Face to Face with Ada Leung JP, the Director of the Hong Kong Intellectual Property Department (‘IPD’)

Ada showed me the oldest trademark registration in Hong Kong which was dated back to 1874. The mark consisted of an eagle design and the words ‘NESTLE’s EAGLE BRAND’. The mark had an antique appearance, having an old burnt treasure map effect. Hong Kong’s trademark law was introduced in 1873 and is one of the oldest in the world (even older than the legislation in the UK). The registration of trademarks was administered by the Office of the Colonial Secretary at the time. This shows the long history of intellectual property (‘IP‘) protection in Hong Kong.

Ada majored in science. After completing her Bachelor of Science, she eventually joined the government as an executive officer. She wanted to pursue further studies and applied for a government scholarship for an Applied Science degree in a medical related field. However, the scholarship was not available that year and Ada was told that she might consider a legal training scholarship instead. Knowing at the time the high demand for local lawyers, Ada started studying law. She then joined Attorney-General’s Chambers (‘AGC’) as an Assistant Crown Counsel a.k.a. trainee. After her training Ada was appointed as Crown Counsel and gradually promoted to Senior Crown Counsel.

After five years at AGC, Ada had contemplated specialising. Although the thought of specialising in IP had not occurred, opportunity led her to it. One of Ada’s colleagues at AGC told her about at an opening at IPD which was still relatively new as it had been established for approximately five years. Ada conducted some research and learnt that IP was an emerging area at that time with Hong Kong being a founding member of WTO and the implementation of the TRIPS Agreement. Moreover, there were a lot of amendments to the IP legislation and there was discussion of localisation of Hong Kong’s IP legislation at the time.

IP was appealing. It was up-and-coming. However, Ada hadn’t studied IP. It was not that common in those days for LL.B. programs to offer IP as an elective course, and the university she studied at did not offer such program. She set her mind to it. She learnt IP after joining IPD in 1995.

Role of IPD

IPD, compared with other government departments is relatively small and new, as it was established in 1990. There are around 230 staff members including examiners, lawyers, marketing, administrative and IT staff.

One of the major roles of IPD since the very beginning is to administer the registration of trademarks, patents, and designs. In particular, registration of trademarks is their bread and butter. “We have close to 40,000 trademark applications each year.” The range in the recent years has been between 35,000 and 40,000 trademark applications per year. “You can imagine the amount of work that we are handling taking into account that we have to search each and every new application against our 400,000 records.”

“There are also back and forth communications if we raise objections.” If IPD raises objections, then the applicant will have to respond to the objections within a certain period which is set out in the legislation, and there would be a chain of correspondence before a decision is made. If eventually the application is not accepted, the applicant can apply for a registrability hearing. If however the application is accepted, IPD would advertise the application to check if there is any opposition to the registration. Any opposition could result in an opposition hearing.

Another main role is to act as the government’s legal and policy adviser. “We provide legal advice to other government bureaus and departments on IP related matters. For example, if a government department handling a contract and there are IP issues for which they need legal advice, they will come to us. We have a team of lawyers handling this sort of requests for advice. We also provide policy advice to our policy bureau, namely the Commerce and Economic Development Bureau. They are the responsible policy bureau on IP policies and legislation, but we provide advice to them. We look at the international development, we conduct the legal research, and we provide the assessment to them both from a legal perspective and policy angle and provide them with policy options to consider. So, we work very closely with our policy bureau on development of future legislation and work with Department of Justice on the drafting of legislation.”

A third major role is to promote and educate the public on protection of intellectual property. “We have a budget of around nine million Hong Kong dollars each year to do local promotion as well as fostering regional cooperation and cooperation with the Mainland. Since 2015, we have had a budget each year to promote IP trading. We provide support to SMEs and promote the importance of making use of IP trading such as selling, assigning, and effective licensing to realise the value of IP. We also support businesses, especially SMEs in assisting them to be aware of the value of and managing their IP, and to formulate their strategy in commercialising their IP.”

In 2015, the Working Group on IP Trading which was formed in 2013 released a report with 28 recommendations under four strategic areas on measures to further develop Hong Kong as an IP trading hub in the region. “We are working on those measures. The four strategic areas include enhancing or rather further enhancing the IP protection regime; further supporting IP creation and exploitation; fostering the strength of our IP intermediary services and manpower capacity; and collaborating with different stakeholders in Hong Kong as well as externally.”

IPD currently runs a scheme which provides free IP consultation services for SMEs. “With the assistance and support of the Law Society of Hong Kong and its members, we offer a one-on-one free IP consultation for SMEs. The pilot service commenced in 2015 and was formally launched in September 2016 and is well received by SMEs. The aim is to raise their awareness of IP, assist them to develop effective IP management and commercialisation strategies, and to enable them to deal with possible challenges.”

Furthermore, IPD introduced the IP Manager Scheme also in 2015. “We have had over 700 business enterprises joining the IP Manager Scheme. Over 1,100 participants have already attended our two-day training course with thanks to the tremendous support from experienced IP practitioners. The course provides basic legal concepts on IP protection as well as suggestions and advice on formulation of IP within their businesses. We also offer a more advanced workshop which is a half-day course. Additionally, we provide information leaflets and reference materials to them. For example, two booklets in the areas of IP audit, diligence and licensing authored by Mr. Kenny KS Wong, Chairman of the Intellectual Property Committee of the Law Society of Hong Kong, were published in collaboration with the Law Society of Hong Kong.”

”I think these booklets are very useful for SMEs, and would help them identify important IP assets and properly manage them. Also, infringement threats and risks might be identified and resolved at the earliest opportunity. Besides, SMEs can grasp the basics of the general contents of an IP licence and the preferences of licensors and licensees from their different perspectives. So, these are the sort of practical tips well summarised in the form of a booklet.”

What are trademarks? “Well, I think we all come across trademarks day-in-day-out. Of course the Eagle Brand trademark I showed in the beginning, some might not know of it but for us especially the older generation like myself, should be very familiar with this trademark as it one of the few brands if not the only brand of milk that existed when we were young. A trademark is a sign that distinguishes goods or services provided by one trader from another. You could say it is a form of identification as it displays the trade origin of the goods or services. Sometimes it is referred to as a brand name. There are however some requirements in law which one has to fulfill in order for the brand name to be a registered trademark.”

Do trademarks require registration? “A brand does not have to be registered as a trademark in order to be protected by law. It can be either protected as a registered trademark, or it can be protected as an unregistered trademark under common law. Of course there are a lot of advantages for it to be registered as it would provide certainty. It becomes public knowledge that a particular mark belongs to a particular trader. When there is dispute it is easier for the registered proprietor to establish its case. Generally, we expect most businesses would have applied for registration if they are conducting their business in Hong Kong.”

If the largest number of applications are for trademarks, what comes next? “Patents. We have around 13,000 applications for standard patents each year. We have short-term patents and standard patents. The former deals with protection for eight years whereas the latter is protected for 20 years. At the moment we do not conduct substantive search and examination of the novelty or inventiveness of the invention. Based on a report issued by the Advisory Committee on Review of the Patent System in Hong Kong in late 2012, we are undertaking a major reform of our patent system. The Committee comprising legal professionals, patent practitioners, members of the academia, members from the industrial sectors and officials from the relevant government agencies, recommended that one of the new major initiatives is the introduction of an original grand patent system in Hong Kong while retaining the existing re-registration route. The Government accepted the report of the Committee in early 2013. Since then, we have started to take forward the recommendations of the Committee. Hopefully the new patent system will be up and running in 2019.”

This means that in future an applicant can apply for a standard patent here in Hong Kong without first applying anywhere in the world. “We will have substantive examination in our system, although in the beginning we expect that we will not have the capacity to do the full range of substantive examination here in Hong Kong which requires a lot of technical expertise, a very strong database and so on. We would do the substantive examination with the assistance of the State Intellectual Property office in Beijing. In the future we hope to build our own substantive examination capacity in patents area, maybe starting with particular technology areas.”

International registration

What if a business in Hong Kong wishes to register its trademark internationally? “The Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (‘Madrid Protocol’) adopted in 1989 is an international treaty that facilitates international registration of trademarks. Currently there are 100 countries that are party to the Madrid Protocol. Although Mainland China is a party to the Madrid Protocol, the Protocol has yet to be applied to Hong Kong. Hong Kong has an independent IP system which is separate from the system in Mainland China. However, under the international registration system, there is usually one trademark office per country.”

“The good news is that it has been decided Mainland China is going to have two trademark offices for the purpose of this international registration system, which will include the Hong Kong trademarks office. So in the future, a trademark owner will be able to apply for international registration of trademarks in Hong Kong designating different countries that are Contracting Parties to the Madrid Protocol. Then the IPD would have to look at their application to see whether it complies with the domestic legislation. The convenience lies in the application stage. The applicant needs only to file a single application and pay one set of fees. If an international application is filed in Hong Kong, we would then send it to the International Bureau of the World Intellectual Property Organization (‘WIPO’) after a formality checking. WIPO will distribute it to the destination IP offices for further handling. Conversely, an overseas applicant for international registration may file an application in one of the Madrid Protocol countries and seek trade mark protection here by designating Hong Kong as one of the territories they wish to cover.”

“Once the amendment of our trademark legislation is passed and other preparatory tasks (such as building the necessary IT infrastructure) are completed, Mainland China will submit a formal notification to WIPO to apply the Madrid Protocol to Hong Kong.” Would overseas registration then affect existing registrations in Hong Kong? “IP is basically territorial. If the trademark right granted in let’s say UK has no effect in Hong Kong, then we would not consider it as conflicting or infringement as far as Hong Kong is concerned. But there could be a scenario where, for example, there is already a local registration of a particular trademark here in Hong Kong and a different overseas proprietor of the same mark, say in the UK, wishes to extend its international registration to Hong Kong but the mark is conflicting as the goods are overlapping somehow.”

“Although the international registration originating from the UK was not extended to Hong Kong at the time of registration, once the Protocol is applied to Hong Kong the registered owner in the UK may decide to extend that registration to Hong Kong, which is permissible under the Madrid system. However, if the proposed extension conflicts with a Hong Kong domestic registration which is already on the register, a decision will have to be made as to who should have priority. Prima facie, the local proprietor should have an earlier right, just like the case where a conflicting domestic application is made when there is already an earlier registration. But of course, it is open for the subsequent applicant to challenge the validity of the earlier registration, and in which case, the Registrar will have to make a decision on the evidence produced by the parties.”

Hong Kong and Mainland China

“Although Hong Kong and Mainland China have separate IP regimes, we do have a lot of cooperation with our mainland counterpart including at a national level, regional level, as well as provincial level. I would like to mention that the IP office in Mainland China is one of the biggest in the world and has a very strong patent examination capacity. We started our cooperation with mainland since around the year 2000 and of course, we have seen a growth of the mainland IP office in a very fast pace in the past years. I believe it received 1.3 million patent applications in 2016 which is the highest in the world.”

What happens when for example Party A from Hong Kong travels to Shanghai and sees this beautiful coffee shop owned by Party B and likes it so much that Party A decides to open a coffee shop with a similar name and design as the one he saw in Shanghai? “It would really depend on whether that Shanghai coffee shop has any business in Hong Kong or any goodwill in Hong Kong. The easiest way is to prove that the Shanghai coffee shop has a business in Hong Kong established but in some cases it might be that Party B has not yet established any business in Hong Kong. There might still be a situation though where goodwill, ie the reputation of the Shanghai coffee shop is so strong that Party B could argue that his coffee shop has a spill-over reputation in Hong Kong. It would of course be more difficult to prove but it would depend on the evidence.”

“Of course, this scenario would not be limited to Mainland China and Hong Kong. It could apply to other countries too. However, Mainland China and Hong Kong are so close geographically and in terms of culture with frequent exchange of personnel and high volume of travel between the two places, so the possibility of such occurrence might be greater.”

Dispute resolution

“For IP infringement, an owner can commence civil action in court. There are also criminal sanctions enforced by the Customs and Excise Department in some cases of trademark and also for copyright infringement. I think arbitration and mediation are options which parties should consider when they have a dispute on IP matters.”

“Of course, one of the biggest advantages of using arbitration and mediation instead of the court’s proceedings is party autonomy - they can well choose their arbitrator or mediator and can choose the issues which they like to be resolved first. They can also decide on where the hearing should take place and the applicable law and so on. The Arbitration Ordinance has been amended and it has been clarified that IP disputes whether or not in Hong Kong, and whether it involves validity or otherwise (because in the past there has been some uncertainty on whether issues involving validity of IP rights could be resolved by arbitration) can be resolved by arbitration. We produced a leaflet together with the Department of Justice on the amendments and benefits of resolving IP disputes by arbitration.”

Ada is responsible to lead, manage and develop the Intellectual Property Department as a specialised legal services department in the Government. She also performs the statutory functions as Registrar of Trade Marks, Patents, Designs and Copyright Licensing Bodies. She also acts as the departmental Controlling Officer in financial management.

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Editor, Hong Kong Lawyer

Legal Media Group Thomson Reuters

navin.g.ahuja@thomsonreuters.com