Enhancing Hong Kong

1
Enhancing Hong Kongs Innovation System Is
There a Role for IP Policy?
Poh-Kam Wong Professor, Business School LKY
School of Public Policy Director,
Entrepreneurship Centre National University of
Singapore
2
Scope of IP Policy

• Protecting and enforcing IP rights
• Raising awareness education
• Developing legislative framework enforcement
  institutions
• Promoting the creation of IP and facilitating
  their commercial exploitation and market
  transactions
• In addition to promotion of RD activities
• Supply stimulation, e.g.
• subsidies for patent application expenses
• using patent output as a performance measure of
  public RD institutions
• SBIR policy in the US mandating the allocation
  of certain of RD budget on exploring
  commercialization of IP
• Demand stimulation market transaction
  facilitation, e.g.
• incentivising SMEs to license-in exploit IP
• promoting the development of intermediary
  industries (IP professional services,
  entrepreneurial financing institutions)

3
Development of IPR Protection Policy

• Since 1997, HKSAR has developed a relatively
  comprehensive legal framework for protecting
  intellectual property rights (IPR), and is a
  party of all major international IP conventions
• In terms of institutional development, the IP
  Department of HKSAR (created in 1990) has also
  been relatively efficient in terms of creating IP
  awareness providing IP administrative
  infrastructure, while the Customs Excise Dept
  (CED) has stepped up IPR enforcement
• While the IPR environment of HKSAR has thus
  improved over the last 10 years, other economies
  like Korea, Singapore and Ireland have achieved
  even greater improvement based on a number of
  international benchmarking indices

4
Patent Rights Index, Economic Freedom of the
World Report
Note The index is based on five categories (1)
coverage (the subject matter that can be
patented) (2) duration (the length of
protection) (3) enforcement (the mechanisms for
enforcing patent rights) (4) membership in
international patent treaties and (5)
restrictions or limitations on the use of patent
rights. Source 1960-75, 75-90 -- W. G. Park,
Intellectual Property Patent Regimes,
Economic Freedom of the World 2001 Annual
Report, Chapter 4 2000 -- W.G. Park S. Wagh,
Index of patent rights, Economic Freedom of the
World 2002 Annual Report, Chapter 2
5
GCR IP Rights Protection Index, 2000-2008,
selected years
Notes In 2000, the Likert scale is 1 to 10.
Figures in bracket are re-scaled to the 1 to 7
range. In 2004, the index is measured
by responses to the following question
Intellectual property protection in your country
(1 is weak and non-existent, 7 is
equal to the worlds most stringent). 
The index in 2008 is measured by responses to the
following question Intellectual property
protection and anti-counterfeiting measures
in your country are (1 weak and not
enforced, 7 strong and enforced).  Source
Global Competitiveness Report, various years
6
Development of IP Creation Commercialization
Policies

• Relative lack of Strategic IP policy directions
  by the Innovation and Technology Commission (ITC)
• IP policy in the Public University sector by
  and large, relative autonomy by individual
  universities to pursue its own IP policies, with
  no central direction
• No policy to promote the development of IP
  professional services industry
• Policy to promote the development of industrial
  designs primarily limited to physical
  infrastructure
• Little policy emphasis on promoting the
  development of entrepreneurial financing for
  IP-based ventures since the dot-com crash

7
Comparing HKSAR vs. Singapore

• Compared to HKSAR, the Singapore government has
  greater policy emphasis on promoting IP creation
  commercialization
• Strategic visioning to become a regional IP
  creation commercialization hub
• Creation of Exploit Technologies (ETPL) to
  centralize IP management and commercialization
  for all public RD institutions funded by ASTAR
  
• New National Research Foundation (NRF) program
  has an explicit academic entrepreneurship
  promotion component targeted at IHLs
• Explicit investment talent attraction policy
  to promote IP professional services by EDB IP
  Academy created to promote manpower development
  for IP professional services industry

8
Did the more active IP Policy intervention by
Singapore matter?

• Comparative analysis of IP output pattern and
  performance trends of HKSAR vs. Singapore in
  recent years
• focus primarily on patents granted by USPTO
• distinguishing utility patents vs. design
  patents
• quantity as well as quality indicators
• compare differences before mid-1990s vs. after

9
Growth of Hong Kong and Singapore Patents,
1976-2007
Notes Where a patent is assigned to more than 1
country, it is allocated according to the country
of the first-named assignee Patents
by Hong Kong (Singapore) inventors include all
patents with at least one inventor who is a Hong
Kong (Singapore) resident Unassigned
patents are allocated to Hong Kong (Singapore)
assignees Source Database of the USPTO and NUS
Patent Database
10
Growth of Hong Kong and Singapore Utility
Patents, 1976-2006
Notes Where a patent is assigned to more than 1
country, it is allocated according to the country
of the first-named assignee Patents
by Hong Kong (Singapore) inventors include all
patents with at least one inventor who is a Hong
Kong (Singapore) resident Unassigned
patents are allocated to Hong Kong (Singapore)
assignees Source Database of the USPTO and NUS
Patent Database
11
Growth of Hong Kong-Invented Utility Patents vs
Singapore-Invented Utility Patents 1976-2006
12
Utility Patenting Propensity, Selected Economies,
1985-2005
13
Comparison of Hong Kong and Singapore Patents by
Patent Type, 1976-2006
Note Includes patents by at least one locally
resident inventor and patents with the
first-named assignee is locally listed
14
Breakdown of Patents by Hong Kong and Singapore
Inventors1 (Local vs Foreign Assignee)
(1976-2006, Percentage)
Notes 1Patents where at least one inventor is a
Hong Kong (Singapore) resident
Unassigned patents are included in individuals
Allocation of assignee is based on
first-named assignee University
patents include patents from companies formed to
commercialize university technology Source
Database of the U.S. Patent and Trademark Office
(USPTO) and NUS Patent Database
15
Citation Indices for Hong Kong and Singapore
Patents
Average Citations Received per Utility Patent by
Hong Kong and Singapore Inventors 1976-2006
Note Computed using citations up to 2006.
Because of truncation effect, more recent patents
tend to have lower forward citation counts due to
having less time to attract forward citations
Relative Citation Index, 1976-2005
16
Citation Indices for Hong Kong and Singapore
Patents (contd)
High Impact Index1, 1976-2005
1Top 5 most highly cited utility patents within
1-digit technology class
17
Herfindahl Index of Technological Concentration,
1976-2006
Notes Nationality of Patent is defined as having
at least one inventor resident in the specified
nation Herfindahl Index computed using
classifications at the IPC Section level, with 8
categories in total. Sources Computed from
Database of the U.S. Patent and Trademark Office
(USPTO) (various years) and the NUS Database of
US Patents
18
Comparison of Technology Class of Patents by
Hong Kong and Singapore Inventors, 1976-2006
Note Patents include those where at least 1
inventor is a Hong Kong/Singapore
resident Source Database of USPTO (various
years) and NUS Patents Database
19
Top 20 Organizations with Hong Kong Patents1
1Patents where at least one inventor is a
Singaporean. The first assignee company is used
to count patents which are assigned to more than
one company. 2Includes Vtech Communications Ltd,
Vtech Electronics Limited, VTech
Telecommunications Limited, Vtechsoft Holdings
Limited 3 includes Johnson Electric Engineering,
Ltd, Johnson Electric Industrial Manufactory.
4 includes North American Philips Corp., U.S.
Philips Corp. 5 includes STD Manufacturing Ltd.,
STD Plastic Industrial Ltd. 6 includes Timex
Group B.V. Source NUS Patents Database
20
Top 20 Organizations with Singapore Patents1
1Patents where at least one inventor is a
Singaporean. The first assignee company is used
to count patents which are assigned to more than
one company. 2Includes US Philips Corp 3A
company called Tri-tech Microelectronics was
granted a total of 56 patents before filing for
bankruptcy and entering liquidation in
1999. 4Includes ASM Technology Singapore Source
Database of the U.S. Patent and Trademark Office
(USPTO) (various years)
21
Trademarks Applications and Registrations with
USPTO
22
HKSAR vs. Singapore Overall Findings

• utility patenting in Singapore has grown faster
  overtaken HKSAR in quantity and quality in
  recent years
• universities and public RD institutions, as
  well as subsidiaries of global high tech MNCs
  make greater contributions in Singapore patenting
  vs. HKSAR
• higher level of technology specialization in
  high tech clusters targeted by government in the
  case of Singapore
• trade-mark registration and design patents also
  growing faster in Singapore, although HKSAR still
  leads

23
Role of IP policy in HKSAR Overall Recommendation

• A case can be made for a more strategic role of
  the government of HKSAR in formulating and
  implementing a coherent set of IP creation and
  commercialization policies to support the drive
  towards a more advanced innovation system.
• While recognizing that the role of IP varies
  significantly with the nature of technology
  fields and business sectors, there should be a
  high-level strategic overview by ITC to ensure
  that IP-related issues are taken into
  consideration in implementing sector-specific
  innovation strategies.
• The strategic review exercise may be able to
  identify some common IP issues that cut across
  technology and business sectors.

24
Recommendations I

• Promoting the development of HKSARs IP
  professional services industry
• to serve not just HKSAR, but also China in
  general and the Pearl River Delta (PRD) region in
  particular
• PRD (and China in general) will be significantly
  increasing its innovative activities in the
  future, and hence will represent major market
  growth potential for IP professional services
• HKSAR will risk being bypassed unless its IP
  professional services industry is upgraded, and
  develops greater domain expertise on China IP law
  
• Market opportunities for IP professional
  manpower development training opportunities
  for HKSAR universities/public institutions in
  addition to private sector firms?

25
Recommendation II

• Strengthening the role of the leading HKSAR
  universities as IP creators and commercialization
  facilitators
• giving the universities more funding resources
  for IP creation/commercialization activities
  (e.g. like Singapore NRFs innovation fund for
  universities)
• adaptation of US SBIR-like scheme to allocate
  proportionate resources to IP commercialization
  activities as a function of RD funding (e.g.
  mandating 5 additional funding for IP
  commercialization activities on top of public RD
  funding)
• using the universities IP management
  capabilities as a leverage to access Chinas
  much larger RD manpower base and potential
  sources for IP

26
Recommendations III

• Promoting the development of HKSAR as an
  industrial design industry hub
• Industrial design as a special form of IP
• HKSAR already has comparative advantage
  regional leadership in industrial design
  capabilities
• Potential for HKSAR to serve not just HKSAR
  companies, but also China and the Asia-Pacific
  region
• Potential for universities in HKSAR to play a
  greater educational role in industrial design,
  but need to go beyond technical training to
  encompass design IP management
  commercialization/business expertise