Speeches and Presentations

SCED's speech at Business of Intellectual Property Asia Forum

Following is the speech by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Business of Intellectual Property Asia Forum today (December 7):

Fred (Lam), distinguished guests, ladies and gentlemen,

Good morning. It is my great pleasure to join you all today at this very exciting event bringing together elite professionals and business leaders from around the world to discuss the latest developments in the realm of intellectual property, and to explore a new frontier for business.

Intellectual property, or IP for short, is a great human invention as a legal vehicle for knowledge transfer and protection. It rewards creativity, and incentivises innovations in various forms, including technologies, know-how, creative expressions, designs and brands.

It might be trite to say that innovation is a driver in economic growth and development, but nothing else is closer to the truth in this globalised economy today -

* goods are designed and produced drawing from physical parts and intangible inputs from places far away from home,

* talented people are moving from city to city, country to country, and continent to continent to excel themselves, and

* information is transferred and transmitted in split seconds across the globe through the Internet.

More than ever in history, firms and economies are competing on the strength of open innovation.

The globalised innovative process has set a sea-change to the world's IP landscape. The first manifestation is the intensified use of the IP system to unprecedented levels over the last two decades. According to the World Intellectual Property Organization, world demand for patents has risen from 800,000 applications in the early 1980s to 2 million in 2010, with the subsequent filings abroad one of the key drivers of the growth. Trademark applications worldwide jumped from 1 million a year in the mid-1980s to 3.6 million in 2010.

Another sign is the change in geographic balance in the demands for IP rights. From 1995 to 2009, the share of global patent applications from the United States, Europe and Japan altogether dropped from 77 per cent to 59 per cent, while China's share alone has grown from a meagre 1.8 per cent to 17 per cent. During the same period, China's share of trademark applications worldwide rose from less than 10 per cent to over 25 per cent, at the expense of advanced economies.

A third, important observation is the increased tradability of IP across borders. Take international royalty and licensing fees as an example. The receipts increased, in nominal terms, from US$2.8 billion in 1970 to some US$180 billion in 2009. Many new market intermediaries are emerging in tandem, such as IP brokerages, auctions, clearinghouses and exchanges, lately using novel ICT (information and communications technologies) and business models for matching IP buyers and sellers and monetising IP rights. Knowledge is for sale, innovative sale.

With innovation firmly in the driver's seat of economic development, the above trends in the IP landscape are likely to continue relentlessly, translating into huge business opportunities for first movers who have the heart to take on the challenges in the still nascent knowledge markets.

For those of you who have travelled far or near to here today, or call Hong Kong home, the call is obvious. Mainland China will continue to be the engine of growth of the world economy and have a great appetite for IP obtained from indigenous research and development efforts as well as acquisitions from abroad. Following their Western counterparts, Chinese firms are increasingly seeing IP as a core business asset that should be built, managed, valued and leveraged strategically to drive innovation and growth.

With such a vast Mainland market, there is already a huge demand for not only traditional market intermediaries such as agents of patents and trademarks, lawyers and accountants, but also new collaborative mechanisms and IP intermediaries that can provide services ranging from IP management, IP trading mechanisms, IP portfolio building to licensing, financing, valuation and arbitration.

As always, Hong Kong plays an indispensable, strategic role as a premier gateway to Mainland China. Market forces have already seen to it that significant IP trading activities are happening in Hong Kong. As a regional platform for technology transfer, Hong Kong exported US$1.1 billion in technology to Mainland China in 2010. That put Hong Kong sixth in the world in taking technology to the Mainland.

Hong Kong is also a frontrunner in the trading of IP rights embedded in goods and services, with increasing emphases on design and creativity. This forum today is indeed a key part of the prestigious Business of Design Week as the finale of Hong Kong Design Year which the year 2012 is designated.

Hong Kong boasts a large pool of bilingual and experienced professionals who provide a comprehensive range of IP services and are adept at meeting changing market demands. We have put in place a robust IP regime to protect the fruits of creativity and innovation, in full compliance with the requirements of international IP treaties. To ensure that our patent system complements our efforts to develop Hong Kong into an innovation and technology hub, a comprehensive review is underway.

And together with our sound financial and legal systems, a low-tax regime and world-class service industries, Hong Kong is fully equipped to pioneer new frontiers in the evolving IP landscape. The Government is committed to facilitating and promoting Hong Kong as a regional IP trading hub. Our Intellectual Property Department is reaching out to all relevant sectors to champion the cause.

The Hong Kong Trade Development Council (HKTDC) is also stepping up efforts on all fronts. Its IP portal, launched in 2012, serves as a one-stop shop for industry players to conveniently access local and foreign IPs for commercialisation and identify suitable service providers in Hong Kong. To connect IP players around the globe, the HKTDC has forged strategic partnerships with overseas IP trading platforms, such as IP Marketplace in Denmark, China Technology Exchange in Beijing, the Shanghai Technology Transfer Exchange, and the Association of University Technology Managers based in the USA.

Ladies and gentlemen, Hong Kong thrives on trade. It is something in our life blood. Since its humble beginning as a trading outpost, Hong Kong has been an entrepôt in different senses at different times, punctuated by a brief industrial interlude. We add value to physical goods that flow through Hong Kong, bridging buyers and sellers. We provide a conduit for capital of whatever currency denomination to race to where the value lies. Into a new era which trades intangible knowledge with equal rigour, Hong Kong can only play an even larger role in its finest traditions.

Against this backdrop of a modern entrepôt with an intellectual twist, I am confident that today's Forum will inspire fresh ideas and bring in new business opportunities. We welcome players local and international with different IP expertise to join the fun in this exciting knowledge marketplace.

I wish the Forum great success, and to participants from overseas, a very fruitful and enjoyable stay in Hong Kong.

Thank you.

Friday, December 7, 2012