Wednesday, June 6, 2018

Malaysia as EPO Validation State?

EPO is approaching a number of countries to be validation states of EPO. Applicants for European patent can submit a request for obtaining and extending patents in validation states. The validation system is principally similar as designation system for contracting states of EPO.

Currently, there are four validation states namely Morocco, Moldova, Tunisia and Cambodia. MyIPO confirmed that EPO has proposed Malaysia as EPO validation state.

European patents are principally prosecuted by qualified European patent attorneys. Accepted European patent are extended to validation states by paying validation fees. The validation system can ease patent backlog faced by MyIPO.

I am of the view that the validation state system can be considered if it is tweaked to be a form of reciprocal cooperation arrangement.

I would appreciate if EPO allows Malaysians to qualify as European Patent Attorney and practice before the EPO. If European patent applicants and attorneys have direct access to Malaysia patent through validation system, EPO should provide the same access to Malaysian applicants and representatives. We can leverage on mutual cooperation to enhance local patent expertise and European market access.

Wednesday, May 30, 2018

With recipes, the key to making millions is not about the food

In 2017, the team from Sir Kensington’s made an estimated US$140 million (RM558 million) for their ketchup recipe when they sold it to Unilever.
The same year, Nathan Myhrvold, a technology expert-turned-experimental chef, released the five-volume Modernist Bread (Cooking Lab, US$560), co-authored by Francisco Migoya. It’s Myhrvold’s latest juggernaut; he co-authored the best-selling Modernist Cuisine: The Art and Science of Cooking (Cooking Lab, US$625) in 2011. Before that, he was the chief technology officer at Microsoft.
That was a good year for big-ticket food projects. But it came when recipes are being continually devalued as they flood the internet, free of charge. Social media has made it ever easier for people to copy the dishes of others. It makes me wonder: How can someone monetise a recipe?
Myhrvold, who is starting work on his next opus, Modernist Pizza, has strong feelings about recipe ownership and the money it represents. If music and poetry can be copyrighted and monetised, he thinks singular recipes should be, too.
“There is certainly a comparison between recipes and computer code,” he tells me over the phone. “A recipe for a distinctive product is like code, which is protected by copyright.”
There’s one problem: In the US, most recipes aren’t legally protected by copyright. That’s because they essentially contain only ingredient names and proportions.
“Copyright law does not protect merely utilitarian articles, ideas, facts, or formulas. Since food is a useful article, copyright law will apply only if the food incorporates highly creative features that are separable (either physically or conceptually) from the food’s utilitarian features,” says Natasha Reed, copyright expert at New York’s Foley Hoag LLP law firm, at Fine Dining Lovers.
Abroad, it’s generally not much different: “Such an instruction is neither original nor individual and does not qualify as a work of art,” explains Martin Berger of the Swedish Patent and Registration Office.
So is there a case for the monetising of recipes? Myhrvold draws analogies from his former technology job — and decries the blatant plagiarising of dishes.
Recipes as computer code
Myhrvold tells the story of putting fonts into the Windows programme when he was at Microsoft decades ago.
“There are thousands of different font designs. They are a collection of numbers that plot the design. According to a court ruling, they’re not protected, though the font names are,” says Myhrvold. “The coordinates of the points, which you’d put into a computer programme like proportions in a recipe, are not protected. It’s messed up, but it’s the law.” 
Similarly, consider the Cronut. The technique and recipe for frying up a donut with croissant-like layers aren’t protected, but pastry chef Dominique Ansel did trademark the name and has aggressively pursued knockoffs. Pepperidge Farm took Trader Joe’s to court over alleged infringement of its Milano cookies. And Magnolia Bakery, famous for its cupcakes, was able to trademark the jaunty swirl of its frosting.
Trademarks, though, are about protecting a brand, not actively bringing in money (unless you consider litigation and damages an active revenue source). Myhrvold points to patents as a potential way to monetise a recipe — although, for most chefs, that’s impractical. Patenting a recipe costs thousands of dollars, and it must qualify as unique and useful. For example, tofu has a lot of patents because the process of coagulating it is unusual. There are also many yogurt patents. “If you’re Chobani, you want to protect your formulations,” he says. 
“If I say, ‘I’m going to patent my carrot cake recipe, and it’s special because I add mace and red pepper’, it’s unlikely to get that patent,” says Myhrvold. “It’s in the realm of what cooks do. But a novel chemical compound that no one’s used before, or in this way — you could get a patent.”
In other words, chefs are powerless when it comes to protecting their creations, says Myhrvold.
He points to a case a dozen years back, when an Australian cook worked around the world in top kitchens. He then opened a restaurant in Melbourne, where he served exact replicas of such dishes as Wylie Dufresne’s “shrimp noodles”. The food world erupted, but there was no legal recourse: The dishes weren’t copyrighted.
As Exhibit A for what happens when you can’t copyright recipes, Myhrvold cites Jean-Georges Vongerichten’s legendary molten chocolate cake, first made in 1986 by accident and now served around the world. (While making individual chocolate cakes for a party of 500, Vongerichten neglected to check the oven settings. He thought the mistake had ruined his restaurant; instead he got a standing ovation.)
“Jean-Georges’s recipe dominated because it redefined chocolate cakes, and all you have to do is under-bake it. If he had [been able to copyright] that recipe, and got a nickel for every 100 of those served, he would own all the buildings where his restaurants are,” says Myhrvold.
Multimillion-dollar recipes
The key to raking in millions on a recipe, I come to realise, is that it’s invariably not about the recipe.
“From the beginning, we password-protected our original recipes in text files,” says Sir Kensington’s Scott Norton, who started making ketchup with Mark Ramadan as a college project. “We absolutely saw them as our own, original work.”
Still, he admits, “Had we not started the company and proved the value in them, no one would have come along, looked at the recipes alone, and seen them as anything of tremendous value without traction in the market. Sir Kensington’s team and reputation has brought us to where we are far more than our ever-evolving recipes have.”
Take Singapore’s US$3-a-plate chicken-and-rice dish that has been valued at US$2 million. Liao Fan Hong Kong Soya Sauce Chicken Rice & Noodle has a Michelin star, but the true value of its renowned recipe is more than what’s in hawker Chan Hon Meng’s head.
“A street hawker recipe is dependent on the reputation it comes with, not just the sauce and techniques,” says KF Seetoh, an Asian-food tour expert who has taken Anthony Bourdain through Singapore’s markets. “Although many look simple, there are many little touches an iconic hawker puts in their dishes that more than meets the eye. It’s techniques, not just recipes, like mass production methodology in a tiny kitchen.”
Seetoh estimates that hawkers recipes can command from US$250,000 to many millions, provided they can carry the popular lustre to whomever might buy it. The most expensive hawker recipe known today in Singapore is Kay Lee Roast Meats, whose honey pork and roast duck recipes sold for more than US$5 million. “A few hundred portions a day at a humble US$4 to US$6 price, in a low-rent space with minimum manpower, is very sexy for investors,” Seetoh says. — Bloomberg

Saturday, April 7, 2018

Solar Panels: Technological Innovation Prompts Profound Shifts

Technological innovation – as the main form of intangible capital – is prompting profound shifts in the global manufacturing value chain for photovoltaic (PV) solar panels, which are increasingly found worldwide.

Solar panels have moved from highly specialized products to low-cost commodities, putting pressure on producers. Between 2008 and 2015 prices fell by an estimated 80 percent. In particular, companies have reduced production costs by investing in more powerful production equipment, realizing efficiencies through complementary process innovations and achieving large scale production.

Chinese manufacturers have progressively increased their market share, putting many traditional PV manufacturers in the U.S., Europe and elsewhere, as well as some firms within China, under competitive pressure, resulting in bankruptcies and acquisitions.

The WIPR 2017 shows that overall patent filings in the photovoltaic sector have declined since 2011.  In the U.S., Europe and Japan – the traditional sources of innovation in the sector – the decline has been sharp, due to the exit of many firms. However, the surviving firms in these areas have stepped up their investments in research and development (R&D) to develop new PV technologies.

In China, patenting has continued to grow in the sector, including from new firms that have entered the sector. Yet, the proportion of Chinese solar panel patent applications filed in other countries remains below 2 percent.

Many companies are seeking growth in local service markets – such as the installation of solar panels in private homes. In such consumer markets, company and product branding are key intangible assets that help attract consumers and project finance.

Coffee: New Consumer Preferences Driving Value

Technology plays a key role in the transformation of a coffee bean into a cup of brew. The WIPR 2017 maps patent data in the sector, finding that innovation across the supply chain increases in activities closer to consumers. This includes the processing of beans and the final distribution of coffee products, such as the coffee capsules found in many homes and offices.

Brand reputation and image allow firms to differentiate their offering from those of their rivals and play an important role in all coffee market segments, including soluble and roasted coffee sold in grocery stores, as well as espresso-based coffee products sold in retail coffeehouses.

Shifting consumer preferences have progressively transformed the global coffee value chain, moving from consumption in the home, then in coffeehouses and now to a new generation of discerning consumers who are interested in their coffee product’s back story, willing to pay premium prices.
Prices commanded in this so-called “third wave” market segment can exceed those in “first wave” consumption by more than four times, with coffee farmers’ incomes tripling. While still small in size, this fast-growing market segment offers new opportunities for greater participation in the global value chain by developing economies. In particular, information on the origin and variety of the coffee beans, how they were farmed and processed, and farmers’ compensation become integral to selling coffee.

Responding to the shifting consumer preferences, coffee growers and even countries are investing in efforts to move beyond generic coffee, adopting their own branding strategies.

Smartphones: Substantial Returns Driven by Intangible Capital


Apple and Samsung dominate the market for high-end phones that cost more than USD 400, with market shares of 57 percent and 25 percent, respectively. In this segment, crucial intangible assets include technology, the design of hardware and software, and branding. The WIPR 2017 finds that for every iPhone 7 that Apple sells for approximately USD 810, about 42 percent of the sales price is captured by Apple – a proxy for the high returns from intangible capital in the industry. Huawei and Samsung also capture significant value in their top-end smartphone models, despite their lower consumer prices and sales volume.

The WIPR 2017 also finds that component makers - like Corning Inc., the producer of iPhone Gorilla Glass – and technology providers including Nokia Corp. and Qualcomm Inc., use intangible assets to capture substantial value.

Smartphone firms and technology providers rely heavily on patents, trademarks and industrial designs, generating a high return on their intangible capital. Indeed, in the domain of patents, up to 35 percent of all first filings worldwide may relate to smartphones. The report finds that the 4th-generation (4G) cellular standard used today is associated with close to four times more patents than the 2nd-generation standard.

Another particularly fast growing area of filing activity concerns graphical user interfaces (GUIs), such as icons for mobile apps. For example, Apple filed 222 designs on GUIs at the European Union Intellectual Property Office between 2009 and 2014, while Samsung filed 379.

30% Value of Manufactured Goods comes from Intellectual Capital

According to World Intellectual Property Report 2017, 30% value of manufactured products sold around the world comes from intellectual capital, such as branding, design and technology.

An amount of USD 5.9 trillion in 2014, shows that intangible capital contributes twice as much as buildings, machinery and other forms of tangible capital to the total value of manufactured goods.

"Intangible capital will increasingly determine the fate and fortune of firms in today’s global value chains. It is behind the look, feel, functionality and general appeal of the products we buy and it determines success in the marketplace," said WIPO Director General Francis Gurry. "Intellectual property, in turn, is the means by which companies secure the competitive advantage flowing from their intangible capital."

Three product groups - food products, motor vehicles and textiles, account for close to 50% of total income generated by intangible capital in the manufacturing global value chains.

Thursday, February 22, 2018

CPTPP as of 21 Feb 2018

The legally verified text of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was released on 21 Feb 2018 by New Zealand government (https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/cptpp/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-text/)

According to Chapter 18 Intellectual Property of the agreement:
- introduction of sound marks
- patent term adjustment (to compensate the patent owner) for unreasonable curtailment (of pharmaceutical product as a result of marketing approval process)
- biologics (protection of data)
- watch system for pharmaceutical patent owner
- copyright term adjustment to life of author plus 70 years after death or 70 years (certain works)
- border measures to suspend suspected counterfeit goods
- Malaysia must accede  Madrid Protocol, Budapest Treaty, Singapore Treaty, and UPOV