had to reach SE Asia! Many newspapers have been hard at work uncovering the Trump organisation's business networks around the world.
Businesses owned by the Trump family hired a Philippines law firm owned by a Philippines government officer to handle their IP work. Elpidio C Jamora Jr is a name partner at Manila law firm Carag, Jamora, Somera & Villareal. The firm files trademarks for the Trump Organization and Ivanka Trump’s personal brand. Jamora is also chairman of the largest state-owned construction company the Philippine National Construction Corporation (PNCC) and was sworn in by the President of the Philippines.  

Meanwhile Trump plans to open a tower in Manila, which is a project run by Jose EB Antonio, a Filipino developer who was also named by the Philippines government as special trade envoy to Washington in 2016.


Monday, July 10, 2017

Indonesia's new IPR Customs Regulation

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Indonesia has taken its first steps towards a Customs IP border protection system.The Indonesian Government has issued Regulation No. 20 of 2017 on Controls of Import and Export Goods Constituting or Deriving from Intellectual Property Rights Infringement (“Regulation”). The Government Regulations was stipulated on 30 May 2017, enacted on 2 June 2017 and takes effect from 2 August 2017. It implements provisions in Law No. 17 of 2006 on Amendments to Law No. 10 of 1995 on Customs.

The Regulation provides for an IPR recordal system for trademarks and copyrights only. Recordals are valid for a year, but renewable. Applications can only be made by Rights Holders with a business entity domiciled in Indonesia. Applications must attach evidence of ownership, product authentication, distribution routes and marketing information of products. Customs will approve or reject an application within 30 days. Specific procedures will be set out in a government regulation from the Ministry of Finance.
Preliminary Restraint of goods occurs first for trademarks and copyrights that have been recorded. Customs can detain suspected infringing goods as follows:

  • Customs will send a Notification of Restraint to Right Holders
  • Rights holders must confirm the notice within 2 days; and
  • Right holders must then file a Suspension Request to Commercial Court within 4 days of their confirmation of the notice.
For other IPR infringements like patents and industrial designs, the Customs have no power of preliminary Restraint and Right Holders have to file a Suspension Request to Commercial Court.

Next step is a Suspension Request to Court. Right Holders must do three things

  • pay operational costs security to Customs of Rp100,000,000 (about USD 7,500) in the form of bank or insurance guarantee.
  • submit sufficient evidence of the IPR ownership and infringement
  • apply to Court for physical examination over the goods for which Suspension is being requested.
The Regulation states that the Commercial Court shall approve or reject the Suspension Request within 2 business days and notify Customs 1 day later.  There will be further Regulations on the procedure for the Suspension Request.

Execution of Suspension Order is the third step. If a Suspension Order is issued, Customs will notify the Right Holders, the importer or exporter of the goods and the DGIP. Within 2 days of the court decision, Right Holders shall submit an application to Customs to set a schedule for the physical examination of the suspended goods. Customs will detain the goods for up to 10 days from the date of the receipt of the Suspension Order. Rights holder may apply to renew one time for a maximum 10 days by providing additional operational costs security. Under certain circumstances, for example where the detained goods have short shelf life, the importer/exporter or owner of the goods may apply to Court for a termination of the Suspension Order by providing security.

Once the Suspension Order expires, the detained goods can be dealt with as follows:

  • destroyed by Customs in accordance with their procedures
  • surrendered to investigators/court pursuant to a legal action;
  • handed over to the Court’s bailiff in the event the Right Holder files an action and/or application for security for costs over the suspended goods; or
  • by way of private settlement of disputes
The security deposit provided to Customs may be used to cover all operational costs such as transport and storage costs. Any shortfall will be invoiced to the rights holder, and any excess returned. The procedures will be governed by another Ministry of Finance Regulation.

There are several exceptions. The Suspension provisions do not apply to transhipment cases. All Customs will do in these cases is notify the Customs of the next country of destination. There will be further Regulations by the Ministry of Finance to deal with commercial purposes of goods brought by passengers, border crossers, or consignment sent by postal or courier services. There are also Customs offences in other criminal laws which may take precedence, e.g. smuggling.

The Regulation is a step in the right direction and sets out procedures for Suspension Requests. However a lot of questions remain and additional rules are required before any recordals or seizures can be made. For now IP holders need to await further news on the additional regulations, which are being drafted now by the Ministry of Finance and more information on how the present ones will be interpreted.

Sunday, July 2, 2017

Philippines IPO disputes rule changes

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The Philippines is proposing to amend rules on disputes heard at IPOPHL's Bureau of Legal Affairs (BLA). The BLA hears mainly oppositions and revocations, but can also hear other kinds of IP disputes from infringement to revocation.

The goal in the changes is increased efficiency. Mandatory ADR is introduced to resolve some cases earlier. Motion timeframes will be reduced to reduce delays. Decisions no longer need to be reviewed by the director and but appeals have been widened.

The BLA's system is already relatively efficient, more so than the courts which can take years to hear cases, but these improvements should help further.


Tuesday, June 20, 2017

Singapore, transhipment and illicit goods

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Changes are proposed to the Singaporean customs regime. The aim is to increase the country’s attractiveness as a transhipment hub. Singapore is already the largest transhipment port in the world. But industry is worrying that the amendments leave enforcement gaps and increase the volumes of counterfeit and other illicit goods passing through Singapore.

A public consultation is under way. One change relates to the submission of manifest data which must be provided within 24 hours of arriving and 48 hours of exiting Singapore. Normally this must contain particulars such as the quantities, brands and description of goods. The amendments allow for exemptions for large swathes of shippers.

The European Chamber of Commerce opposes this - “Singapore’s free trade zone (FTZ) [is] vulnerable  to abuse as it weakens the country’s governance of them”. Indeed the Illicit Trade Environment Index cites Singapore’s 7 FTZs as a serious risk over the trade in illicit including fake goods. The Economist Intelligence Unit identified Singapore as a problem due to a lack of vigilance over its FTZs. Basically they said that Singapore the other way while large quantities of illicit and counterfeit goods pass through its port destined across the world. Singapore earns income from every container that passes through it, so looking the other way reaps the country a lot of money for the suspected volumes of illicit goods including fakes, travelling across the globe which are transhipped through Singapore.

Singapore still does not allow for customs recordals but requires rights owners to initiate civil proceedings to obtain civil court orders to seize fake imports, at great cost.  But for transhipped goods there is virtually no policing at all. Add to that the use of Indonesia’s nearby FTZ in Battam for export processing and long time experts in the region quietly talk of transhipment of illicit goods being Singapore’s dirty little secret.

Monday, June 19, 2017

Online businesses and tax in Indonesia

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In its bid to rein in tax revenue from foreign online businesses such as the social media giants, the Indonesian tax authority issued Circular Letter No. SE-04/PJ/2017 on the Determination of Permanent Establishments for Foreign Tax Subjects Which Are Providers of Applications and/or Content Services Through the Internet (“Circular Letter 4/2017”). 

The circular is addressed to Over-the-Top Services (application or content services through the internet). Under the circular, foreign Over-the-Top Services that come within the meaning of permanent estalishment under the circular will be subject to Indonesian tax. Permanent establishment within Indonesia includes the following whether owned, leased or used by Foreign OTT Providers for the operation of their businesses or activities:

a. Place for management activities;
b. Branch office;
c. Representative office;
d. Office buildings;
e. Garage or workshop;
f. Warehouse;
g. physical space for promotional and sales activities;
h. Computers, including servers and data centers;
i. Electronic apparatus (i.e. devices which contain computer programs that may perform activities or which may respond based on automatic inputs); and
j. Other automatic devices.

Entities are also considered as permanent establishments if it provides any form of services for period of 60 days or more within any given 12 month period.

There are still several aspects of the circular that requires clarification, namely:

1. Online businesses that does not have any physical assets or activiy in Indonesia may not be caught by the first definition of permanent establishment.
2. As for the meaning of “60 days or more”, it is not clear if this is computed in terms of accumulative hours of service on a 24-hour day.

It is hoped that the Government will help to clarify this for foreign online businesses that deliver Over-the-Top services without the need for any permanent establishment. As it is is the rules seem to be wide enough to catch anyone trying to establish an operation within a global digital business.

Tuesday, June 13, 2017

New Cambodian Consumer Protection law

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Cambodia's Ministry of Commerce will meet other ministries later this month to review progress on the country’s first consumer protection law and will formulate a plan to complete the draft legislation, a ministry official said recently.

This long-awaited legislation aims to level the playing field for businesses and protect consumers by reducing unethical and illegal retail and promotional practices. Its enactment will help empower authorities to crack down on fake or falsely advertised products, as well as food and medicinal products that pose a risk to the health of consumers. The law will also allow consumers affected by these products to seek recourse against their producers.

The Ministry of Commerce received financial and technical assistance from the ASian Development Bank to work on the draft law. Legal experts from New Zealand sent by the ADB worked with the Ministry to draft the law based on consumer protection laws in New Zealand and some ASEAN countries that have similar economic conditions to Cambodia.

Whilst not specifically an IP law, there will be a number of provision is relevant to IP holders to protect against unfair competition.