HK SMEs: Building up Intellectual Property

Raymond Wong, AsiaBC’s managing director, was interviewed by HKTDC publication team in April to share his view on protection of Intellectual Property (IP) rights among Hong Kong small and medium sized enterprises (SMEs). A month later, HKTDC published the May-2017 issues of Fair Catalogue of World SME Services, the magazine covers a story of IP protection in Hong Kong and quotes Raymond’s words. We summarize this report and write down the ideas here, we hope that this post can help SMEs to know pros and cons of IP registration in Hong Kong.

7 categories of IP rights

According to Intellectual Property Department of HK government, the authority to promote awareness and protection of IP rights, there are 7 categories of IP rights for people and organizations to register, these IP rights can protect the items from being used other than their registered owners:

1. Trademarks
2. Patents
3. Designs
4. Copyright
5. Trade Secrets (Undisclosed Commercial Information)
6. Protection of Layout-Design (Topography ) of Integrated Circuits
7. Plant Varieties Protection

Among them, trademarks, patents, design, copyright and rights in layout-design of integrated circuits are popular to majority of SMEs:

• Trademarks mainly relate to company logos and names, as well as brand names, distinct shapes of products and fictitious characters.
• Patents, both standard and short-term types, protect inventors, whether they are physical objects or processes/solutions, from being commercially used by others.
• Designs protect the visible features of the shape, configuration, pattern or ornament applied to an object that is appealing to the eye.
• Copyrights cover original literary, dramatic, musical and artistic works.
• Rights in layout-design of circuit protect the topography of integrated circuits in computer chips and semiconductor chips in computers and other products that rely on computer technology.

Hong Kong’s Benefit of IP registration

Although the IP rights registered in Hong Kong cover in only Hong Kong, the process of registration is relatively simple comparing to that in other countries and vast supporting information are available for free (refer to “additional information” below).

However, Raymond says there is still hesitation among SMEs to register their IP. Take trademarks and patents for their business as example, SMEs often questions the foreseeable  benefit of registration since they need to renew their IP rights in the future, otherwise they lose the rights.

The awareness of IP protection is growing among Hong Kong SMEs. According to statistics from the IPD, there were a total of 12719 trademarks registered, 275 short-term patents granted and 1079 designs registered in 2016.

Raymond continued, the surge of registrations were in parallel with the rapid growth of online business that were created by start-ups majorly. These new companies having invented solutions or business models needed trademarks and patents to protect their rights and to fight for government support or angel investors.

Periods of Renewal

• Trademark is initially registered for 10 years, indefinitely renewable as long as it is renewed every 10 years.
• Standard patents can be renewed annually after the initial period of 3 years, up to a maximum of 20 years.
• Designs can be renewed for periods of every 5 years for a maximum of 25 years.

Hesitation of SMEs

Raymond added, businesses especially who go for e-commerce might need to register their IP globally in order to obtain protection outside Hong Kong, the sum of initial registration and ongoing maintenance are costly when they cannot predict their progress for the next decade. Otherwise, the value of your Hong Kong-only IP is not competitive enough.

Raymond pointed that SMEs and start-up were more likely to use their fund in operation other than IP registration.

HK government support

Raymond acknowledged that the Hong Kong government has been supportive of IP since Hong Kong has been famous for its ease of registration, transparency in government, generous support from IPD available online (refer to “additional information” below). He added that some of AsiaBC’s clients from overseas had successfully done trademarks and patents registration by themselves after they spent the necessary time to learn. He praised that Hong Kong offers high rate of approval and low cost in patents registration in the world.

If Hong Kong government could offer financial support to SMEs for IP registrations, it would definitely encourage them to start the registration and attract more business from overseas to setup their present in Hong Kong, concluded by Raymond.

Additional Information:

Free Intellectual Property Consultation Service by Intellectual Property Department

Free “Meet-the-Advisors” Business Advisory Service of SUCCESS by Trade and Industry Department

HKTDC SME Advisory Service

Intellectual Property Services Centre by Hong Kong Productivity Council

Intellectual Property Centre by Federation of Hong Kong Industries

IP Online Search (search trademarks, patents and designs) by Intellectual Property Department

“What is Intellectual Property?” – IDP open information

Download

Hong Kong Trade Development Council – World SME Services 1705 – p22-27