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Global Intellectual Property Index 5th report
Contents About the index................................................................................................................ 2 Background to GIPI5....................................................................................................... 5 The GIPI5 results...............................................................................................................7 Analysis and commentary: general.................................................................................11 Trade mark index ............................................................................................................ 17 Patents............................................................................................................................ 35 Copyright index............................................................................................................... 51 Design index.................................................................................................................... 69 Personal data................................................................................................................... 81 Appendix......................................................................................................................... 90 About us.......................................................................................................................... 92
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About the index
About the index The Global Intellectual Property Index (GIPI) provides a comprehensive assessment of how the intellectual property (IP) regimes of 43 important jurisdictions compare with each other. The European Union is treated as an additional jurisdiction in relation to IP rights that have been harmonised, i.e. trade marks and designs. Each IP right (patents, trade marks, designs and copyright) is assessed as regards obtaining, exploiting, enforcing and attacking it. Each data protection regime is measured against the criteria of fairness, enforcement, compliance, administrative burden and disruption, each of which is explained more fully in that section. This is our fifth GIPI report (GIPI5). The results are the statistical output from a worldwide survey of IP owners and users giving over 8,500 assessments, as weighted bearing in mind data from 61 objective sources (or ‘instrumental factors’). The latter includes published empirical data, such as the number of patent or trade mark filings and grants, the value of royalty fee payments, R&D expenditure and the origin of counterfeits as seized by customs.
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For details about survey respondent numbers, see Appendix A on page 90. For details about the instrumental factors, see Appendix B which is only available online at www.taylorwessing.com/ipindex.
The first report (GIPI1) was issued in May 2008. It covered 22 jurisdictions and just trade marks, copyright and patents. GIPI2 was released in May 2009 and included two further jurisdictions and two further IP rights (designs and domain names). GIPI3 was issued in 2011, covering the same 24 jurisdictions. It introduced a data protection index to replace the domains name (one which saw little change). GIPI4, issued in November 2013, covered the same IP rights and added in a further 12 countries. The results and our analysis were also made available online using an interactive map at www. taylorwessing.com/ipindex.
About the index This fifth report (GIPI5) addresses the same five topics but adds seven new countries: Colombia, Egypt, Malaysia, Nigeria, Norway, Taiwan and Vietnam. Previous editions of GIPI have been cited by government ministers in support of their policies on IP. They have also been relied on by parliamentarians in their debates on reforms to their IP laws. We very much welcome and are grateful to hear this. Our purpose in compiling and publishing GIPI is to facilitate an informed debate leading to improvements in the regimes. It is not just about who comes ‘top’ or ‘bottom’. In particular, any jurisdiction scoring or ranked highly will never be without criticism from respondents or the potential for improvement. The creations, products, services, inventions and business models that IPR seek to protect and regulate are evolving and being disseminated at ever faster speeds. It is, therefore, crucial that all IP regimes are reviewed and updated on a constant basis. Those that are not will, in time, lag behind in GIPI. More importantly, they will be hampering the innovation, entrepreneurialism and competitiveness of their domestic businesses and discouraging inward investment into their countries. We welcome comments, questions and feedback. Please send it to our editor, London IP partner Roland Mallinson, at
[email protected].
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Background to GIPI5
Background to GIPI5
Background to GIPI5 GIPI5 is published at a time of increasing recognition of the ever growing value and role that IP has to play in our economies. A report published by the OECD at around the time of our GIPI4 report (2013) noted that “between 2001 and 2011, young firms whose assets were largely intangible (intangible asset intensive firms) generated 47% of all new jobs in [OECD] countries.” It added that: “in such countries as Sweden, the United Kingdom, and the United States, investments in them have overtaken those in tangible assets.” Importantly, IP is now less blatantly a tool of rich nations to oppress poorer nations, with the imposition of the former’s laws on the latter so as to stem flows of counterfeits and pirated goods. Instead, having an effective and credible IP regime is increasingly recognised as a stimulus for home-grown innovation and investment. One only needs to consider the huge number of IP disputes handled by the Chinese courts (the vast majority not involving foreigners) to see how the importance of IP rights has sunk in there.
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Background to GIPI5
This trend is reflected within the question asked in this and previous GIPI surveys concerning the time and cost respondents are spending on IP. As before, the majority of respondents confirm that they are spending more time and money on IP. The percentage investing more time has increased from 60% in GIPI4 to 67% in GIPI5. Again, the numbers are up on costs. This time more than half, 53%, say they are spending more costs on IP than previously. This is up from 46% in GIPI4.
With many economies tentatively recovering from a long-running recession and growth waning in some of the boom emerging markets, it is encouraging to see this investment in IP. The growth industries of today seem to be intrinsically linked to those that are IP-rich and IP-intensive, such as new technologies, highend design and media content. Those countries that deliver a well-functioning, efficient, fair, predictable and transparent IP regime are likely to be those that will benefit most from this investment and the dividends coming from it.
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0 7
27
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56 How has the time that your organisation spends dealing with intellectual property changed over the last three years?
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89
How has the cost that your organisation spends dealing with intellectual property changed over the last three years?
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Decreased greatly Decreased slightly Remained same Increased slightly Increased greatly
Decreased greatly Decreased slightly Remained same Increased slightly Increased greatly
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The GIPI5 results
The GIPI5 results The table on page 8 shows the overall ranking and those for each of the separate IP rights. As previously, the overall ranks are grouped in tiers to reflect groupings separated by relatively marginal changes in score (with a potential maximum of 1000 such that five points amounts to a variance of 0.5%). The European Community is only ranked for the two fully harmonised rights of trade marks and designs. Headline points: uu
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The Netherlands has taken top position, closely followed by two former “winners” in Germany (GIPI3) and the UK (GIPI1, GIPI2 and GIPI4). The tier 1 cluster is smaller this time, with just those three, with two of them, Germany and the Netherlands, occupying a top three position in all but the data protection index. With the exception of Slovakia, EU Member States are all tier 3 or above. The USA has taken a big fall to the bottom half of the table and into tier 4 (having previously been in tier 2 in GIPI4 and tier 1 in each of GIPI1, 2 and 3). The data protection index bears little correlation to the others since it is measured against different criteria. A high ranking indicates a relatively relaxed or non-existent regulatory regime for businesses to comply with.
The table on page 9 shows the changes to the overall rankings and scores from those in GIPI4. The report analysis refers to gains or drops in “effective place”. This seeks to ignore the impact of new joiners to GIPI in positions above those being discussed. The table on page 10 shows the jurisdictions listed in rank order for each IP regime. The most notable rankings are: uu
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USA at 15th for trade marks, 17th for copyright and 42nd for designs; and Russia defies the apparent reversal of the table for data protection by taking bottom place in that as well as being lowly placed in the other sub-indices.
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The GIPI5 results
All GIPI5 IP ranking by jurisdiction Tier
Country
1
Netherlands Germany United Kingdom Canada Sweden Norway New Zealand Australia Singapore Austria Ireland France Switzerland Japan Czech Republic Malaysia Spain Israel Hungary South Korea Italy Poland South Africa Chile USA Slovakia Turkey Thailand Mexico Colombia Indonesia Russia UAE Argentina Brazil Vietnam Saudi Arabia Ukraine China India Taiwan Egypt Nigeria European Community
2
3
4
5
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Rank
Rating
Trade mark rank
Patent rank
Copyright rank
Design rank
Data protection rank
1
43
648 646 643 637 636 635 634 632 630 629 626 623 619 618 615 615 611 609 608 608 606 606 601 597 597 584 581 579 575 572 572 572 569 567 566 566 564 564 561 560 559 553 530
3 2 1 7 5 6 9 4 8 13 14 10 12 15 17 19 18 19 22 16 19 24 25 26 11 30 32 30 28 37 34 27 34 38 39 40 34 41 29 33 23 42 43
1 2 4 3 6 7 9 12 5 11 8 15 18 10 16 13 22 13 22 18 20 24 25 21 17 30 36 28 32 34 31 38 26 33 29 39 27 40 35 37 43 41 42
–
–
–
2 3 13 8 4 6 18 12 17 5 10 7 11 14 20 22 8 26 16 19 15 21 24 30 42 23 27 32 33 38 35 25 40 28 31 34 41 37 29 36 44 39 43 1
37 41 24 14 32 30 13 23 12 39 34 42 35 27 17 2 31 20 25 38 40 21 3 6 10 28 18 5 16 7 4 43 11 36 29 8 21 25 33 14 1 19 9
–
2 1 3 10 8 6 5 8 13 7 12 11 14 19 18 25 19 16 22 21 17 22 28 24 15 27 29 34 33 31 40 30 38 36 39 35 37 32 43 42 26 41 44 4
2 3 4 5 6 7 8 9 10 11 12 13 14 15 15 17 18 19 19 21 21 23 24 24 26 27 28 29 30 30 30 33 34 35 35 37 37 39 40 41 42
–
The GIPI5 results
Rankings and ratings compared with GIPI4 Country Netherlands Germany United Kingdom Canada Sweden Norway New Zealand Australia Singapore Austria Ireland France Switzerland Japan Malaysia Czech Republic Spain Israel Hungary South Korea Italy Poland South Africa USA Chile Slovakia Turkey Thailand Mexico Russia Colombia Indonesia UAE Argentina Brazil Vietnam Saudi Arabia Ukraine China India Taiwan Egypt Nigeria
GIPI 5 rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 15 17 18 19 19 21 21 23 24 24 26 27 28 29 30 30 30 33 34 35 35 37 37 39 40 41 42 43
GIPI 5 rating 648 646 643 637 636 635 634 632 630 629 626 623 619 618 615 615 611 609 608 608 606 606 601 597 597 584 581 579 575 572 572 572 569 567 566 566 564 564 561 560 559 553 530
GIPI 4 rank 3 2 1 11 4 – 6 5 12 8 12 8 6 15 – 16 14 20 17 18 21 19 25 10 23 22 25 28 30 29 – 34 24 32 31 – 25 32 35 36 – – –
GIPI 4 rating 655 656 657 638 653 – 643 652 637 642 637 642 643 628 – 624 632 615 622 620 613 619 591 639 606 609 591 589 586 588 – 572 598 578 581 – 591 578 567 565 – – –
Change in rank +2 0 -2 +7 -1 – -1 -3 +3 -2 +1 -4 -7 +1 – +1 -3 +2 -2 -1 0 -2 +2 -14 -1 -4 -2 0 +1 -1 – +4 -9 -2 -4 – -12 -5 -4 -4 – – –
Change in rating -7 -10 -14 -1 -17 – -9 -20 -7 -13 -11 -19 -24 -10 – -9 -21 -6 -14 -12 -7 -13 10 -42 -9 -25 -10 -10 -11 -16 – 0 -29 -11 -15 – -27 -14 -6 -5 – – –
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The GIPI5 results
Five types of GIPI5 IP right by ranking* Overall rank Netherlands Germany United Kingdom Canada Sweden Norway New Zealand Australia Singapore Austria Ireland France Switzerland Japan Czech Republic Malaysia Spain Israel Hungary South Korea Italy Poland South Africa Chile USA Slovakia Turkey Thailand Mexico Colombia Indonesia Russia UAE Argentina Brazil Vietnam Saudi Arabia Ukraine China India Taiwan Egypt Nigeria
Trade mark rank Germany Netherlands United Kingdom European Community New Zealand Norway Austria Sweden Australia Canada France Ireland Singapore Switzerland USA Israel Italy Czech Republic Japan Spain South Korea Hungary Poland Chile Malaysia Taiwan Slovakia South Africa Turkey Russia Colombia Ukraine Mexico Thailand Vietnam Argentina Saudi Arabia UAE Brazil Indonesia Egypt India China Nigeria
Patent rank United Kingdom Germany Netherlands Australia Sweden Norway Canada Singapore New Zealand France USA Switzerland Austria Ireland Japan South Korea Czech Republic Spain Malaysia Israel Italy Hungary Taiwan Poland South Africa Chile Russia Mexico China Slovakia Thailand Turkey India Indonesia UAE Saudi Arabia Colombia Argentina Brazil Vietnam Ukraine Egypt Nigeria
* This table shows each IP right ranked from top to bottom.
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Copyright rank Netherlands Germany Canada United Kingdom Singapore Sweden Norway Ireland New Zealand Japan Austria Australia Malaysia Israel France Czech Republic USA Switzerland South Korea Italy Chile Spain Hungary Poland South Africa UAE Saudi Arabia Thailand Brazil Slovakia Indonesia Mexico Argentina Colombia China Turkey India Russia Vietnam Ukraine Egypt Nigeria Taiwan
Design rank European Community Netherlands Germany Sweden Austria Norway France Canada Spain Ireland Switzerland Australia United Kingdom Japan Italy Hungary Singapore New Zealand South Korea Czech Republic Poland Malaysia Slovakia South Africa Russia Israel Turkey Argentina China Chile Brazil Thailand Mexico Vietnam Indonesia India Ukraine Colombia Egypt UAE Saudi Arabia USA Nigeria Taiwan
Data protection rank Taiwan Malaysia South Africa Indonesia Thailand Chile Colombia Vietnam Nigeria USA UAE Singapore New Zealand Canada India Mexico Czech Republic Turkey Egypt Israel Poland Saudi Arabia Australia United Kingdom Hungary Ukraine Japan Slovakia Brazil Norway Spain Sweden China Ireland Switzerland Argentina Netherlands South Korea Austria Italy Germany France Russia
Analysis and commentary
Analysis and commentary: general Having invited respondents in previous GIPI surveys to volunteer in free text what factors had influenced their scoring, the redesigned GIPI5 survey identified 17 factors for their selection. These were based on the replies in previous GIPIs and are on page 12. More than one factor could be cited in support of a score for each of obtaining, exploiting, enforcing and challenging each of the main four IP rights. The chart on page 12 show which were cited most frequently.
Returning to the cited factors, cost has less of a bearing on the patent scoring. Instead, the specialisation and competence of the judges and access to good advice are considered more important. Otherwise, speed of decisions or procedures and predictability are matters that drive the scoring. The free text commentary of respondents consistently backs this up. Even burdensome bureaucracy seems to be considered of lower priority than these four primary factors.
From this it can be seen that overall cost, on average, proved the key deciding factor, whether a lower cost justifying a higher score or vice versa. Given that the trend is for IP spending to increase, this emphasis on cost reduction is unsurprising. Overall, cost alone is notably distinct from notions of cost-effectiveness. We asked respondents to rate the regimes in this way in respect of the enforcement of the relevant IP right. The results of cost-effectiveness are shown in the two tables on page 13 and 14 (note that there were statistically insufficient responses for seven jurisdictions in relation to patent enforcement). The results have Germany and the Netherlands monopolising the top positions. They are consistently perceived as being cost-effective jurisdictions for enforcing IP rights. Until the Unitary Patent regime commences, the European Community as a whole is not seen as cost-effective for patent enforcement. Neither is the USA for any IP right.
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Analysis and commentary
Influencing factors Trade marks %
Patent %
Copyright %
Designs %
Average %
A B C D E F G H I J K L M N O P Q 5
10
15
20
5
10
15
20
5
15
20
5
10
15
20
5
10
A Overall costs
J Signatory to relevant international treaties
B Competence, reputation and specialisation of judges
K Presence or absence of burdensome procedure/ bureaucracy
C Availability of competent professionals advisors D Speed of procedures/decisions E Consistency, reliability and ease of predicting decisions F Strength of court remedies, including amounts of damages awarded and availability of interim/preliminary injunctions
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10
15
L Ability or inability to attack rights through cheaper/quicker registries rather than courts M Judgments/decisions influential in other countries N Renewal costs and ease of renewal
G Adequate or insufficient body of clear IP law
O Openness to alternative dispute resolution/mediation
H Ability or inability to recover costs from losing opponent
P Availability of finance/venture capital
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Q Attractiveness of tax regime for IP rights
Extent to which you can control timetables
20
Analysis and commentary
Cost effectiveness of enforcement in rank order for each IP right 1 2 3 4 5 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44
Trade marks Germany European Community Netherlands Austria Norway France New Zealand Canada Sweden Ireland Poland Italy Czech Republic United Kingdom Hungary Chile Israel Australia Turkey Spain Mexico South Korea Ukraine Singapore Switzerland Nigeria Thailand Japan Taiwan Russia Colombia Malaysia South Africa Slovakia China Vietnam Argentina Indonesia India Egypt Brazil USA UAE Saudi Arabia
Patents Germany Netherlands Sweden Austria France Hungary United Kingdom Czech Republic New Zealand Singapore Spain Poland Switzerland Australia Canada Slovakia South Korea Japan Russia European Community Ukraine Ireland UAE Israel China USA Chile Turkey Italy Saudi Arabia Thailand South Africa Argentina Indonesia Mexico Brazil India
Copyright Netherlands Germany Sweden Canada Norway Singapore Ireland Israel Austria Spain United Kingdom Italy Hungary Japan New Zealand Malaysia Czech Republic Poland Australia South Korea South Africa France Chile Argentina Saudi Arabia Thailand Brazil Switzerland Slovakia Indonesia Vietnam Colombia Ukraine Nigeria Mexico Turkey UAE Egypt India Russia China USA Taiwan
Designs Netherlands Germany Austria European Community Norway Spain Canada Ireland Sweden Australia Singapore Switzerland South Korea New Zealand France Malaysia Hungary Japan Czech Republic Poland Slovakia Italy Israel South Africa Chile United Kingdom Russia Turkey Mexico Vietnam China Thailand Argentina Brazil Indonesia Ukraine Colombia Egypt India UAE Saudi Arabia Nigeria USA Taiwan
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Analysis and commentary
Cost effectiveness of enforcement in alphabetical order of jurisdiction for each IP right Country Argentina Australia Austria Brazil Canada Chile China Colombia Czech Republic Egypt European Community France Germany Hungary India Indonesia Ireland Israel Italy Japan Malaysia Mexico Netherlands New Zealand Nigeria Norway Poland Russia Saudi Arabia Singapore Slovakia South Africa South Korea Spain Sweden Switzerland Taiwan Thailand Turkey Ukraine UAE United Kingdom USA Vietnam
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Trade mark
Patent
Copyright
Design
37 18 4 41 8 16 35 29 12 40 2 5 1 15 39 38 10 17 12 28 32 21 3 7 26 5 10 29 44 24 34 32 22 20 9 24 29 27 18 23 43 14 42 36
33 14 4 36 15 27 25 – 8 – 20 5 1 6 37 33 22 24 29 18 – 35 2 9 – – 12 19 30 10 16 32 17 11 3 12 – 31 27 20 22 7 25 –
24 19 9 27 4 23 41 32 17 38 – 22 2 13 39 30 7 8 12 14 16 35 1 15 34 4 17 40 25 6 29 19 19 10 3 28 43 25 36 32 37 11 42 31
33 10 3 33 7 25 31 37 19 38 4 15 2 17 39 35 8 22 22 18 16 29 1 14 42 5 20 27 41 10 20 24 12 5 9 12 44 32 28 36 40 26 43 29
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The Unitary Patent was identified most frequently as the single most important IP issue for now. On the brand and copyright side, the traditional headaches of counterfeiting and piracy remain of fundamental concern. A number of respondents also focused on the consolidation of retail stores and/ or the greater emphasis on online and digital sales and promotion, with the concern that the laws and the IP regimes could be left behind as technology develops more rapidly. Data protection and security is also high on the agenda, seemingly prompted by the Edward Snowden revelations (the disclosure of the files of Panamanian law firm, Mossack Fonseca, occurred after the GIPI5 survey closed but it just served to put an even bigger spotlight on the issue of data security). The jurisdictions mentioned most frequently for growth were China and Japan, with India, the USA, Brazil, Vietnam and South East Asia also getting frequent mentions. Germany, the UK and the EU generally received some but less responses and the Middle East and Africa were mentioned occasionally.
Analysis and commentary
We also invited respondents to identify the single most important IP issue they face, which countries they see as the key growth markets over the next five years and their own perceptions in IP trends. The responses are enlightening.
In GIPI4, we took some specific looks at the progress of the then proposed Unitary Patent system, the reform of the EU trade mark system, the impact of 3D printing, the launch of various new gTLDs, the EC draft data protection reforms and the overhaul of various copyright regimes. In the detailed analysis on each of the IP rights that follows, we again take a close look at these or more current issues. Our views may have evolved and not all of our predictions have been fulfilled. Consistent with the underlying purpose of these GIPI reports, we remain willing to volunteer our insights and report on those of our respondents in the knowledge that nothing here is truly empirical and much may be imperfect. However, we hope that such objectivity as can be achieved here can help encourage concrete reforms and genuine progress in the functioning of the world’s IP regimes.
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Trade mark index
Trade mark index
Trade mark index Initial observations With two exceptions, every jurisdiction in the top half of the table saw their scores fall between GIPI4 and GIPI5. The exceptions were Italy and the European Community (which, because of the extent of harmonisation, can legitimately have a score for trade marks). The bottom four in GIPI4 conversely saw their scores rise. As a result, the range of scores has narrowed from 217 in GIPI4 to 142 in GIPI5. This continues a trend from before. Despite the harmonisation mentioned, there remains a material score difference between the top and bottom ranked EU Member States. In GIPI4 it was 93 (between the UK and Italy) and in GIPI5 it is 83 (between Germany and Slovakia) but at least it has narrowed. It was 214 points in GIPI1. All EU Member States (except Italy) saw their scores fall by about 5%.
More specific observations include: uu
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Norway joins the table in 6th place but the other new joiners (Malaysia, Taiwan, Vietnam, Egypt and Nigeria) all joined in the bottom half (with Nigeria at the bottom). Whilst its score is up only a little, Italy moves up seven effective places (ignoring new joiners). Austria gains six effective places with a slight drop in its score. Russia and Ukraine are also up six effective places but they saw improvements in their scores of approximately 5%, as did China. The UAE drops down seven effective places, Saudi Arabia five and Australia, USA, Spain and Poland each drop four effective places.
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Trade mark index
Trade mark ranking Country 1 2 =3 =3 5 6 7 =8 =8 10 11 12 13 14 15 16 17 18 =19 =19 21 =22
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Germany Netherlands United Kingdom European Community New Zealand Norway Austria Australia Sweden Canada France Ireland Singapore Switzerland USA Israel Italy Czech Republic Japan Spain South Korea Hungary
GIPI 5 rating
Difference in GIPI4 ranking
699 694 692 692 691 689 684 683 683 681 679 674 670 667 664 659 656 655 653 653 649 648
+1 +3 -2 +17 -1 +5 -5 -2 -3 -2 -4 0 -4 -5 +3 +6 -2 -4 -5 0 -4
Country =22 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44
Poland Chile Malaysia Taiwan Slovakia South Africa Turkey Russia Colombia Ukraine Mexico Thailand Vietnam Argentina Saudi Arabia UAE Brazil Indonesia Egypt India China Nigeria
GIPI 5 rating
Difference in GIPI4 ranking
648 641 632 623 616 615 614 613 612 611 607 606 594 593 590 586 581 577 576 567 562 557
-5 0 -5 -3 +1 +3 +2 -4 -7 -5 -10 -12 -7 -5 -6 -6 -
Trade mark index
Analysis The top 5 With only eight points separating the top five, the differences between them are fairly marginal. The rankings reflect, if anything, which jurisdiction lost the most number of points in the overall slide down of scores for the top half of the table. Although losing 35 points since GIPI4, Germany reclaimed the 1st place for trade marks that it had held in GIPI3. It also lost points in all the sub-indices except for challenging trade marks but it still comes top for enforcement of registered marks, cost-effectiveness of enforcement and challenging trade marks. Factors raising its scores were overall cost efficiency and the competence of its judges. Most reform derives from changes in EU law and practice and the new amendments to the Trade Mark Directive will be implemented between now a subsequent GIPI. Its courts are quick to reflect new EU practice. An example of this was a recent Federal Supreme Court decision departing from prior case law, but following the new EUIPO examination guidelines, to hold that a black and white trade mark is not identical to the corresponding colour trade mark, as long as the colour is not negligible. One respondent summarised the views of many:
“In Germany the Patent and Trade Mark Office is very strict when examining the protectability of a mark, which is often tedious. But once the mark is registered, procedures are efficient and costeffective.” The Netherlands also lost points but gained three places to take 2nd place. It lost most points for obtaining a trade mark (-46 points), which applies equally to Belgium and Luxembourg since they are covered by a Benelux trade mark. Obtaining a Benelux trade mark can be done online, is fast and relatively cheap but the Benelux IP office is known for its strict examination on absolute grounds of refusal. The Netherlands lost even more points (-64) for the enforcement of unregistered trade marks. Such enforcement is still very rare. It is available only for the most famous brands.
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Trade mark index
The UK is now 3rd, and ranked on a par with the European Union as a whole. Its most significant change was a fall of six places for cost-effectiveness of enforcing trade marks. It is now 14th for that but has retained its 1st place for exploitation. The latter is somewhat surprising given the response from trade mark proprietors generally to the UK’s new law imposing plain packaging for tobacco products, passed in March 2015. This is similar to the Australian law of 2012. The English High court recently endorsed the legality of this legislation, having been challenged by the tobacco companies. See box on page 32 for more details. There were also falls for enforcing registered rights (-43 points) and unregistered rights (-105 points). The latter reflects the frustration some express at the limitations of the UK’s passing off law to stop lookalikes. The former is less explicable given some positive developments in trade mark enforcement. In particular, the courts have extended ISP website-blocking orders to stop trade mark infringement (websites selling counterfeits) and not just copyright infringement. The UK still scores well for obtaining trade marks but again suffered a 54 point reduction. It is perceived as a difficult jurisdiction in which to register non-traditional marks and a good one in which to challenge them. Cases concerning the shape of the KitKat and the London Taxi exemplify this. Despite this, one respondent concluded:
“The UKIPO and the EUIPO have the best and most effective trade mark regimes.” 20\
European trade mark reform Since the results of the GIPI5 survey came in, the European trade mark system has undergone significant reform, which began on 23 March 2016 with the implementation of the EU Trade Mark Regulation. Community trade marks have become EU trade marks (EUTMs) and OHIM has been renamed the EU Intellectual Property Office (EUIPO). Member States will now have, in general, until January 2019 to transpose the provisions of the new EU Trade Mark Directive into their national laws. Those Member States that presently allow cancellation actions only to be handled by their courts will need to introduce a registry option by January 2023. The reforms will bring about a number of changes that will affect both trade mark applicants and proprietors, the most significant of which relate to fees, class headings, goods in transit, company name use and how a sign may feature on the register.
Trade mark index The European Community has been included in previous GIPIs but only for certain sub-indices. With the ability to obtain EUTMs through the re-branded EUIPO, to enforce EUTMs with pan-EU injunctions in Community courts and to exploit and challenge an EUTM there is no obvious reason not to rank it in the main trade mark index and we do this time. It enters joint 3rd place. That is a notional rise of 17 places but its previous ranking was somewhat misleading since it was based on only some but not all sub-indices. The EC takes 1st place for obtaining trade marks and 2nd for cost-effectiveness of enforcement and challenging trade marks. Despite its top ranking, it continues to receive criticism for inconsistency of its examination and appeal decisions, together with the refusal to be bound by precedents or similar cases to allow greater predictability. However, it earns commendations for its effective and quick trade mark regime, the low cost and ease of renewals and the extent to which you can control timetables.
New Zealand is now 5th, which is down one place (but no change if ignoring the EC as a new joiner above it). It has dropped eight places for exploitation but is 1st for unregistered trade mark enforcement. In reality, because its passing off law is based on English passing off law, there is no obvious reason, perhaps other than court procedure, to see it ranked 10 places above Ireland whose laws have the same origin and base. The availability of competent professional advisors and overall costs were the two factors most cited to support its scores. On the registered trade mark protection front, a new bill may finally bring a 2006 Act into force that allows the registration of names and boundaries as geographical indicators for wines and spirits. After the GIPI survey closed, a significant decision refusing revocation for non-use of a “Crocodile” and device mark that had only been used in an extremely different form is likely to impact on future GIPI scores for challenging trade marks.
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Trade mark index
Climbers
Notable Fallers
Austria has improved from 12th to 7th place, with its best result being for cost-effectiveness (4th). As a result of the Austrian PTO’s Appeal Department move from the PTO’s Supreme Patent and Trademark Chamber to the Supreme Court of Justice in Austria, there is now a specialist Board of Appeal dealing primarily with trade mark cases. It has already handed down over 150 decisions since 2014. The rulings of the High Regional Court in trade mark matters are also proving to be a reliable source of case law.
Despite receiving praise for its “comprehensive and compliant tax regime for IP rights” and being described as “probably the best jurisdiction in the European Union for the holding and management of soft IP rights”, Ireland has dropped four places in the overall rankings to 12th place. As with the UK, Ireland has been criticised for its decision in early March 2015 to enact “plain packaging” legislation for cigarettes. This made it the first country in the EU to do so. It has shown significant improvement, however, in terms of cost-effectiveness of enforcement which is likely due, in part at least, to the on-going effectiveness of the Commercial Court. This was noted in GIPI4 to have improved efficiency in the resolution of commercial disputes, which would inevitably lead to savings in terms of costs.
Italy’s ranking has gone up again, rising from 22nd to 17th place. Despite high rates of counterfeiting, recent case law indicates that reasonable remedies are generally available for standard trade mark violations when cases make it to court. This is also in line with Italy gaining points in the categories of exploitation (+28) and enforcement of registered trade marks (+17). However, as identified in our GIPI4 report, even the specialised IP Courts still suffer from substantial delays and a lack of expertise.
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Canada and the USA have again fallen in the rankings by three and five places respectively, to 10th and 15th in the table. Canada underwent a dramatic overhaul of its trade mark system in 2014, with new legislation passed which, amongst other things, eliminated the requirement for use of a trade mark prior to registration. Even so, one respondent criticised the “difficulty in registering suggestive marks” and concluded that Canada had “ridiculous examination”. This is likely to create uncertainty in terms of opposition proceedings. In September 2015, Canada finally began accepting trade mark applications in which goods and services are classified according to the Nice Classification system and there is an intention to reduce the renewal period from 15 to 10 years. However, when this will happen is unclear. Canada remains on the US government’s
Trade mark index Special 301 Report Watch List, in part because the US government considers that it has not yet gone far enough in addressing the problem of counterfeit goods, particularly in terms of transit control and customs transhipment control. Respondents to the survey criticised the USA for the “difficulty of obtaining registrations and the recurring problems of specifications”. The USA scored particularly badly on cost effectiveness, falling a dramatic 19 places and 97 points to sit third from bottom of the rankings. Oppositions were noted to be disproportionately expensive and the US trade mark application procedure was described as “cumbersome and excessive”. Some restrictions should relax after a US Federal Court of Appeal decided in December 2015 that the prohibition against registration of “disparaging” marks under the Lanham Act violated the First Amendment to the US Constitution, on the basis that trade marks and service marks constitute “expressive speech”, the freedom of which is protected by the First Amendment. Respondents are looking for resolution on two important issues before GIPI scores are likely to rise, namely whether TTAB registrability decisions on confusion can bind courts in litigation cases and the need for amendments of the Federal Rules of Civil Procedure to reduce the burden and expense of discovery.
Australia has also fared badly, dropping between one (exploitation) and 12 (cost-effectiveness) places across the board, except in terms of enforcement of unregistered trade mark rights, where it remained in 3rd place. This is despite Australia being praised for having “a very stable, predictable trade mark system” with a “highly professional and for the most part … consistent” trade mark office and a court system of a good standard and with high quality judges. Being the first country to introduce plain packaging laws for tobacco products in 2012 will not have helped its scoring. The cost of enforcing IP rights is seen as a little high but it is apparent that the courts and practitioners are working hard to reduce these costs.
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Trade mark index
Newcomers Norway enters at 6th place and is 2nd for obtaining trade marks but 17th for trade mark exploitation. The Norwegian Trademarks Act is closely aligned to the European Community regime and it is likely it will be making the adjustments to re-align them again following the recent EU reforms. One such alignment is the likely dropping of relative ground examination by the IP office. Malaysia and Taiwan join at 25th and 26th respectively. Despite scoring more highly of the two for obtaining trade marks, one respondent observed: “Taiwan is not an English speaking country and most examiners have only entry to medium level English ability. Therefore, sometimes the examiner has the wrong interpretation/ translation of the wording used in the mark.” Malaysia’s exploitation score was amongst that of a number of EU countries. Colombia enters in 31st place overall and is the highest placed Latin American jurisdiction for trade marks. It joined the Madrid system in 2012, being the first South American country to have done so, and is a member of the Andean Community countries. The latter means it applies the principle of international exhaustion of trade mark rights. It is ranked 34th for obtaining trade marks, but that seems harsh given that registration is now supposed to be secured within about four months.
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The lowest scoring of the new entries for the Far East, Vietnam sits in 35th place. Its highest scoring area was in cost effectiveness (29th place) and lowest in exploitation (41st). Sales of counterfeit goods, both online and in physical markets, remains a serious concern. The 2009 amendments to the 1999 Criminal Code, which are intended to provide law enforcement agencies and the courts with the power to use deterrent criminal penalties against infringers, have yet to be implemented. Newcomer Egypt sits in the bottom quartile across all sub-categories, with an overall ranking of 41st place. Whilst it is taking steps to upgrade its trade mark database system for use in detecting and preventing the import, export, and transhipment of counterfeit goods, concerns have been raised about the lack of action taken to prevent bad faith registrations. Nigeria enters in last position (44th). It is at the lower range of all rankings except for cost-effectiveness. That position is not surprising as Nigeria does not belong to either of the regional registration systems that apply in Africa, OAPI and ARIPO, nor does it belong to the Madrid system for the international registration of trade marks. Despite this, the Nigerian system has seen improvements: the registration system is now electronic, and both examination and opposition procedures have been speeded up.
Trade mark index Europe Sweden and France have marginal falls of one place, allowing for newcomer Norway above them. Sweden dropped places in nearly all of the sub-indices, notably nine places for challenging trade marks. Its new Trade Mark Act only came into force shortly before Sweden first joined in GIPI4 and it is now consolidating its regime. Changes in France since GIPI4 include the so called “Hamon” law. This came into force in March 2014 and increased the court’s power to award damages and broadened the investigation remedies available even if there has been no prior infringement seizure. It also harmonized the limitation period to five years for all IP infringements and gave customs the right to seize infringing goods in transit. One might expect an uptick in enforcement scores with such changes. However, at around the time the GIPI survey closed, a decree was being issued that requires claimants to at least try to settle claims before starting action. This might have diluted respondents’ enthusiasm for enforcement in France, which fell from 8th to 11th in the registered subindex. Despite this, there were favourable comments, including “Preliminary injunctions are relatively easy to obtain … French customs are extremely efficient.” However, unpredictability of decisions was cited as a negative. The Hamon law also added indications of origin to the prior rights that can be relied on in an opposition and the INPI now notifies prior owners of French rights about subsequent conflicting applications. These may explain slight improvements in France’s scores for obtaining and challenging trade marks.
The Czech Republic has kept its mid-level position of 18th place. The exclusive jurisdiction of regional courts and the use of specialized judges was meant to bring more expertise to the decision-making procedure in IP cases; unfortunately, the Czech ranking for trade mark enforcement remains its lowest out of all areas. Its courts are seen as being slow to adapt to current EU case law and the IP Enforcement Directive remains unimplemented in practice, including as regards preserving evidence and obtaining information. It again scored relatively well for cost-effectiveness of enforcement, within a few points of Ireland and Sweden, for example. Spain’s progress in past GIPIs has now peaked; it has fallen five places to 19th, seeing one of the bigger falls in score (on a par with that of the UK and Australia). Its score and ranking also fell in each of the sub-indices, in particular for cost-effectiveness of enforcement (-54 points and a drop of 11 places) and the enforcement of unregistered trade mark rights (-96 points and a drop of 16 places). The positive effect of the introduction of a specialized IP Court in 2012 seems to have evaporated.
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Trade mark index
Hungary fell a few places to be 22nd to be alongside Poland. The former’s new e-filing system has considerably improved the application process and access to data. The latter fell a little further but that may be reversed next time. Poland has seen various changes since GIPI4. In particular, the IP office is accepting co-existence agreements and consent to overcome its citations. At the time of writing, it is introducing a new system of pre-grant opposition and the IP office will then stop examining on relative grounds and will only raise objections on absolute grounds. That will align it with the EUTM system and the majority of national systems within the EU. Slovakia is the lowest ranking EU Member State, at 27th place. It has dropped two effective places and its score is close to that of Turkey and Russia. It has reform in the pipeline with a new Civil Procedure Code coming into force in July 2016. The main change is to give the Banská Bystrica District Court exclusive jurisdiction to hear all IP disputes, which will allow the judges to develop greater IP knowledge and experience. Ukraine has gained six effective places since GIPI4 and its score increase was amongst the highest across the table. It gained ground especially for obtaining trade marks and cost-effectiveness of enforcement. It also scored relatively well for enforcing both registered and unregistered rights and yet equally materially fell in score and ranking for exploiting trade marks. The latter is likely
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to be a consequence of political instability following the Crimea crisis. The improvements may reflect the effects of the IP aspects of the Deep and Comprehensive Free Trade Agreement between Ukraine and EU, which were coming into force at the time of the GIPI survey. Amongst other things, the IP office is opening access to its data on applications which had previously been restricted. Its fees, fixed in local Hryvnya currency, have fallen materially for foreigners due to its currency devaluation. Switzerland sees a marginal fall in rank to 14th and a drop in score aligned with others at the top of the table. As previously, it scores above its average position for exploiting trade marks, which will be a consequence of the favourable tax status certain cantons, such as Zug, give to IP holding companies. It fell markedly for enforcement of unregistered trade marks (down 12 effective places and 106 points, the latter of which was similar to falls for Spain and the UK in this sub-index) and four places for challenging trade marks. The latter was not seeing any uplift from changes that allow revocation for non-use actions to be filed at the registry and not just through the slower and more expensive court system. This is because they do not come into effect until 2017. Its enforcement of registered rights received a boost with a court recently granting a blocking injunction against websites selling counterfeits.
Trade mark index BRIC Countries Brazil continues to score towards the bottom of the table. Typically a country hosting the Olympics will make improvements to its trade mark laws in parallel with introducing the strict legislation that the IOC requires from the host nation to prevent ambush marketing. In reality it is not the law that is the issue here. Respondents continue to complain of “very slow procedures, with appeals taking years”. Cost effectiveness has dropped by 13 points. Several changes to the Brazilian trade mark system were introduced under a resolution published by the Brazilian Patent and Trade Mark Office in December 2014 but the focus was more on the consolidation of trade mark regulations and internal procedures rather than any changes to fees or substantial changes in procedure which would make the process of application or cancellation any cheaper for applicants. Despite experiencing continued problems with counterfeit goods, largely due to a lack of enforcement of trade marks, Russia has moved up six effective places. It has also improved between two and five places in all categories except enforcement of nonregistered trade marks, where it dropped seven places. It generally improved its score in all sub-indices. Recent changes in Russian trade mark law include publication of trade mark applications, allowing brand owners to more easily identify applications for potentially confusingly similar marks. Whilst no formal opposition procedure currently exists, interested parties are allowed to submit letters of objection to the Russian IP Office which must be taken into account when a decision on registration is made.
Trade mark index
India comes in at 42nd and is in the bottom quartile for all sub-categories. At the time of GIPI4, India was just joining the Madrid system for international filings. That is now being increasingly used. India remains in the US government’s 301 Special Report Priority Watch List, principally because of its counterfeiting problem. Many respondents are critical of its trade mark registry for the significant delays in the processing of cancellation and opposition proceedings, which all have to go to an oral hearing. Whilst the Delhi High Court wins praise, cases going to the district courts do not; delay is again a major factor in the low scoring. The e-filing system has improved application times and word marks can now be searched online. However, device marks remain unsearchable. At the time of writing but after the GIPI survey, the Indian Trade Marks Office controversially announced that almost 2 million applications were to be abandoned for lack of response to office actions. A subsequent announcement allowed for possible reprieves. The intention was to clear a backlog but the effect has been to further undermine confidence in the competency and efficiency of the Indian TMO. In spite of many efforts, China has not managed to improve its trade marks ranking and remains second from bottom. However, it has closed the score gap on India. A major negative factor for China is the ongoing proliferation of bad faith, opportunistic applications. The revisions of the Trademark Law have not delivered on this as hoped. One respondent spoke for many, complaining,
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“A real headache for right owners remains the excruciatingly high burden of proof, including on bad faith applications and own reputation in the market.” The formality requirements for Powers of Attorney, for example, are very burdensome and cause delay in enforcement actions. Evidence gathering remains hard, with data increasingly protected as classified, trade secret or simply illegal to obtain or use in court. It is now less transparent than previously. A particular concern for many is the “theory of inclusive development” recently developed by the court. This gives a right of co-existence for similar later marks if they have been used just enough to distinguish themselves from the original earlier mark. A respondent described this as “scandalous and illogical, and appears to be applied randomly and mostly in favour of Chinese brand owners.”
Trade mark index Central and South America Mexico, at 33rd, was one of only two jurisdictions whose score was unchanged. It has shown improvement since GIPI4 in terms of exploitation, enforcement of registered trade marks and cost effectiveness. Widespread availability of counterfeit goods continues to be a problem but law enforcement action is happening. Legislation is due to be passed imminently introducing an opposition system aimed at streamlining the application process. Chile keeps its 24th position, and barely changes score. It scores relatively well for cost-effectiveness of enforcement, at 16th and up 9 places. Because there is no use requirement for registration or renewal of trade marks, it has attracted the interests of trade mark squatters who register foreign brands and seek “ransom” money to let them into the country. Argentina likewise saw almost no change in score but drops to 36th (it has five newcomers to GIPI coming in above it). It saw a marked decline from 19th to 37th for cost-effectiveness of enforcement and from 27th to 40th for enforcement of registered rights, but a similar jump up for enforcement of unregistered rights to 15th from 33rd. None can be obviously explained save that enforcement proceedings are now subject to a short limitation period of three years from the date on which the infringement was committed and one year from when the claimant had the relevant knowledge.
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Trade mark index
Middle East Israel’s progress from 19th to 16th is its first rise for trade marks since GIPI1. In particular, it rose seven places for challenging trade marks. Its application of international exhaustion of trade mark rights has favoured parallel importers, as upheld by the Supreme Court in a decision that came out shortly after the GIPI4 report. The Kingdom of Saudi Arabia (“KSA”) occupies 37th position, dropping eight effective places in the overall trade mark ranking. Progress has been made with a new online filing system that has shortened the application process. Respondents say that education and training for Ministry of Commerce and Industry officials is key to further improvement. KSA also suffers from high official fees for registration and renewal, as well as high bureaucratic costs from the obligation to notarise and legalise powers of attorneys that have to be submitted at the time of filing an application. Having been marginally ahead of KSA, the UAE is now marginally behind. It is now 38th from 26th before, with the largest fall in score in the bottom third of the table. This drop is almost entirely due to the implementation in 2015 by the UAE Ministry of Economy of a new fee schedule resulting in very significant increases in official fees across the board for all trade mark related actions. Had this been accompanied by significant improvements in practice and procedure at the registry and in the courts, brand owners might have been
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forgiving but respondents have reacted negatively to this. Whilst applications can now be filed online and there is an intention to introduce specialised IP courts, the trade mark register is still not searchable online. A change in 2014 replacing the old system of examination reports and informal submissions with formal rejections and appeals has also not been welcomed. Turkey moved up five effective places and is now 29th. It has risen eight places for cost-effectiveness but fallen 10 for enforcement of unregistered trade marks. As a country frequently used to transit counterfeits, better enforcement here would be welcome. There are new procedures for filing a customs application online and the Turkish Patent Institute is now allowing a combination of a foreign registration and bad faith as a basis for opposition, which is welcomed by international brand owners without prior registered rights in Turkey. However, there are some material issues arising in Turkey. The Turkish Constitutional Court has recently cancelled several trade mark laws on the grounds that these were mere decree law, which cannot constitutionally regulate property rights such as trade marks. Since most of the IP laws in Turkey are decree laws, the validity of the Turkish IP regime as a whole is now in question.
Trade mark index Far East Singapore’s drop in ranking for both obtaining trade marks and cost-effectiveness is somewhat surprising. Over the last few years the IP Office of Singapore has made numerous amendments aimed at facilitating registration, including introducing an online registration system, improving the scope of items to be classified according to the NICE guide and promulgating a plethora of guidance notes and practice directions to help applicants. Its improved score for challenging trade marks may owe something to the high profile rejection by the High Court of Nestlé’s attempt to register the shape of the KitKat chocolate bars. This preceded the parallel case before the English High Court and CJEU.
Whilst Thailand has been ranked 34th overall for trade marks, it fared slightly better in terms of cost effectiveness and challenging trade marks. It remains on the US government’s Priority Watch List as counterfeiting remains an extensive problem. Improvement has come with reform to the Customs Act in 2014 that allowed Thai Customs officers to suspend and seize suspect goods even without a prior customs recordal in place. More recently, the intention is for Thailand to join the Madrid Protocol and there are other improvements afoot. One respondent noted that “the inability to overcome earlier marks through consent is frustrating.”
Ignoring newcomers, Japan fell four places down to 19th. Its main decline was for the enforcement of unregistered trade marks and cost-effectiveness of enforcement, where it fell respectively nine places and 11 places. It gained nine places for exploitation of trade marks. These scores reflect the inability to rely on unregistered rights to challenge a later conflicting application. Since 2015 data on Japanese registered and pending trade marks is included in the WIPO Global Brand Database. A change coming into force after the GIPI5 survey closed now allows registration of nontraditional marks such as sounds, colours, holograms, and motions. Under the new Trans-Pacific Partnership, there will be higher damages awards for trade mark infringement.
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Trade mark index
The Taylor Wessing view – enforced de-branding In 2012, Australia enacted legislation requiring the removal of all branding, including trade marks, from tobacco product packaging, with the only identifier of origin allowed being the brand name printed in a mandated size, font and place on the pack. A standard pack colour was also prescribed. The UK, Ireland and France follow suit from May 2016, with an outright ban of the sale of branded packaging in the UK and Ireland commencing from May 2017. Similar legislation is currently in the pipeline or being considered in Canada, Norway, Malaysia, New Zealand and India. This legislation has provoked fury from the tobacco companies worldwide. They failed in a challenge to the Australian legislation in its courts and to the UK legislation in the English High Court. Their separate challenge to other EU tobacco legislation at the CJEU also recently failed which paves the way for a pan-EU ban on cigarette branding. There are also legal challenges to the Australian laws pending with the World Trade Organisation brought by the tobacco producing countries of Ukraine, Honduras, Dominican Republic, Cuba and Indonesia.
Brand owner organisations, such as INTA and MARQUES, have weighed in against these laws (Taylor Wessing has contributed to this process). They express concern that it is “the thin edge of the wedge”, with such a ban potentially being extended to sugary drinks, salty or fatty food and alcohol. The UK’s IP Minister, Baroness Neville-Rolfe, has dismissed such claims. However, South Africa has introduced mandatory plain packaging for infant formula milk and Indonesia is considering the same for alcoholic beverages. Brand owners’ concerns will not have been allayed by the surprise announcement in the UK Parliament’s March 2016 Budget of the introduction of a “sugar tax” on certain soft drinks. With the health and safety lobby and “nanny state” in the ascendant, this policy could logically extend to the many types of goods that have been the subject of health scares. These include mobile phones, microwave ovens, oral contraceptives and shampoos. If only healthy and inherently “good” things can bear brands, the world will be a duller place and investment in brand building will be discouraged. The question is also not just to what extent the exploitation of such rights should be curtailed in the interests of public health. It should also address the issue of compensation for what is effectively state appropriation of brand goodwill.
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Trade mark index It seems ironic indeed that the UK government, in particular, is introducing rules to force the packaging of competing products to look alike (for now, tobacco only) when the UK laws, as scored and commented on in GIPI, are ineffectual at preventing lookalikes in the first place. One respondent succinctly concluded in respect of the UK and the EU:
“The move damages the IP reputation of both jurisdictions and must surely question their claim to being IP hubs.”
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Patent index
Patent index
Patents Initial observations The UK tops the overall rankings for patents in GIPI5, closely followed by Germany and the Netherlands, which is back again at 3rd. New joiner Norway has come in at 6th overall joint with Canada. At the bottom of the overall table are new entrants Egypt and Nigeria. Other climbers this year include Mexico and South Africa. In contrast, Ukraine and the UAE have seen the greatest falls, down respectively seven and five effective places allowing for new entrants since GIPI4. Certain points are apparent from the results: uu
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The world of patents seems to be looking up. In our GIPI4 report we noted a trend between GIPI1 to GIPI4 of reducing scores at the top of the table and a flattening out at the bottom. The GIPI5 results do not follow that trend. Instead, more than half the countries have improved their score by 10 or more points. All the rest of the countries that were in GIPI4 have scores that have gone up or down no less than 10 points overall. Since the scores are out of a total of 1,000, this is fairly marginal variation. In line with our findings in GIPI4, factors that matter to respondents in GIPI5 continue to be consistency in judicial decision making and cost effectiveness of proceedings. However, less predictably, topping the factors in GIPI5 (by some margin) was the availability of competent legal advisors. The need for a country’s patent laws to adhere to international standards of protection also remains important, as does the need to strike the right balance between the interests of patent holders and third parties.
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This may explain why it is the countries whose judges have the highest reputation and experience in patent matters that are again grouped at the top of the table in GIPI5. Finally, the speed of patent procedures and obtaining decisions played a key role in choosing to score countries down. The biggest story in the tables here is the fall of the EPO for obtaining and challenging patents. For both, it has gone from the top of the table, where it was in GIPI4, to 9th place in GIPI5. The other development occupying practitioners and businesses in the patent area is the imminence of the Unified Patent Court (UPC) and Unitary Patent, about which respondents have expressed cautious optimism. Both are discussed in the following pages.
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Patent ranking Country 1 2 3 4 5 =6 =6 =8 =8 =10 =10 =12 =12 14 15 16 17 18 =19 =19 =19 22
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United Kingdom Germany Netherlands Australia Sweden Norway Canada Singapore New Zealand France USA Switzerland Austria Ireland Japan South Korea Czech Republic Spain Israel Italy Malaysia Hungary
GIPI5 rating
Difference in GIPI4 ranking
709 695 686 671 670 666 666 664 664 662 662 657 657 654 649 645 640 637 633 633 633 631
+1 -1 0 +3 -1 – +7 +1 +1 -3 +1 -7 -6 0 -3 -1 0 -2 0 +2 – -4
Country 23 24 25 26 27 =28 =28 =30 =30 32 =33 =33 =33 =33 37 =38 =38 40 41 42 43
Taiwan Poland South Africa Chile Russia Mexico China Slovakia Thailand Turkey India Indonesia Saudi Arabia UAE Colombia Argentina Brazil Vietnam Ukraine Egypt Nigeria
GIPI5 rating
Difference in GIPI4 ranking
628 626 623 620 615 605 605 603 603 602 598 598 598 598 597 596 596 587 586 583 578
– -4 +4 -4 -2 +4 -2 -7 0 -4 +2 +1 -6 -9 – -2 -5 – -10 – –
Patent index
Analysis The top 5 There has been some shifting around amongst the top five for patents and also, notably, all those now in the top five saw improvements in their scoring. The UK has swapped positions with Germany to take 1st place and, in so doing, has improved its score by the largest margin of any country from GIPI4. It also tops the sub-indices for obtaining, exploiting, and attacking (or the ability to challenge) patents and only drops to 2nd place (under Germany) for enforcement. The courts of England & Wales have traditionally been well regarded for patent litigation. Apart from the availability of competent professional advisors, the factors most cited to support the high scoring were the competence, reputation and specialisation of the judges (including their technical backgrounds), the consistency, reliability and ease of predicting decisions and the influence that such decisions have in other jurisdictions. Noncontentious lawyers will also see this result as a vote of confidence in the use of English law as a medium for patent transactions.
In 2nd place for patents overall Germany remains very strong in all the sub-indices. It is now nine points behind the UK whereas in GIPI4 it was seven points ahead. It is all but aligned with the top-ranking countries of the UK and Australia for obtaining patents. By leading the sub-index for patent enforcement by a material 18 points, it remains the jurisdiction of choice for patentees who seek a fast injunction on patent infringement. Its specialist patent judges are cited as reasons for this, as well as the cost-effectiveness of its proceedings. As one respondent noted, the splitting of the trial on infringement from validity (or bifurcation) “provides a tactical advantage for the patentee in Germany because of the time taken for nullity disputes.” It suits defendants less well, however. Whilst it is placed 2nd for attacking patents, this explains the near-30 point gap (almost doubling the gap from before) between it and the UK in this sub-index. Securing 3rd place overall in patents for the second time, the Netherlands ranks very highly for patent enforcement and challenge and is second only to the UK for patent exploitation. This is no surprise, because alongside the UK and Germany, the Netherlands has for a long time been regarded as a heavyweight jurisdiction in this area of IP. Its specialist judges are highly valued, it is very cost effective and its practitioners are very experienced.
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Patent index
At the expense of Switzerland and Sweden, Australia has climbed to 4th overall for patents. This is a rise from 8th in GIPI4. This is largely due to the high score for obtaining patents, which reflects general admiration for Australia’s Patent Office. It is now ranked up four places to be equal top with the UKIPO for this. This may be an endorsement of the APO’s Patent Prosecution Highway programme to tie searching in with other patent offices (e.g. the USPTO, the JPO and EPO), as well as the move towards having a single application process for patents covering both Australia and New Zealand. In GIPI4 we noted that the benefits of the aptly-named Intellectual Property Laws Amendment (Raising the Bar) Act 2013 had yet to be reflected in the GIPI results. Now we think they are, and there have been further reforms in 2015 contributing to the overall improvement. Sweden remains well-regarded by our respondents at 5th place overall this year. This slight demotion from 4th place in GIPI 4 disguises the fact that Sweden has risen in reputation as a country in which to enforce patents. Sweden’s credibility in patent matters may also have been secured by its decision to host in Stockholm the Nordic-Baltic Regional Division of the forthcoming UPC.
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Patent index Europe With a broadly pan-European right, in the form of the Unitary Patent, genuinely on the horizon now – and not before time, after more than 40 years of consideration – there will shortly be a greater sense of harmonised law for patents within the EU. Until then, however, the rankings for patents indicate there are major differences still. The disparity is even more marked than it was in GIPI4, with the UK top, Slovakia ranked 30th and a spread of 100 points between them, up from the 73 points in GIPI4. Perhaps the easiest way to see how the systems vary across Europe is to use the interactive European Patent Litigation Guide produced by Taylor Wessing at www.taylorwessing.com/patentmap. The tool allows comparisons to be made between up to five countries on questions concerning first instance decisions, appeals, claim construction, validity, interim measures, damages, procedure, costs and expiry.
highly rated venue for obtaining patents in GIPI4 but it is now 9th place in GIPI5. It also outscored the UK for challenging validity but is now down at 9th place for this too. How is this explained? Whilst the EPO has often been criticised for the length of its examination and opposition procedures, this has always been balanced by the broad power of the venue to grant and revoke for all of the EPC countries. Instead, it is difficult to escape the conclusion that this is connected to its much publicised internal political difficulties. This is a problem in circumstances where the EPO is about to take on the new responsibility of managing requests for Unitary Patents when the UPC is introduced. In terms of individual countries within the EU, only Austria and Slovakia stand out for material changes in ranking for patents between GIPI4 and GIPI5. Scores tended to be fairly unchanged though, and typically were higher than in GIPI4.
Until the new Unitary Patent and UPC system is up and running, there can be no legitimate score on a pan-EU basis for the enforcement of patents. There is already a score for obtaining and challenging them since the European Patent Office is the single body granting European patents and hearing oppositions and appeals to those grants. These patents amount to a bundle of national patents in any or all (depending on designations chosen) of the 38 European Patent Convention countries. It therefore covers significantly more European countries than the 28 of the EU or the 31 of the EEA. Previously the EPO was the most
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Patent index
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Austria has dropped to 12th place for patents in GIPI5, which is an effective fall of six places from GIPI4 (ignoring new joiner Norway). There is no clear explanation for this and we note that its score is largely unchanged. Austrian patent litigation is considered relatively low cost and it is, to a large extent, harmonised with the EPC. Almost all patent litigations include a request for a preliminary injunction (PI) and, unusually and significantly, there is no requirement of urgency for a PI request in Austria. PI enforcement tends to be effective since the PI court order comes with fines of up to €100,000 per day for contravention. Damages tend not to be especially large but mainly because Austria is a relatively small market within the EU. Norway is new to GIPI and enters at 6th place for patents. Its highest rankings were for enforcing and challenging patents, and it scored well also for obtaining patents. The rankings reflect well on its courts and the Patentstyret or NIPO. Like Switzerland (a significant faller this time from 5th to 12th but a largely unchanged overall patent score), Norway will not be part of the UPC so both may miss out on a boost from this. The Swiss drop has no obvious reason although we had expressed surprise with its high newcomer ranking in GIPI4. In the sub-indices, it dropped 15 places for obtaining patents and 11 for enforcing patents. The latter
is a slight surprise since it has had specialist and technical patent judges at first instance since 2012 and their decisions have, so far, been well received. For international users, it is of interest that, if both parties agree, patent litigation before the Swiss courts can be conducted in English. uu
France has dropped two effective places back to its GIPI3 place of 10th but its score is marginally up. It fell respectively eight and six positions for obtaining and enforcing patents and yet rose five and eight positions respectively for exploiting and attacking patents. The first of these might be partly attributed to the adoption, in August 2015, of a new law imposing an obligation on employers to inform all employee inventors if a patent for their invention has been filed and when it is granted. It inevitably increases the chances of more claims for employee compensation. The fall for enforcement (both score and ranking) is less explicable. There were changes in March 2014 that strengthened customs actions, clarified rules for assessing damages, extended the rights to information and some documents and extended the limitation period from three to five years. A more recent law requiring claimants to at least attempt to settle their claims amicably before court action might have counter-balanced what otherwise ought to have led to an improvement for enforcement.
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Ireland has held stable at 14th place for patents in GIPI5, where it was in GIPI4. Similar rankings are obtained across all the sub-indices. It remains to be seen if Ireland’s standing as a patent jurisdiction will be bolstered as a result of its decision to host a local division of the upcoming UPC. Spain’s ranking and score has hardly changed but it remains a low scoring EU Member State for patents. Some respondents have an adverse perception of Spain for not joining and even seeking to challenge the creation of the UPC. Despite this, we anticipate its scores should improve in future GIPIs as the effects of its new Patent Act that came into force in July 2015 are more widely felt. This modernises the Spanish patent system and brings it further into line with EU and international standards on many issues. For example, there is now substantive examination of the patentability requirements (and indeed its highest rank, 9th, is for obtaining patents) and it creates specialised patent courts.
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Italy made a marginal gain in place (to 19th) and score from GIPI4. Its best ranking is for obtaining patents (12th), with little in the score separating it from its peers. It has signed up to be one of the 25 Member States creating the UPC which should improve its score in the other sub-indices. In terms of enforcement, respondents have noted the lack of technical background of the judges in the 22 specialised patent courts. This is blamed for complex technical patent cases taking a very long time and inconsistency in decisions. A Milan court decision in 2014 flagged up an additional issue arising from poor translations of a European patent into Italian. Patent exploitation scores may be lifted next time by the planned new patent tax incentive regime and the new Italian Patent Box tax breaks are proving attractive for investors.
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Patent index
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At least as far as obtaining patents is concerned, the scores and rankings for Poland, Czech Republic, Slovakia and Hungary are likely to improve in future GIPIs. This is in view of the increasing cooperation amongst these countries as part of the Visegrád grouping (also known as the V-4 countries). In particular, in February 2015, the V-4 countries agreed to establish the Visegrád Patent Institute (VPI) to provide the searching and preliminary examining authority under the PCT for all four countries. Amongst other advantages, it allows applicants to use their mother tongue for patents in all four countries. It is anticipated this will save materially on translation costs and improve the quality and speed of searches and examinations. The VPI’s HQ is in Budapest and its operations started in 2016. There is an option for neighbouring states to join the system.
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Subject to that, the Czech Republic sits midtable overall and for all but one sub-index. Its most material improvement in score and ranking was for challenging patents (up 9 positions and 68 points). This is likely to have reflected a recent Supreme Court decision removing the presumption that the statutory conditions for registration of utility models were fulfilled, thereby allowing the court to form its own opinion on the issue. Slovakia fell effectively four places to 30th. It remains the lowest ranked EU Member State for patents and is a marked 23 points behind the next in line, Poland. It also ranked the lowest of all EU Member States in each of the patent sub-indices. Its problem in the past has been a lack of specialist IP judges but this is set to change. That, together with the VPI developments, should lead to improvements.
Patent index Americas The USA has slightly progressed to 10th place in GIPI5, despite the expanded set of countries surveyed this year. Given the size of the US market, obtaining and litigating patents here is a fact of business life. However, as the GIPI results show, it does not follow that respondents give the US the highest rankings. Enforcement is generally viewed favourably (8th place in this sub-index), but obtaining and challenging patents is only ranked in the middle of our table. For patent challenge, there has been a downward movement of 10 places compared to GIPI4. This is despite the new USPTO procedure for challenging the validity of a patent at the Patent Trial and Appeal Board. This procedure, which was introduced as part of the America Invents Act, now allows third parties to challenge patents as well as defendants in infringement actions. It aims to be more cost-efficient than proceedings in the Federal District Court. Ranked joint 16th for obtaining a patent, the USPTO has been the subject of particular criticism from one respondent:
“Of all the IP jurisdictions in the world … I unfortunately found the US system the most bureaucratic and “other territory” phobic. We have had patents attempted to be rejected because of the English spelling of the word ‘color’ …” Where the US really impresses in in transactions and exploiting patents – the US jurisdiction and its law continues to be highly favoured here. The most cited factors influencing the scoring for the USA were the competence of its judges and advisors, the consistency and influence of its decisions and, more than any other country, the strength of its court remedies. The last may be a consequence of the sometimes very high jury damages awards and the potential for triple damages.
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Patent index
Canada has recovered its patent position from its fall in GIPI4. It now rises to 6th place from 13th overall. This may be because Canada continues to be seen as a good jurisdiction for the challenge of patent validity. One respondent complains that:
“Canada’s Life Sciences IP protections are weak … and unpredictable given Federal Court decisions.” Conveniently for geographic gathering, Colombia joins the GIPI table for the first time at 37th, ahead by one point of Argentina and Brazil at 38th=. uu
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Colombia leads the other two in each of the subindices too, with the exception of challenging patents for which Argentina is just ahead. There have been some recent reforms aimed at standardising patentability assessment policies and introducing claim protection for second uses and treatment/therapeutic methods applied in the human body. Brazil continues to score poorly for patents and has consistently low rankings in all sub-indices. The recent modernisation of the Brazilian National Institute of Intellectual Property may finally have had some impact since Brazil’s overall patent score has improved by 5% or so. However, severe delays in granting patents continue to be an issue. Furthermore, a recent Rio de Janeiro Federal District
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Court decision has been flagged as a concern by users of the system. It affirmed the controversial right of the Brazilian National Vigilance Agency (ANVISA) to re-examine pharmaceutical inventions for patentability even after examination by the NIIP that we flagged as an issue in GIPI4. Argentina’s overall score has likewise improved materially since GIPI4. Its apparent fall of two places is, in reality, a slight step up due to four new joiners coming in above it. It is notably no longer bottom for patents. Both Argentina and Brazil particularly improved their scores for obtaining patents and even more so for attacking patents (Brazil achieving an exceptional 105 point increase for the latter). However, both suffered material falls in both score and ranking for exploiting patents. Local economic and political uncertainty at the time of our survey will not have helped here.
Patent index West Pacific Rim/ASEAN There is little thread to draw together here other than one of geography. uu
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Australia’s elevation is discussed on page 38. One recent reform has streamlined the joint patent application process with New Zealand, leading to one single patent application and examination process for both territories. It also provides for the joint regulation of patent attorneys in terms of unified qualification, registration and regulation processes. As a minimum, it ought to see the scores for obtaining patents in these two countries increasingly, if not entirely, align. For now, there is a seven point and five place gap between them overall. New Zealand has likewise had patent reforms in 2013 which, amongst other things, aligned the prior art base closer to that applying in European law. Japan sits at 15th place but with only marginal change from GIPI4. It saw patent reforms coming into effect in 2015 that reintroduced the opposition system for Japanese national patents. By providing for document-only proceedings, this is expected to lower the risk of patents being invalidated, to generally improve speed and to reduce costs. Japan has already risen seven places for obtaining patents but saw a marked decline in rank (effectively 14 places) and 54 points for challenging patents. Either the new opposition system has not been well received or its effects have yet to have a material impact. It is probably the latter.
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South Korea’s drops one to 11th place, allowing for one new joiner above, and its overall score is little changed from GIPI4. However, it climbed a remarkable 17 places to 5th for obtaining patents, with a score uplift of 22 points that bucked the general trend in the top half of the table of falling scores. It has significant numbers of national and PCT filings but a substantial proportion of this is down to two electronics companies, Samsung and LG. The improved score probably reflects major reforms to its patents act that came into force in January 2015. Amongst other things, it made it possible to secure an effective filing date by submitting a specification in English. This thereby makes it much easier for non-Korean applicants to file for patent protection. However, it fared less well for exploiting and enforcing patents (drops from GIPI4 of 43 and 49 points respectively). Again, this may be a question of letting the reforms work their way through more cases before perceptions are changed.
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Patent index
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Singapore leads the field amongst ASEAN countries. It has made a slight gain in rank to 8th and score from GIPI4. It ranked most highly for enforcement, gaining a 5th place, but saw a material fall from 12th to 30th for obtaining patents. That puts it below all of Europe and Indonesia, China and Russia in this sub-index. It had a major overhaul to its patent system in 2014, switching to a “positive-grant” system (whereby only patent applications which fully meet patentability criteria will be granted). However, this has not been reflected in its score for obtaining patents yet. Further amendments to the patent examination process have been announced with the aim of strengthening the patent regime and enhancing the quality of patents granted in Singapore. This will close the so-called “foreign route”, so that all Singapore patent applications will have to undergo substantive examination by the local IPO.
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Indonesia and Thailand both saw similarly slight gains in places and scores, effectively up three places each (to respectively 33rd and 30th) and scores uplifts of 34 and 10 points respectively. Both countries saw significantly improved scores for challenging patent validity. With only a marginal 5 points in it, Thailand sits above Indonesia overall and does so in all categories, except in the area of obtaining patents. Both are looking to improve their laws, with Thailand’s Department of IP announcing likely amendments to its patent act aimed at expediting and improving the patent examination process and to accommodate the Doha Declaration on the TRIPS Agreement and Public Health. Likewise, Indonesia’s patent law is at present also under amendment.
Patent index Middle East and Africa uu
Saudi Arabia shared 33rd position in GIPI5 overall, not only with Indonesia but also its neighbour the United Arab Emirates. For Saudi, this is an effective fall of four places and a bigger one for the UAE of six places – but neither saw material falls in score overall. Both saw significant falls for challenging patents (respectively 18 and 21 places) and the UAE made a dramatic drop to the bottom of the table for obtaining patents. The latter is almost inevitably a reaction to the material increase in official fees recently introduced by the UAE IP office. Aside from the fee hike, the UAE has been taking steps to improve its speed of substantive patent examination, in support of its aim of leading the Knowledge Economy in the region. However, it is the Gulf Cooperation Council (GCC) that seems to be emerging as the most important body for granting patents for both countries (and the region);
“Few clients are registering for patent grants in Saudi Arabia. The majority now use the GCC patent which protects for Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.”
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Israel remains mid-table for patents, in 19th place alongside Italy and Malaysia. As anticipated in our GIPI4 report, the patent act reforms in Israel seem to have helped it secure an overall 16 point improvement. It again scores poorly for obtaining patents (30th), drops 44 points for enforcing patents (24th place) but scores particularly well for patent exploitation (16th) and challenging patents (15th). The score for obtaining patents may not have been helped by a series of changes to patent term extensions that began in 2014, which are reported to have confused some patentees. Respondents picked out the availability of competent advisors as a particular positive for Israel. Egypt and Nigeria join the GIPI patent tables at 42nd and 43rd places respectively. This is perhaps surprising for Nigeria, given that it has a strong petrochemicals industry, but we are not aware of any current measures being proposed to improve either regimes. South Africa, by contrast has improved from 29th to 25th place overall in GIPI this year, despite the additional number of entrants to the table. This change is owed largely to its meteoric rise from 30th place in GIPI 4 to 8th in GIPI 5 for obtaining patents. This was achieved with a 37 point increase. It is a particularly curious result given that statistics from the World Intellectual Property Organisation indicate a static performance in patent filings in recent years in the country. There has also been controversy over proposed and, as yet, un-enacted reforms to the process by which patents are granted. /47
Patent index
Other important economies uu
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Russia has remained effectively at a standstill in the overall GIPI5 rankings, allowing for new joiners, at 27th place. The launch of the new IP court, intended to play a major role as an appellate court, both in revocation as well as in infringement proceedings, which we reported in GIPI4, appears to have had little effect on this performance. Its occupation of Crimea and the subsequent destabilisation of Ukraine has negatively impacted the country’s patent system (amongst many other consequences). Its overall score has changed little and it has dropped five places. It notably dropped seven effective places for exploiting patents and 10 effective places (and a notable 68 points) for enforcing them but gained 73 points for attacking patents. China has likewise not moved up or down relative to its GIPI4 ranking and is 28th. Having formerly been towards the bottom of all the tables in earlier GIPIs, it now sits at the bottom of the third quartile for patents. There has been a slight slow-down in the previously rapid pace of patent reform seen between our publication of GIPI3 (in 2011) and GIPI4 (in 2013). The much trailed fourth round of amendments to the patent law were published at the end of 2015. These seek to improve the enforcement prospects of patent holders, including the concept of wilful infringement for repeated infringements or those conducted by multiple parties. In such cases, local IP offices will be able to seize the infringing products and the equipment used to make them. Wilful infringements may also give rise to awards of
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triple damages. These changes, when implemented, may go some way to addressing criticism from respondents that damage compensation still lags behind other jurisdictions. Negative factors for respondents were overall costs and the lack of consistency, unreliability and unpredictable nature of decisions. India has also benefitted from new joiners (Colombia, Vietnam, Egypt and Nigeria) coming in below it. It now sits in 33rd place, a material improvement on its second-to-bottom place in GIPI4. This rise is broadly reflected in all of the sub-indices. What is often seen as the inadequate protection of patents in India remains an issue, particularly in the pharmaceutical area. However, comments received from respondents suggest that India will maintain its upward movement as its economy is further globalised:
“a number of multinational companies and various industries are seeking to invest in India. Due to this, the demand for protection of their intellectual properties is on the rise.”
Patent index The Taylor Wessing view – European harmonisation The UPC and the Unitary Patent dominate the background to the patents section of the GIPI5 survey. Since GIPI4, this new system has developed to the stage where the court is expected to hear its first cases in early to mid-2017. As a result, many respondents have cited it as the single most important intellectual property development facing their industry. The objectives of the reforms were to make patenting and patent litigation more affordable, to further harmonize substantive patent law and to reduce claimants “forum shopping” for the most favourable jurisdiction in which to litigate. Doubts have been expressed in the past about whether the new system is likely to achieve these objectives. However, responses to GIPI5 suggest that there is cautious confidence in the ability of the new system to handle the enforcement and revocation of patents. In particular, those who intend to use the UPC as a forum of enforcement greatly outnumber those who do not. The majority of respondents also suggest they will only partially opt-out from the UPC, rather than leave all patents in the new system or opt them all out. This indicates that patentees are making fine judgements about the role of their patents in the new system.
In particular, many patentees in all sectors will be attracted to the powerful, pan-European enforcement measures on offer in the new system. On the other hand, advantages of certain national systems – most notably speed – will remain an important tactical tool for a wider European enforcement and revocation strategy. Also, whilst many patent holders are hesitant to trust their “crown-jewels” to the new system, they recognise that they need to participate in shaping it, particularly on powers such as preliminary injunctions and search and seizure orders. The result may be that patentees consider leaving their less commercially important patents in the UPC, whilst opting-out those that are more commercially important but more vulnerable to pan-European revocation. Perhaps most surprising, given that the new court is only a year away, is that almost half of respondents have not decided whether to opt-out their European patents or not at this stage. This may in part be because of a cited lack of sufficient information being available on the UPC and its procedures. (For more information on the UPC, visit www. taylorwessing.com/upc).
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Copyright index
Copyright index
Copyright index The Netherlands and Canada have made strong gains of 11 places to rise to 1st and 3rd, respectively, in the table. Germany leapfrogged the UK, Singapore and Sweden into 2nd place. Norway is the highest new entry with a score that would have placed it 1st in GIPI4. Ireland, New Zealand, Australia and Israel made strong gains. Malaysia was the second highest new entry and performed well compared against its peers in that region. In the bottom half of the table, South Africa moved up 10 places and Russia fell 12 places. The USA and France suffered significant falls respectively from 2nd to 16th and 6th to 15th. Four new entrants make up the bottom five places: Vietnam, Egypt, Nigeria and Taiwan. There is little movement in rankings in the bottom half but there were some significant drops in rating, with Slovakia, Mexico, Turkey, India, Russia and Ukraine all falling by 40 points or more. Consideration of the main table and sub-indices suggest some further opening remarks: uu
The best regimes are getting better but the worse are losing ground. The increase in the scores at the top of the table reverses the trend from GIPI4 and GIPI3. Before the top and bottom scores were moving closer together, now they are diverging. In GIPI2 the difference between top and bottom was 373, in GIPI3 it was 262 and in GIPI4 it was 53. The gap is now 279 points. Leaving out this year’s new entrants in the bottom three places of the table (and Taiwan in last place was over 100 points lower than Nigeria in second to last place), the gap is 134 points.
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Copyright continues to have the lowest top rating of all the IP rights surveyed. It now also has the lowest bottom rating as the scores at the bottom have fallen. That again reverses the trend from GIPI3 to GIPI4, which saw significant improvements in their ratings. It is the ease of exploitation that most differentiates between the jurisdictions: the score range for this is 587 points, compared to 279 in the overall table. Score ranges for enforcement and costeffectiveness of enforcement are broadly similar to each other and largely reflect the overall rankings but the scores are lower than for exploitation. It seems it is perceived to be easier to exploit copyright than it is to enforce it. Only 106 points separate the scores on the “balance” of the regime. In general, the lowest overall scoring countries (such as Ukraine, Nigeria and Thailand) score best for balance and vice versa, with France, Germany and the UK propping up the balance index.
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Copyright index
Copyright ranking Country 1 2 3 4 5 6 7 8 9 10 11 12 =13 =13 15 =16 =16 =18 =18 20 21 =22
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Netherlands Germany Canada United Kingdom Singapore Sweden Norway Ireland New Zealand Japan Austria Australia Israel Malaysia France Czech Republic USA South Korea Switzerland Italy Chile Hungary
GIPI 5 rating
Difference in GIPI4 ranking
678 665 663 662 656 655 653 650 649 641 640 639 634 634 628 621 621 617 617 612 611 610
+11 +2 +10 -3 -2 -2 +9 +4 -1 -4 +5 +9 – -9 -3 -14 -9 -11 -1 +3 -13
Country =22 24 25 26 27 28 29 30 31 =32 =32 34 35 36 37 38 39 40 41 42 43
Spain Poland South Africa United Arab Emirates Saudi Arabia Thailand Brazil Slovakia Indonesia Mexico Argentina Colombia China Turkey India Russia Vietnam Ukraine Egypt Nigeria Taiwan
GIPI 5 rating
Difference in GIPI4 ranking
610 609 607 600 583 581 580 579 575 568 568 567 566 564 556 552 547 544 534 504 399
-9 -4 +8 -3 +3 0 -2 -9 +5 -4 -1 – -3 -10 -2 -13 – -7 – – –
Copyright index
Analysis Climbers Those securing the biggest improvements in GIPI5 have tended to be within the EU or are common law countries. Looking at the former: uu
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The Netherlands has come top in GIPI5, scoring well for enforcement of copyright and cost-effectiveness (for which it had fared less well in GIPI4). It scores well for its speed of procedures, the consistency of decisions, the strength of court remedies and the competence, reputation and specialisation of judges. Its new Copyright Contract Act came into effect on 1 July 2015 and it strengthens the position of authors. The Act contains a “bestseller” clause, giving authors the right to reclaim a work of art if it is not being used and more rights for authors to claim proportionate and fair compensations from right holders such as producers. Germany is now 2nd up from 4th= in GIPI4. This is mainly due to a significant improvement in its perceived cost-effectiveness. There has been no notable legislative initiative but it scores well for the competence, reputation and specialisation of its judges as well as overall costs. Two recent Federal Court of Justice decisions have required German ISPs to block access to websites even though only some of the content was infringing. These decisions have been criticised for promoting censorship but they largely demonstrate the difficult task of reconciling these opposing interests.
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Ireland is now 8th. 2015 saw the Irish courts firm up their position on anti-piracy measures, with the Commercial Court granting an injunction, based on EU law, against the ISP UPC Communications. In what was considered the world’s first courtordered “three strikes” graduated response system, this required UPC to take measures against its subscribers to prevent illegal downloading at the request of the major record labels. Ireland scores consistently across the exploitation, enforcement and cost-effectiveness sub-indices.
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Copyright index
Ireland joins other common law countries that have seen improvements (and we include Israel here as having a legal system that borrows much from common law systems): uu
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Canada’s copyright regime has seen major changes recently which have led to a leap of 11 places in its copyright rankings to 3rd place. Its rise of 29 places to 4th for cost-effectiveness of enforcement is even more marked. This is likely to have been the result of certain procedural improvements introduced in 2015 by the Federal Court of Canada. Also, from 1 January 2015, Canada has operated a notice-andnotice regime for ISPs seeking to avoid liability for user-uploaded infringing materials. The ISPs can escape liability provided they pass on to the relevant user the notice they get from the rights owner. Its enforcement score will have been improved courtesy of a record $10 million damages award, made in early 2014, by the Canadian Federal Court. Despite these positive steps, Canada remains on the US government’s Special 301 Report Watch List as the US government considers that it has not yet gone far enough in addressing the problems of piracy and counterfeit goods.
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New Zealand is now 9th but its gains are somewhat harder to explain. A “three strikes” copyright law also came into force in New Zealand in September 2011, which provides that it is the internet account holder who is deemed responsible for unlawful uploads and downloads of infringing material, regardless of who actually uploaded or downloaded the material. The law also requires ISPs to send notices on behalf of copyright owners, for a fee of $25, to be paid by the copyright owner, per notice. Not only are ISPs unhappy about the increased administrative costs incurred by this system but some rights holders, such as the Motion Picture Association, have refused altogether to participate in the three strikes regime because of the fees payable to the ISPs. Further, whilst in 2013, the New Zealand Copyright Tribunal issued 17 decisions under this law, all of which found the account holders liable, none of these decisions involved infringement on a commercial scale and the average fine was relatively low. New Zealand’s rating for cost effectiveness of enforcement seems to drag down its rating.
Copyright index uu
After suffering a significant fall in rankings in GIPI4, Australia appears to have bounced back, rising five places to 12th for copyright overall. In June 2015 the Australian parliament inserted site blocking provisions into the Copyright Act 1968, applicable to sites outside Australia where “the primary purpose” is copyright infringement, or facilitating copyright infringement. Further, the Australian government required the ISP industry and rights holders to develop a code to address peer-to-peer piracy. This comes on the back of a landmark Federal Court decision requiring an ISP to disclose names and addresses of its customers who had illegally downloaded the 2013 film Dallas Buyers Club. Uncertainty remains, however, due to the on-going debate in respect of the recommendations made by the Australian Law Reform Commission a few years ago that Australia should adopt a fair-use style flexible copyright exception. Australia scores well for enforcement, ranking in 6th place, but loses ground for cost effectiveness (in 19th) and exploitation (in 15th).
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South Africa jumped 10 places to 25th place. Overall costs and access to good professional advisers were important factors for its improved scores. However, not all respondents were satisfied, with one commenting that the current copyright law was “not compatible with the new technology”, insisting on “an overhaul of the whole copyright system”. Israel’s ranking significantly improved from 22nd to 13th. Its Authors Act came into effect in February 2014, introducing new regulatory requirements with respect to publishing, distribution, sales and profit allocation across the book supply chain. The WIPO internet treaties however still need to be ratified and implemented.
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Copyright index
Fallers The biggest news here relates to the USA, which suffers a surprisingly dramatic fall from 2nd to 16th place. The irony is not lost since it is the USA that considers itself at the forefront of the international drive to improve copyright regimes, both through its Special 301 Report and activity at the WTO. Rights holders were likely to have been unsettled by the US Appeals Court ruling in October 2015 that “Google Books”, Google’s system of scanning of library books and displaying of free “snippets” online, constituted fair use and was not a violation of the authors’ copyright. The US music publishing community would also have been concerned by the suggestion in a review carried out by the US Department of Justice at the end of 2015 that ASCAP and BMI could license 100% of the rights required to publicly perform any musical work in their respective repertoire regardless of whether the work is wholly or partially owned by its members. Subsequent to the GIPI5 survey, the US Copyright Office rejected the idea that full performance rights to a co-written song could be granted without fully owning the rights to the track. This may see the USA’s ranking improve again in the future. The most striking of the USA’s results is that it comes second to bottom on cost-effectiveness of enforcement, despite scoring well for exploitation (9th) and enforcement (8th).
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Four EU Members States, whose copyright laws remain largely unharmonised in many respects, were also included amongst the big fallers: uu
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France has also fallen dramatically, from 6th to 15th, having been consistently in the top ten. It also saw a drop of 6 places for exploitation of copyright and 9 places in the balance sub-index. The former seems harsh given the major steps taken to foster the exploitation with more tax breaks and support for audio-visual works. It scores well for enforcement, perhaps helped by the reorganisation of the competent jurisdictions so copyright cases are now handled by divisions forming part of the civil courts. This allows for quicker handling of cases by specialist judges. Spain has fallen from 15th to 22nd. Whilst it had a reformed Copyright Act come into force in January 2015, that is subject to a challenge at the European Commission by several Spanish internet user associations. Their complaint is that the obligation for news aggregators (e.g. Google News) to compensate publishers for using their content is anti-competitive and has led some content aggregators to turn their backs on the Spanish news services market. Other reforms made in 2015 seem not yet to have led to better scores. They include amendment to collecting society rules, expanding the definition of infringement to include indirect infringers, improving civil procedures, increasing criminal penalties and criminalising new additional forms of behaviour.
Copyright index uu
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Austria’s ranking dropped from 7th to 11th, which is most likely due to the on-going discussions concerning copyright levies and their operation and the claim brought in 2008 by the collecting societies against Amazon. Amazon won in August 2015 and won again on appeal in December 2015. This will have been at the forefront of many respondents’ minds at the time of the GIPI survey. The Court of Appeal confirmed that the (previous) Austrian copyright levy fees system was not compliant with EU law. This case is now pending before the Austrian Supreme Court. Hungary is ranked 22nd, which is a significant fall from its 10th position in GIPI4. There are reasons to think this could be reversed. At the end of 2015, the Hungarian government introduced its “Digital Welfare Programme” aimed at ensuring as many users as possible have ready access to lawful and affordable online media content. There is also an on-going review of the Hungarian copyright regime, and amendments, even a new act, are expected.
Other fallers include: uu
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Switzerland is one of four countries that lost more than 10 places. It is now 18th=, alongside South Korea. This overall decline mirrors its results in all the copyright sub-indices. Just very recently, however, the Swiss Federal Council initiated steps to modernise its copyright law regime, attempting to better face Internet piracy and the challenges of the current technological developments. South Korea has fallen to mid-table, despite having arguably the strictest anti-piracy laws in the world. Its government invests heavily in fighting internet piracy, with a yearly spend of around £12.7million (approximately double that of France). The government has also launched an initiative to encourage the general public to participate in its fight, setting up a web portal through which illegal websites can be reported, in return for coupons and gift cards worth up to £1,700 per year, depending on the number of reports made. Turkey fell nine places to 36th position. It fared poorly in each of the sub-indices, particularly in copyright enforcement and in the public’s perception of cost-effectiveness in enforcement. The latter shows a remarkable decline of 33 places, falling from 3rd to 36th position in this category. Although some minor changes have been implemented into Turkish copyright law, Turkey continues to struggle to find sufficient legal solutions to counter growing Internet piracy – a topic that was mentioned in GIPI4. A draft bill, however, is in the pipeline aimed at tackling digital infringements of copyright. /57
Copyright index
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Russia fell to 38th place. Most dramatically, it has fallen 37 places for cost effectiveness and 12 for enforcement. Critics of the so-called “Anti-piracy Law”, which first introduced web blocking interim injunctions in 2013 and which was expanded in May 2015 to cover almost all copyright works (excluding photos), suggest that it is too ambiguous. They also say that the procedures for introducing and enforcing injunctions are too open to circumvention to be effective. Whilst Russian courts have begun to issue criminal convictions for online piracy, they have resulted in suspended sentences, undermining any deterrent effect such convictions may have had.
Minimal movers Despite the turbulence elsewhere in the table, little has changed as regards respondents’ perceptions for a number of countries with no obvious connections. The reasons for this vary. uu
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The UK dropped slightly from 1st to 4th place but secured the top score for exploitation and 2nd for enforcement. Most marked has been its improved cost effectiveness ranking, leaping 22 places to now be 11th for this. Rights holders welcomed the High Court’s decision in June 2015, in a judicial review application, to quash the UK government’s attempts to introduce a private copying exception. This subsequently led the UK government to abandon this proposal altogether. However, uncertainty remains in respect of the newly introduced quotation and caricature, parody and pastiche copyright exceptions, which, thus far, remain untested in the UK courts. Site blocking injunctions continue to be granted against ISPs in respect of pirate film, TV and book services, in an increasingly streamlined process. Singapore moved from 3rd to 5th despite a small increase in its rating. It scores consistently well for exploitation, cost-effectiveness and enforcement. In 2014, the Copyright Act was amended to allow for updated tools to combat online piracy, introducing a judicial site-blocking power. Rights holders can now apply to the courts for injunctions directing ISPs to block access to flagrantly infringing websites, without having to first establish their liability for copyright infringement.
Copyright index uu
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Sweden likewise dropped two places, from 4th to 6th position. Its rise of 29 places for costeffectiveness of enforcement, now places it 3rd behind the Netherlands and Germany. However, it dropped eight places to 11th for copyright enforcement. Swedish courts continue to handle cases relating to copyright infringement by The Pirate Bay websites. In May 2015, a Swedish district court ruled that the domain names piratebay.se and thepiratebay.se must be transferred to the Swedish state. In November 2015, the District Court of Stockholm, however, held the that the ISP Bredbandsbolaget was not responsible for any copyright infringements occurring on The Pirate Bay site and so was not required to block access to it. The judgement may be appealed. Japan retained its 10th position of GIPI4. It scored well for copyright exploitation, climbing eight places and entering the top three, just behind the UK and the Netherlands. Its cost effectiveness ranking increased by nine places. However, it suffered a significant decline in respondents’ perception of copyright balance (as between rights owner and user), falling 13 places. 2015 saw some amendments to its Copyright Act and developments arising out of the Trans-Pacific Partnership agreement pursuant to which Japan and other countries agreed to strengthen IP rights. The latter is likely to lead to more reforms to its copyright laws and strengthening of rights holders’ positions, e.g. extending the term of protection.
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As was also the case in GIPI4, Italy’s position again slightly fell but it remains in the middle of the copyright ranking. The regulation concerning online copyright protection approved by the Italian Communications Regulations Authority (issued on 12 December 2013) was challenged on the grounds of conflict with the Italian constitution. The Italian Constitutional Court however rejected the challenge on procedural aspects and uncertainty remains regarding the merits of the case. The Czech Republic’s ranking dropped slightly from 13th to 16th. Whilst respondents question the effectiveness of IP enforcement before the Czech courts in civil proceedings, it is heading in the right direction with adoption of a copyright act that reflects the needs of industries dependent on protection for software and databases. Chile dropped down in the overall rankings but it also rose seven places to 17th for enforcement. In June 2015 Chile ratified the Beijing Treaty on Audio-visual Performances, which gives performers economic rights over their performances, including recorded material and live performances. It also recognises performers’ moral rights and provides rules about assignment of these rights. However, Chile remains on the US government’s Special 301 Priority Watch List due to serious concerns regarding longstanding IP rights issues under the United States-Chile Free Trade Agreement.
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Copyright index
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China has likewise largely maintained its previous ranking, with a loss of only two places. It is now 35th. It scores averagely for copyright exploitation but badly for copyright enforcement, costs effectiveness for enforcement and the copyright balance. Its score may well be held back by the outstanding revision of the Copyright Law which started in 2012 with no end of the process in sight. Although China has made significant efforts to increase copyright enforcement, such as by the criminal enforcement campaign “Swordnet 2015”, and the Draft Administrative Copyright Punishment Measures was issued by the NCAC, online piracy and infringement is widespread. The National IP Strategy emphasizes the need to create digital content for marketing and exporting which aligns with its improved score for exploitation. However, the complicated process of providing evidence in enforcement cases and the myriad of sometimes competing agencies claiming jurisdiction trigger a mix of frustration and disillusion for respondents. In terms of exploitation under licence, one respondent lamented the absence of Chinese copyright collecting societies:
“[It] makes it difficult to properly license rights and contributes to uncertainty. Establishment of organizations similar to ARS (US) and DACS (UK) in Asia is long overdue. Orphan works (copyright owners cannot be determined or located) are still a huge problem (including in the UK despite the new orphan works registration system) – making it difficult or risky to use works which cannot be licensed.”
Copyright index Successful new entrants Norway achieved the best overall result of all new participants, holding a strong 7th place of 43 countries. The overall result is particularly noteworthy as it would have beaten the UK’s top rating in GIPI4. Copyright exploitation, enforcement and cost-effectiveness are all very highly regarded in Norway, being in the 7th, 12th and 4th places, respectively, in the sub-indices. These good results are only slightly impaired by a relatively poor 32nd place with respect to copyright balance. It is notable that Norway’s results are almost identical to Sweden’s and they show the same characteristics in all sub-indices. These good results may reflect the up-to-date Norwegian Copyright Act, which has been amended several times over the past couple of years to strengthen rights holders’ positions with regard to the challenges to copyright brought by the Internet. In Malaysia’s first appearance in GIPI, it scored well in 13th place and was the second highest ranking country from East Asia, behind Singapore. Strength of its enforcement regime weighed slightly on its ranking, in 19th place in that sub-index. When the Trans-Pacific Partnership Agreement is ratified in late 2016, copyright term will be increased from 50 years after the author’s death to 70 years.
Copyright index
Unsuccessful new entrants The ASEAN region saw two new joiners with low scores. uu
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Vietnam joins GIPI at 39th position for copyright. It scores poorly for exploitation and enforcement, facing some criticism for a lack of judicial guidance for assessing damages and its complex court procedures, but fares slightly better (at 32nd) for enforcement cost-effectiveness. Taiwan enters at the bottom of the table for all categories. This may be due in part to the rise in popularity locally of “piracy boxes”, storage devices, often with capability to play high definition content, loaded with pirated works or configured to facilitate user access to websites hosting unlicensed content. However, the Taiwanese government is taking steps to enhance IP right protection and enforcement, having entered into Trade and Investment Framework Agreements with numerous trading partners around the world, including the USA, which has facilitated discussions focussing on this area.
Colombia has taken steps since 2014 to implement the United States-Colombia Trade Promotion Agreement, as well as to comply with its geographical indications obligations to the EU. However, with the instances of online piracy having risen sharply in recent years and with very little being done to investigate, let alone prosecute, the operators of large pirate websites and mobile applications based in Colombia, it is of little surprise that Colombia enters the rankings this year close to the bottom of the table. Newcomer Egypt enters the copyright rankings in 41st place. Another country on the US government’s Watch List, it faces continued challenges in its enforcement of IP rights. However, the Egyptian courts appear to be moving in the right direction, having awarded, in April 2015, one of the highest compensatory awards made in the Middle East region in respect of non-payment of royalty fees. Another newcomer near the bottom of the table, Nigeria has some of the largest and most notorious markets for counterfeit and pirated goods in Africa. However, reform is currently underway, with draft rules updating Nigeria’s copyright law regime expected to be submitted to Parliament in 2016. The reforms cover ownership, transfers and licences for protected works, set out penalties for infringements and provide for criminal liability for copyright offences. The proposals contain provisions for issuing and carrying out takedown notices for infringing material, and for suspending the accounts of repeat infringers, as well as addressing internet service provider liability for copyright breaches.
Copyright index The bottom half This is populated by countries from certain geographic clusters, typically recognised with business as CEE, MENA, LatAm and Asia. The central and eastern European countries here include Poland, Slovakia and Ukraine, with only the latter not in the EU: uu
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Poland dropped by four positions into 24th. It receives criticism for its current copyright levy system, which is considered ineffective and unintelligible. The legislation in this area is unclear and the approach taken by the collecting societies adds to the complexity. Copyright enforcement is considered problematic: proceedings are lengthy, there are no specialist courts and there are doubts that the relevant EU directives have been correctly implemented. There are signs of progress with a significant amendment to Polish copyright law made in 2015 aimed at clarifying the “fair use” exceptions and facilitating commercialisation of works from the public domain. Slovakia, falling nine places to 30th overall, is the lowest scoring EU Member State by a margin of 30 points. Too late to have an impact in this survey, its new copyright act entered into force on 1 January 2016. Amongst other things, it drops the requirement for written licence agreements other than for exclusive or collective licence agreements. Moreover, a new Civil Code, which will enter into force on 1 July 2016, designates only three courts entitled to hear copyright disputes, sparking hope for higher specialisation of judges in these matters. /63
Copyright index
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Ukraine has fallen six places in the overall rankings, and now sits ahead only of newcomers Egypt, Nigeria and Taiwan. Official use of unauthorised software continues but on a slightly lesser scale now and it is principally this that keeps it on the USA’s Special 301 Watch List. Despite Ukraine hosting some of the largest internet piracy websites in the world, legislation addressing online infringement remains in the drafting stage and prosecutions are rare. The current government, elected in October 2014, has expressed a will for reform in this and other areas of IP right-related deficiencies but, as yet, it appears little has changed.
In the Middle East, Saudi Arabia and the UAE still feature in this half: uu
64\
Saudi Arabia has moved up four places in the overall rankings to 27th. Whilst it has increased its efforts to fight online piracy, including website blocking injunctions, its enforcement is considered hampered by a lack of any concept of binding precedent in its court system.
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The UAE’s overall ranking has slipped three places, from 23rd to 26th, but its ranking in terms of enforcement and exploitation has remained constant. Enforcement remains an issue as it is based on criminal law principles, which means that whilst (often inadequate) fines will be levied, injunctions preventing future infringement are not available. Its biggest drop in ranking is for cost-effectiveness of enforcement (seven places) which is probably due to the material increase in the Ministry of Economy’s administrative fee schedule introduced in May 2015. This may yet be turned around since the UAE has introduced a new law to set up dedicated IP courts with specially trained judges. This is likely to result in an increase in copyright litigation in the UAE, where reasonably cost efficient and speedy relief can be available.
Copyright index Latin America is well represented here: uu
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In spite of the efforts made to improve its domestic IPR regime in 2014, Brazil has slipped down the rankings. Whilst the National Council on Combating Piracy and Intellectual Property Crime carried out several successful anti-piracy operations targeting the importation of counterfeit goods, as well as providing effective training to help consumers identify counterfeit goods associated with the 2014 World Cup, significant concerns remain with respect to the high levels of counterfeiting and piracy in Brazil. In the absence of legislation regulating digital exploitation of works, a Brazilian court has found that transmission of music over the internet does not give rise to the collection of public performance royalties. Mexico has also fallen further down the rankings. Not only has it failed to fully implement the WIPO Internet Treaties but the policy by which Mexican customs authorities and the Attorney General’s Office worked jointly to intercept and prosecute transhipments of counterfeit and pirated goods, in place up to 2011, has shifted so that authorities now only take action against transhipments of suspected infringing goods if there is evidence of “intent for commercial gain” within Mexico.
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Another country still on the US government’s Priority Watch List, Argentina has slipped down the rankings in all sub-indices. Marketplaces selling almost exclusively infringing goods are flourishing with little to no official steps being taken to address this issue. Internet piracy is also rife. The Priority Watch List entry for Argentina gives an example of cuevana.tv, a channel offering pirated content, which is the 75th most popular website in the country, with an estimated 150,000 visitors each day. Civil enforcement is an uphill struggle and criminal enforcement nearly non-existent. As with Ukraine, rights holders also complain of widespread use of unlicensed software, not only by private enterprises but also by government agencies.
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Copyright index
A trio of Asian countries completes the picture: u
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India has stayed low in the rankings and remains on the US government’s Priority Watch List. Its court system is hindered by a lack of specialised judges and it requires significant judicial reform before it can effectively combat the problems it faces in respect of counterfeit goods and internet piracy. Commercial Courts were created in October 2015 to address the concerns about the delays of handling cases including those related to all IP rights, which may be expected to have an impact on India’s low 34th place ranking for enforcement. Indonesia has risen six places in the rankings. This may be the fruit of its major new copyright law introduced at the end of 2014. It introduced greater clarity for important terms such as royalty, established collection management organisations, extended term from 50 to 70 years after the author’s death, increased criminal sanctions and allowed for e-filing of copyright recordals. A recent reform has also improved protection for licensors and licensees, requiring recordals of copyright licences before those licences can have legal consequences against a third party. A “Joint Regulation on the Implementation of Content and/or User Access Blocking of Content that Infringes Copyright and/ or Related Rights on Electronic Systems” was passed in July 2015. It covers complaints about
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online copyright and related rights infringements reported to a government ministry. The ministry will decide whether to block, partly or entirely, access to infringing content, by blocking content or user access. Within the first two months of its operation, 22 websites containing illegal films had been shut down. Thailand has remained almost stationary in 28th place. Its enforcement and exploitation sub-index ratings were roughly consistent with GIPI4 but its cost-effectiveness ranking fell by 18 places. Reforms to the Copyright Act mean that any unauthorised recording of movies in cinemas, even for personal use, is explicitly prohibited, with fines or imprisonment as sanctions.
Copyright index Taylor Wessing view – reform and development The appetite for reform of copyright shows no sign of abating. This perhaps explains the substantial movements in ranking and ratings in GIPI5. In the seemingly never-ending attempts to make copyright “fit for a digital age”, various constituencies are perhaps inevitably going to be disappointed with the outcomes. In particular, the challenge will be to allow the law to help meet the ever-growing demand for quality online content to be licensable with ever greater ease and centralised royalty collection on a cross-border basis.
The countries at the bottom of the table have seen material decreases in rating, perhaps suggesting a separation of regimes into those who are keeping up with digital developments and challenges and those that are not. Russia and the Ukraine, for example, saw the two biggest falls in rating, which may hold some resonance for those who have attempted to shut down pirate services operating in those territories. It is a theme of the countries towards the bottom of the table that difficulties with enforcing copyright online weigh heavily on their scores.
We suggested in GIPI4 that it was perhaps too early, at that stage, in the reform and development cycle of copyright reform to assess what impact the changes have had. 30 months on, and perhaps music to policy makers’ ears, there were across the board increases in rating at the top end of the table.
There is a consistent message about how to improve a country’s performance in the GIPI ranking: improve enforcement and the costeffectiveness of enforcement. Nowhere is this truer than in the US, where its poor performance in GIPI5 was at least in part caused by its second to bottom ranking in cost effectiveness of enforcement. Those countries which streamline enforcement procedures and/or improve the measures available to prevent pirate services from operating or being accessed are likely to see improvements in their ranking and/or rating in future GIPIs.
When writing GIPI4 substantial reforms were underway in the USA, Australia, the UK, Ireland, Canada, Mexico, Slovakia and Sweden. This has translated into substantial increases in ranking for Ireland and Canada and increases in ratings for Australia, the UK and Sweden but a substantial decrease in ranking and rating for the USA and Slovakia and more minor decreases for Mexico. Reforms do not always have their intended consequences, after all.
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68\
Design index
Design index
Design index Initial observations The biggest fall – once again – sees the USA move from 17th in GIPI4 to 42nd this time. The two second biggest falls, 17 and 12 positions, see the United Arab Emirates and Saudi Arabia drop to 40th and 41st respectively, but still ahead of the United States. China has improved its ranking by eight places (37th to 29th). At the bottom of the ranking we find two countries which are featured in the GIPI for the first time: Nigeria and Taiwan.
Looking at the table as a whole: uu
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After a major drop in the design scores for most if not all countries between GIPI3 to GIPI4, nearly all countries have improved their overall score. The highest score is now almost back to the level of GIPI3. However, the spread between the top score (721) and the bottom score (491) has considerably widened. With no obvious explanation for this, the top design ratings are also noticeably higher than the top ratings of the other IP rights covered by GIPI5. As in the past editions of GIPI, the first seven countries are European countries, including the European Community. The European Community debuts in 1st place, closely followed by the Netherlands and Germany (with scores of 721 and 716 respectively). These three are only five points apart (so, only marginally separated) but they are 19 points ahead of the next group consisting of Sweden, Austria, Norway and France (with scores ranging from 697 to 690, i.e. again fairly close).
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Design index
Design ranking Country 1 2 3 4 5 6 7 8 8 =10 =10 12 13 14 15 16 =17 =17 19 20 21 22
70\
European Community Netherlands Germany Sweden Austria Norway France Canada Spain Ireland Switzerland Australia United Kingdom Japan Italy Hungary Singapore New Zealand South Korea Czech Republic Poland Malaysia
GIPI 5 rating
Difference in GIPI4 ranking
721 718 716 697 693 691 690 679 679 678 678 674 673 669 668 667 664 664 663 661 654 647
– 0 -2 0 +1 +1 +2 +5 0 -7 -4 -8 0 +3 +2 -5 -11 -4 -4 0 –
Country 23 24 25 26 27 28 29 30 31 32 33 =34 =34 36 37 38 39 40 41 42 43 44
Slovakia South Africa Russia Israel Turkey Argentina China Chile Brazil Thailand Mexico Vietnam Indonesia India Ukraine Colombia Egypt UAE Saudi Arabia USA Nigeria Taiwan
GIPI 5 rating
Difference in GIPI4 ranking
639 635 630 629 625 610 608 604 601 596 595 592 592 587 585 577 575 568 566 544 509 491
+1 0 +9 -4 0 +1 +8 -10 -2 -5 -1 – +1 0 -4 – – -17 -12 -25 – –
Design index
Analysis The ways in which countries give (or do not give) protection to designs vary greatly, differing much more markedly than for other IP rights. As the World Intellectual Property Organisation put it (in their 2007 annual report):
“This is a complex area, with different options for protecting designs ranging from sui generis design laws, unregistered designs and design patents, through to copyright and trademarks. Hardly any other subject matter within the realm of IP is as difficult to categorise”.
There is a mix between countries which provide protection for unregistered designs (whether by specific design rights, copyright or otherwise), and those which do not. And, where unregistered rights are available, some countries remove the rights once the design is exploited on an industrial scale (typically more than 50 items). What types of designs can be protected by design rights also varies significantly, in particular as to whether functional features qualify. When it comes to design registrations, some countries operate a simple and relatively cheap registration process; but others, such as the USA, only have a design patent system, which involves substantive examination and a correspondingly much higher cost. Even within the same category of rights, there are significant variations. For example, for registered designs, some countries operate a strict principle that, if the applicant has disclosed the design prior to making its application, the design will not be valid. In contrast; others permit a grace period of between six and 12 months such that the design will still be treated as novel provided it has been made available to the public only during that grace period.
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Design index
Factors Making comparisons in the designs field between different countries is therefore not straightforward. Nevertheless, the rankings will reflect people’s views of whether the way or ways in which one country protects designs generally is better or worse than another. It is probably not surprising the highest rankings for designs are European countries, given that Europe provides both unregistered and registered rights protection for a wide range of designs. Countries with lower rankings tend to be those where the scope of design protection is much more limited or undeveloped – for example, not providing any unregistered rights at all and/or removing such protection from industrially exploited designs, and/or only allowing registered rights for ornamental, non-functional designs. The rankings accordingly seem to reflect people attaching more importance to being able to protect their own designs than having greater design freedom to compete with the designs of others. The key considerations for businesses seem to be the range of designs which can be protected, plus costeffectiveness in relation to both obtaining rights and enforcing them. The scorings for those two factors generally correlate most closely with countries’ overall design rankings.
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Design index Notable faller The above combination is re�ected most starkly by the USA’s extremely low overall ranking (42nd), with only Nigeria and Taiwan rated lower. The USA is ranked bottom of all 44 countries for obtaining design rights and second to last for cost-e�ectiveness. The USA only protects a narrow range of designs – its system of copyright and design patents e�ectively only protects artistic or ornamental designs – and design patents are relatively expensive to obtain. Allied to that is the very high cost of litigation. In spite of the USA having joined in 2015 the Hague Agreement (an international �ling system under which a central application is made to the World Intellectual Property Organisation, designating countries where protection is required – equivalent to the Madrid system for trade marks), its overall ranking has fallen by a massive 25 places. And this comes after it falling by 12 places in our last Index.
This may be a re�ection of businesses’ hopes having recently been raised, but then dashed, regarding an increased range of designs being protected. Fashion designs, for example, are not protected on the basis that the artistic aspects are not su�ciently separable from the functional ones. At the end of 2012 (shortly before our last Index), the so-called Fashion Bill was approved by the Senate committee and placed on the legislative calendar. This would have granted three years’ copyright protection to qualifying fashion designs, and was very well received in the fashion sector. However, it has become clear that the bill has withered on the vine and no longer has any prospect of being enacted in the foreseeable future.
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Design index
Notable climbers uu
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Russia has moved up nine places to 25th. The climb is surprising as Russia has not acceded to the Hague Agreement, does not provide protection for unregistered designs and conducts a substantive examination for each design application, i.e. a search for similar designs which could deny the novelty or originality of the design application. The reason could be the newly introduced claim for statutory compensation for design infringements, in place of damages, which provides for double the amount of royalties which would have been paid in similar circumstances by a lawful user of the design. China’s rating rise (29th) can be attributed to several factors. One factor may be recent legal changes. Since 2014 it is possible to obtain design protection for graphical user interfaces, which was positively received by the business community. The same holds true for the increased enforcement activities of the State Intellectual Property Office (SIPO). It is also relatively easy to enforce design rights with Chinese online trading platforms, which may also explain China’s improvement in the enforcement section.
Europe Overall top place goes to new entrant the European Community (not ranked separately in the last Index). This is likely to be a consequence of the available registered and unregistered design rights being panEU in nature (a simple process leading to a single registration covering the whole of the EU), combined with the European approach of affording rights to a very wide range of designs. More than 80,000 EU registered designs were filed in 2015. The EU’s score for obtaining rights is significantly higher than even Germany in second place. It may also be that the increasing difficulty of obtaining 3-D shape trade marks has led to people’s appreciation of EU design rights increasing. EU design rights are also enforceable on a pan-EU basis by bringing an action in the relevant national court. The EU’s relatively lower ranking for enforcement (9th place) could be because of prescriptive rules which require proceedings to be brought in the country of the defendant (if the defendant is based in an EU country).
Design index Considering the European countries at an individual level: uu
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The high rankings for Netherlands (2nd overall) and Germany (3rd) again correlate with their scores for obtaining rights (3rd and 2nd respectively) and costeffectiveness (1st and 2nd). The Dutch courts have been known to adopt a low threshold for functional designs qualifying for copyright protection. A large volume of design cases are dealt with by the Courts in Germany, leading in turn to greater clarity and confidence. The District Court of Dusseldorf alone handles more than 100 design cases annually. France’s ranking has improved from 9th to 7th, a real rise of four places if one allows for new joiners to the GIPI tables. The French courts are sympathetic to design owners, and designs in France are cumulatively protected by both copyright and design rights. Design cases are heard by specialist Courts. There has also been a trend towards higher levels of damages being awarded. Switzerland (10th) has dropped seven places and is not among the top European countries anymore. This may be because of the rise of the European Community and its registered and unregistered designs, with Switzerland an outsider (not being a member of the EU). In addition, Switzerland does not provide protection for unregistered designs.
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Spain is notably up five places (seven places if one takes into account territories new to the Index, the European Community and Norway). It is rated particularly highly for cost-effectiveness. Due to the economic downturn, businesses have been more active in taking enforcement action to protect their market share. In addition, the Spanish Supreme Court has issued several judgements in the last three years which have contributed to a better definition of the scope of protection for industrial designs. Norway is new to the Index and ranks highly in 6th place overall. Whilst Norway is not a member of the EU, its Design Act is generally based on the same principles as EU design law. However, unregistered designs are not protected by design rights as such. Most cases involving infringement of unregistered designs are brought under the generally favourable Marketing Control Act.
Design index
Common law and Commonwealth countries uu
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The UK is a faller, down eight places to 13th overall. This is in spite of the design reforms introduced by the Intellectual Property Act 2014, which included making intentional copying of a registered design a criminal offence. The UK’s higher ranking for obtaining rights (7th) is outweighed by low ratings for enforcement (16th) and in particular cost-effectiveness (26th). The UK Courts have a reputation for not being sympathetic to design infringement cases. This has perhaps not been helped by the recent shape cases involving London taxis and the Kit Kat chocolate bar, both decided against the business claiming rights in the shapes in question, though the latter was purely a 3-D trade mark case. The Supreme Court’s decision in the Trunki case is another which will probably be seen by businesses as showing a negative court approach to design infringement cases in the UK (ironically, the decision confirming the Court of Appeal’s overturning of the first instance pro-claimant decision of the same judge who made the negative decisions in the London taxis and Kit Kat cases). However, the last Trunki decision post-dates the GIPI5 survey. The recent and very unpopular hike in Court fees (the fee for issuing proceedings now typically around £10,000) has doubtless contributed to the UK’s ranking for cost-effectiveness having dropped by a big 14 places. The flip-side is arguably that there is more of a motivation for parties to settle pre-litigation.
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Relatively speaking, it is noteworthy that both Canada and Australia rank much lower for obtaining design rights than for designs overall. This again shows businesses taking a negative view of countries which only give narrower forms of protection to designs, outweighing any benefits from more open competition. For industrially produced designs (more than 50 items), both Canada and Australia take away unregistered rights (in the form of copyright), meaning that the only protection available is through registration. By contrast, the UK has recently passed legislation (coming into effect in 2016) which will remove a restriction under which a mass-produced artistic work had its term of copyright protection reduced to 25 years, thereby extending copyright protection back to its full term of life of author plus 70 years. Official consultations have taken place with a view to improving the designs system in Australia, recommendations including giving consideration to joining the Hague system; expanding the scope of protectable designs to include virtual designs such as graphical user interfaces; introducing a grace period of six months following disclosure of a design prior to filing a design application; and bringing design infringements within the ambit of customs enforcement. Canada’s enforcement rating may have been reinforced by the 2015 decision by the Federal Court of Appeal (Zero Spill Systems v Heide), which ruled that functional design features are protectable if they are also visually appealing.
Design index Asia and ASEAN countries uu
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New entrant Malaysia comes in relatively low at 22nd place. Unlike more highly ranked countries, Malaysia does not give any real protection to unregistered designs – copyright protection being very limited – and design registration is only available for articles with eye appeal and is thereby confined to the aesthetic appearance of an article. The latter was highlighted in a recent case involving a Tropicana bottle design, where the Appeals Court invalidated the design registration on the basis that every feature of the bottle design was functional in nature. In Thailand (ranked 32nd), design protection is only available via design patents and is limited to aesthetic features. The small number of design examiners means that examination is very slow and there is a substantial backlog of applications. Online applications are not possible and there is no database of applications. It is therefore no surprise that Thailand has a low ranking. India’s ranking (currently 36th) may start to improve when practical efficiency reforms become effective and recognised. Filing of design applications can now be made online and records of third party design records accessed online. Under the Commercial Court Act, High Court cases are now to reach trial within 12 months.
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There has also been recent public consultation on design law reform in Singapore (17th). The intent is to broaden the scope of designs under the country’s Registered Designs Act, to take into account technological advances and design-related developments and thereby support the country’s ambition of becoming a design hub. This may lead to businesses viewing Singapore more favourably when it comes to designs, but that could be undermined somewhat by the decision not to introduce unregistered design rights or to change the current position whereby copyright only applies to artistic works and is lost after the “50 articles” threshold.
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Design index
Middle East and Africa
Latin America
The region has not fared well.
The �ve Latin American countries now covered by GIPI are all ranked at the low end: Argentina (28th), Chile (30th), Brazil (31st), Mexico (33rd), and Colombia (38th). The bottom third of the overall rankings can probably be attributed to the fact none of the countries is a member to the Hague Agreement. Furthermore, most of the countries do not provide protection for unregistered designs.
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It is an apparent quirk that South Africa , at 24th, ranks two places below Malaysia , for example, when its design system allows for registration of both aesthetic designs (15 years’ protection) and functional ones (10 years). This may be because there is very little jurisprudence on designs in South Africa, perhaps leading to businesses feeling uncertain about how cases would be decided. Both the United Arab Emirates (40th) and Saudi Arabia (41st) have suffered sharp declines. The already high costs for obtaining design protection in the UAE increased dramatically with the new official fees introduced in 2015. Changes are also afoot in Israel (ranked 26th). A new, modernising Designs Law, which takes a number of principles from the European Directive, is due to be introduced in 2016. A major change will be the introduction of unregistered design rights with a three year period of protection. However, this is subject to the constraint that first publication or sale must be in Israel, which will typically rule out foreign businesses – although future bilateral treaties may broaden who qualifies. The plan is also for Israel to accede to the Hague system.
Design index Taylor Wessing view – increased importance of design protection There is an increasing awareness of the importance of design rights amongst businesses, and the value of them within an overall IP portfolio. This is probably allied to the high level of product diversification and also competition which is taking place. It may also be connected with the difficulty of obtaining 3-D shape trade mark registrations. This growing awareness is reflected by the recent marked increases in design filings through the Hague international system. In 2015 there was an increase of 40% (with 7% of the total worldwide filings made by just one company, Samsung). The increased business importance of designs is also gaining the attention of national governments. The Hague system now covers more than 50 countries, including the recent additions of the United States and Japan, with Canada, China, Malaysia and Russia expected to join shortly. And several countries are in the process of updating their design laws or running official consultations on how to improve them.
Nevertheless, as noted in the Analysis section, there remains a very marked lack of international harmonization when it comes to how designs are protected in different territories. Of all the IP rights, the level of differences between design regimes around the world is particularly high, making it a complex area for businesses to understand and navigate. The countries which rank highest for design rights are those which combine the availability of both registered and unregistered protection for a wide range of types of designs with a straightforward and inexpensive registration system. When it comes to harmonization and countries considering how to improve their design laws, this sends a strong message of the factors which are considered key by the business community.
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Personal data index
Personal data index
Personal data Initial Observations Much has happened in the world of data protection since our GIPI4 report. A number of key trends can be observed from the GIPI5 findings: uu
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The table is headed by countries that either have no data protection laws in place or laws that are considered to be weak, immature or outdated, or they have not experienced any significant change resulting in an increased data protection compliance burden. At the bottom of the rankings, are those countries where either an established “tougher” data protection regime is in place or where there have been recent legislative changes relevant to data protection that have presented particular compliance challenges. The fallout from the Edward Snowden mass surveillance revelations have reverberated throughout the GIP5 rankings. In particular there have been dramatic shifts in the ranking of jurisdictions that have introduced laws seeking to exert greater access to, control for or sovereignty over the processing of personal data of their citizens.
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Almost all jurisdictions saw their scores fall, with the biggest drops occurring at the bottom of the table. This points to the cost of data protection compliance generally having increased since GIPI4. This is probably the result of new laws being introduced to deal with the challenges to the integrity of data processing arising from a combination of advances in technology, enhanced security threats and increased state surveillance.
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Personal data index
Personal data ranking Country 1 2 3 4 5 6 =7 =7 =9 =9 =9 12 13 =14 =14 =14 17 =18 =18 20 =21 =21
82\
Taiwan Malaysia South Africa Indonesia Thailand Chile Colombia Vietnam Nigeria USA United Arab Emirates Singapore New Zealand India Canada Mexico Czech Republic Turkey Egypt Israel Saudi Arabia Poland
GIPI 5 rating
Difference in GIPI4 ranking
622 534 527 521 510 506 502 502 501 501 501 500 499 498 498 498 497 495 495 492 491 491
+10 0 +11 +11 +14 +17 +24 +21 -13 +18 -7 -4 -11 -3 -2 -11
Country 23 24 =25 =25 27 28 =29 =29 31 32 =33 =33 35 36 37 =38 =38 40 41 42 43
Australia United Kingdom Ukraine Hungary Japan Slovakia Brazil Norway Spain Sweden China Ireland Switzerland Argentina Netherlands South Korea Austria Italy Germany France Russia
GIPI 5 rating
Difference in GIPI4 ranking
490 486 484 484 481 478 477 477 475 474 473 473 472 470 469 467 467 459 456 453 448
+3 -3 -13 -16 +3 -15 -27 -11 +1 -23 -8 -5 -32 -8 -10 -16 -36 -6 -19 -40
Personal data index
Analysis Two important trends are reflected in the view from the bottom of the table.
Data protectionism Whilst online and cloud-hosted processing was previously perceived as merely offering convenience and economies of scale, it is increasingly seen as also creating risk. This has led various jurisdictions to take a more national, or regional, protectionist approach to the personal data of their citizens. The risk arises from this data being held or processed on servers located in another jurisdiction and where the legal protection in the two jurisdictions is not equivalent. There may be a difference in the substantive laws but risk arises equally if there is a difference in their observance or in practice, e.g. as to the amount of regulatory supervision or as to the degree of restraint on the state’s surveillance activities (usually justified as necessary to tackle serious cyber risks or terrorism). One respondent summed up the key issue as “the increasing global tension between state and law enforcement access to personal data in order to fight crime and prevent terrorism and safeguarding the privacy rights of individuals.” The EU is one (collective) jurisdiction that has gone down this path. These issues were manifestly made public when the EU/US mutual “Safe Harbor” regime came under scrutiny in the wake of the revelations by Edward Snowden. These revealed mass surveillance of the data of the citizens of countries around the world by the US intelligence agencies. While the European Parliament called for Safe Harbor’s suspension, the EU Commission sought to renegotiate terms with the
USA. Meanwhile, an Austrian student, Max Schrems, had issued proceedings against Facebook Ireland for failing to protect his data. His claim was that Facebook’s servers are located in the USA and the USA offers no real protection of EU citizen data against State surveillance. The case moved more swiftly than the Safe Harbor renegotiations and, in October 2015, a shock judgment from the Court of Justice of the European Union (CJEU) pre-empted their outcome. It effectively ended data transfers under Safe Harbor and, indirectly, cast doubt on other data transfer mechanisms to the USA. This highlighting of perceived deficiencies in its data protection caused the USA to climb from being twothirds of the way down the table (at 24th place) to being less than a quarter of the way down it (9th place) – see page 87. The Snowden revelations have had wider ramifications. They have, directly or indirectly, led a number of the biggest movers in the GIPI rankings to likewise introduce laws seeking to control or protect the processing of the online personal data of their citizens. The methods and the motivations for doing so differ from country to country. However, the overall effect, in terms of inconsistent local approaches, and the effect this has on global data flows and international cooperation are the same.
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Personal data index
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Russia experienced the most dramatic fall in the Data Protection index. It dropped 40 places, from near the top to the very bottom of the table. A significant fall could have been expected as a result of its heavier enforcement of the law and higher levels of complaints to the Roskomnadzor, its data protection authority. However, the fall has clearly been compounded by the coming into force, in September 2015, of the Russian Data Localisation Law. This requires data operators processing personal data of Russian citizens to do so only on servers located in Russia. It has had a significant impact on both Russian and international businesses with online operations. The law has been viewed as part of a broader political objective by Russian authorities after the Snowden revelations, namely to exert greater sovereignty over the use within Russia of the internet, to facilitate access to local traffic data by Russia’s security services and to restrict the surveillance capabilities of others, in particular the US security services.
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China has been equally sensitive to data integrity issues following the Snowden revelations. The passage of the new Counter-Terrorism Law reflects that agenda. The original proposal had been to require all telecommunication operators and ISPs to set up technical interfaces and submit encryption solutions to enable invasive audits by the government. In addition, their equipment and data concerning domestic users would have had to be kept within China. This proposal met with significant criticism internationally and, as a result, the data localisation and encryption review requirements were dropped. The law entered into force in the early 2016. Despite this, the Chinese government retains significant discretionary powers and further proposals for a cybersecurity law (see also below) reintroduce a proposed requirement that key information infrastructure operators store citizens’ personal and other key data within China. Clearly China’s approach in this respect will no doubt develop further in 2016 and Western businesses will need to take particular care about compliance issues in China under any new legislation.
Personal data index uu
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Brazil likewise saw a material drop in rank from 2nd in GIPI4 to 29th in GIPI5. This is a drop of 27 places. This is harder to explain given that Brazil has yet to introduce specific data protection laws. However, it may owe something to the adoption, in April 2014, of its landmark law on internet rights and governance, the Brazilian Regulatory Framework for the Internet (known as the “Internet Bill of Civil Rights”). This intended to regulate the processing of personal data by ISPs and operators of social media sites and search engines. Following the Snowden revelations, there was a last minute proposal to force data centres to be kept in Brazil but this was dropped from the final law. Italy fell 36 places in the table. The reasons for this are not entirely clear. One likely factor and relevant to this issue was the Garante resolution adopted at the end of 2013. This required call centre operators based outside the EU to tell end users where the call centre is located and to enable them to choose instead to speak with an operator based in Italy. Germany remains one of the toughest jurisdictions when it comes to data protection law compliance. As a result, it has permanently occupied a spot at the bottom of the data protection table. The Snowden revelations and the collapse of Safe Harbor has led a particular outcry in Germany and certain German regulators have been speaking out against and investigating transfers of data to outside of the EU, especially to the US.
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Data security Nearly all the countries found at the bottom end of the table have implemented tougher requirements in recent years around security, incident response management or breach reporting to the local data protection authorities and affected data subjects. New legislation in Germany which has either been introduced in the past year or will come into effect in 2016 will place further burdens on companies or create the risk of additional regulatory orders or fines including measures for increased IT security measures for critical industry sectors. Italy has introduced a 24 hour breach notification obligation relevant to biometric data in addition to its existing breach obligations relevant to those in the telecommunications and banking industries and, in Austria, breach reporting obligations to data subjects exist under the data protection law. An amendment to the law in South Korea in 2015 provided the possibility of court awarded damages for breaches leading to the loss, theft, leakage, forgery, alteration or impairment of personal information of up to three times the damages caused by the breach.
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Most notable perhaps are the stringent enhancements to the existing breach reporting law in the Netherlands that were brought into force from January 2016. These require all data controllers subject to data protection law to immediately notify the Dutch data protection authority (the CBP) and affected individuals of any security breach that have or are likely to have serious adverse consequences for the protection of personal data. Enhanced fining powers for CBP for more serious breaches of the law include an ability to impose an administrative fine equivalent to 10% of the net annual turnover of the company in the preceding year. Returning to China, the developing response of China to cyber security risks can be seen in the proposal in July 2015 for a draft Cyber Security Law. The proposed law includes provisions on data and network security and a requirement for key information infrastructure operators to store citizens personal and other key data within China.
Personal data index The top of the table Sitting on the top of the table are Taiwan along with Malaysia ranked second and South Africa ranked third. Taiwan and Malaysia are both new entrants to GIPI, with the former materially ahead in terms of its score. All three countries have data protection laws but in each case the laws are still in the process of developing. Taiwan has no data protection authority and there are areas of the law that have been subject to amendments but, at the time of writing, these have not yet come into effect. It is still early days for the data protection law in Malaysia. The law has yet to define whitelist designations for data transfers and there is no evidence to date of enforcement of the law or the creation of a Tribunal as provided for by the law. South Africa has data protection laws dating back to 2013 in the form of its wide-reaching Protection of Personal Information Act. However, there has been a staged implementation of the law and, a reason for its move up the table is most likely down the lack of enforcement. Material aspects of the Act are not yet enforceable. Even though the Act envisages various enforcement mechanisms, there was to be a one-year grace period after the point the provisions come into force, which may be extended by any additional period not exceeding three years.
It has also been turbulent times for the United States (9th). The past few years have been marked by major cyber security incidents, enforcement actions addressing various privacy issues, global political outcry over US intelligence surveillance activities and the invalidation by the CJEU of the Safe Harbor scheme facilitating the transfer of personal data from the EU to the USA. This has culminated in multiple initiatives of the American government to strengthen its position in the privacy arena. The jump up the table by Singapore is a bit surprising. The main and subsidiary data protection laws in Singapore were enacted in 2012 and 2013 and resulted in a sudden fall in the rankings for GIPI4. 2014 and 2015 have however been more about consolidation, with the only significant legislative changes during this period being enhancements to the established base provisions. Much of the focus of activity by the Personal Data Protection Commission (PDPC) has been on issuing advisory, guidelines to help organisations to better understand their compliance obligations and on the manner in which the PDPC interprets the provisions of the Personal Data Protection Act of Singapore (PDPA) relating to the enforcement of the PDPA. The PDPC views compliance with the data protection obligations under the PDPA and the Commission’s directions very seriously. There have been some enforcement actions in respect of breaches of the Do-Not-Call rules and more recently (April 2016), the PDPC issued enforcement decisions against 11 organisations for various breaches of the PDPA.
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Europe
South America
Data protection is well established in Europe with member states implementing laws reflecting common baseline requirements through their implementation of the 1995 EC Data Protection Directive. It is, therefore, unsurprising to find nearly all member states are mid table or below, with the first batch being the Czech Republic (17th), Poland (21st), the United Kingdom (24th), and Hungary (25th). The absence of any marked change in the ranking of the United Kingdom from GIPI4, potentially reflects the fact that the current law has not changed significantly in recent years and is a known quantity, despite respondents pointing to the continued high cost of dealing with subject access rights. One respondent referred to the “heavy cost of subject access rights creates a challenging financial and administrative burden on certain data controllers”.
Data protection is becoming very much a hot topic in South America with noteworthy moves down the rankings for Argentina, Brazil and Mexico. The exception to this trend is Chile.
However, because the Directive sets only a minimum set of rules, there is a range of current national implementing laws around the EU. These have created a patchwork of different standards, requirements and sanctions. This lack of harmonisation has, in turn, created a compliance burden for businesses operating across different European markets. In respect of Spain for example one respondent pointed to how “tiered security requirements are not harmonised with other jurisdictions requiring businesses to address these requirements separately”.
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Chile was one of the first Latin American countries to enact data protection laws, with its Data Protection Law No 19.628 (DPL) 1999. Its rise to near the top of the table reflects the fact that only minor updates have been made to that law since then. This leaves the law looking out-dated and ineffective alongside some of its Latin American neighbours. It is particularly noticeable that Chile lacks a data protection authority to enforce data subject rights or supervise the compliance of data users. We may see a fall in the table for Chile in future reports since a new data protection law, with stronger European style protections, is in the pipeline. The draft law has not yet been presented to Congress so may not be imminent. As drafted it would include provision for a data protection regulator that would have the power to impose tough sanctions and significant financial penalties.
Personal data index Taylor Wessing view - high stakes in Europe The focus of much attention in Europe since 2012 has been the progress of the data protection law reform package and, in particular, the EC General Data Protection Regulation (GDPR). This reform process has led, at the time of writing, to the final adoption of the text of the GDPR in April 2016. The new law is now anticipated to enter into force during the summer of 2018. The objective of the GDPR is the further harmonisation of the law in this area (a regulation has direct effect throughout the EU and, unlike a directive, does not need local implementation). Certainly, the GDPR significantly raises the bar on current compliance obligations. It introduces new concepts, rights for individuals, obligations for both data controllers and data processors as well as Europe wide breach reporting obligations. There are also significant penalties for non-compliance, with maximum penalties of 4% of annual global turnover or up to 20m Euros (whichever is higher).
Respondents are already mindful of the impact on businesses of this transition with one pointing to the “heavier burden on data protection compliance as the vast majority of industry upscales to the new EU DP Regulation”. We anticipate the GDPR will be reflected in future GIPI reports with a further slide down of the midtable EU countries and a greater alignment of scores for the EU countries included in GIPI (presently 13).
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Appendix
Appendix We would like to thank all the respondents that took the time and trouble to provide their answers, which made for very interesting reading. This survey was our biggest yet and we are very grateful for all the input we have.
The results are the statistical output from a worldwide survey of IP owners and users giving over 8,500 assessments, as weighted bearing in mind data from 61 objective sources (or ‘instrumental factors’). The research and writing of this report has been undertaken by members of the international IP and Data Protection teams from across all of Taylor Wessing’s offices and across the ASEAN+ network. These include: uu
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Austria – Sabine Andreasch, Martin Prohaska, Andreas Schütz, Bernhard Schörghuber China – Thomas Pattloch Czech Republic – Karin Pomaizlová, Ráchel Tošnerová France – Siv-Huor Ou Hungary – Orsolya Banki, Torsten Braner Indonesia – Endang Paramitha Sapardan, Linna Simamora Germany – Wiebke Baars, Malek Barudi, Britta Bröker Matthias Hulsewig, Ortrun Guenzel, Britta Heymann, Thanos Rammos Malaysia – Jolene Lee Miao Chi, Marlyn Abdul Malik Perone Netherlands – Maarten Rijks Poland – Marcin Przybsz, Przemyslaw Walasek Singapore – Rizwi Wun
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Slovakia – Tomáš Korma, Ján Lazur, Radovan Pala, Eva Smoleňová Thailand – Phatthrawat Nakaranuruck, Rajen Ramiah Ukraine – Svyatoslav Maksymchuk, Olena Stakhurska UAE – Candice Cothill UK – Sally Annereau, Arianne Bryan, Paul England, Roland Mallinson (editor), Mark Owen, Jason Rawkins, Adam Rendle, Emma Sagir, Mirena Taskova Vietnam – Phung Thi Huong Giang, Dang Phuong Le
GIPI online The Taylor Wessing Global IP Index has its own dedicated section of the Taylor Wessing website complete with interactive maps which include detailed analysis on all 43 jurisdictions covered within the report. You can also download an e-book of the report and request a hard copy. www.taylorwessing.com/ipindex
If you have any questions about or comments on this GIPI report, or any of our previous reports, please either contact your Taylor Wessing contact, any member of the report team or Roland Mallinson as editor of the report.
Roland Mallinson Partner +44 (0)20 7300 7081
[email protected]
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About us Taylor Wessing is a full-service international law firm, working with clients in the world’s most dynamic industries. We take a single-minded approach to advising our clients, helping them succeed by thinking innovatively about their business issues. Our focus on the industries of tomorrow has enabled us to develop market-leading expertise in: uu uu uu uu
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At Taylor Wessing we are proud of our reputation as a forward-thinking firm. We support clients wherever they want to do business. Our 30 offices around the world blend the best of local commercial, industry and cultural knowledge with international experience to provide proactive, integrated solutions for our clients.
Our market leading, award winning, IP and Data Protection team is made up of over 150 lawyers across the world. We advise clients on a wide range of IP and data protection issues through the full cycle of their business and from a broad spectrum of sectors, including pharmaceuticals, technology, media, publishing, fashion and consumer goods. All of our teams have excellent technical capability and many members have previously worked in-house, enabling us to have a better understanding of our clients’ needs and issues, from their perspective. We pride ourselves on being thought leaders and continually deliver innovative products and tools to our clients. Some of our IP and data protection tools include: Taylor Wessing Patent Map (www.taylorwessing.com/ patentmap) – allows you to compare patent litigation regimes across Europe On Your Marks, Get Set….Europe! (www. taylorwessing.com/getseteurope) – a comprehensive brand protection guide for anyone planning a business extension into, or expansion within, the European Union (EU) Global Data Hub (www.taylorwessing.com/ globaldatahub) – insight and guidance on data protection issues. Our in-depth analysis, news updates and events will help you navigate the minefield of global data protection law.
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© Taylor Wessing LLP 2016 This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific circumstances or to constitute legal advice. Taylor Wessing’s international offices operate as one firm but are established as distinct legal entities. For further information about our offices and the regulatory regimes that apply to them, please refer to: www.taylorwessing.com/regulatory.html TW_001741_06.16_version 2.0
