The SEA pharmaceutical market presents both opportunities and challenges that require SMEs to have a solid IP strategy to ensure their business’ upswing. After identifying the different types of intellectual property rights (IPR) and building an IPR portfolio, your first step should be having your IPR registered, followed by taking measures to protect your rights through enforcement. This article will focus on preventing IP-infringing pharmaceutical products from entering the market by working with customs authorities and taking steps to mitigate parallel imports.
- Enforcement with the help of customs
In SEA, customs represent one of the primary enforcement measures in combating counterfeit and smuggled drugs. For example, the Philippines Customs seized 30 million pesos’ (approximately EUR 484,494) worth of counterfeit medicines made in imitation of famous brands in 2022. In Singapore, 1,520 pieces of illegal medicine were seized by customs at the Johor Causeway Bridge Woodlands checkpoint that links Malaysia to Singapore in 2021.[1]
In SEA, besides carrying out border enforcement measures by requesting to seize potential infringing goods for inspection, customs can proactively take measures while performing their duties when they find any goods suspected of infringing IPR. For example, Singapore has an ex-officio seizure where customs will seize goods that are “reasonably suspected of infringing a registered trademark, a copyright or a registered geographical indication” and will notify the IP owner later.[2]
It is advisable to coordinate with the customs of the targeted country where you have a registered IPR. As pharmaceuticals are part of a complex field of industry, it is usually difficult for the officers to assess the imported products by their ingredients or appearance. Therefore, they would conduct the very first examination of products by focusing on trademarks that are visible on the packaging or import/export listings. It is recommended to perform regular training for customs officers, with the help of a local law firm. This will keep them updated about the specificities of authentic products and facilitate their assessment (for example, by sharing the list of authorised distributors or by mailing samples of original products and packaging).
Several countries in SEA, such as Indonesia, Thailand, the Philippines, and Vietnam, have trademark recordal systems through which you can record your trademarks in the customs database for a limited period (with the possibility of renewal). Under these systems, customs officers may seize suspected counterfeit goods if, with reasonable grounds, they believe a trademark is being infringed (or another type of IPR, depending on the country). This helps to save time and increases efficiency as there is no need to wait for the official owners or their representatives to notify customs for further action. Customs from Vietnam and Thailand have proven to be highly effective as they consistently make seizures, whereas the Philippines rarely seize goods that are possibly infringing brands recorded in its system. In Indonesia, only a few seizures were carried out due to a modest list of records under the recently established recordal system.[3]
Customs oversee and prevent the access of infringing pharmaceuticals to the region, but they need your constant support. As the procedures to handle potentially infringing goods and customs regulations may differ among the countries, seeking help from a local IP expert is recommended.
- Handling parallel import
When speaking about the pharmaceutical industry, one cannot forget to mention the issue of parallel import (where goods are imported into and sold in one market without the trademark owner’s consent in that market).[4] This is a vital topic for enforcement matters of pharmaceutical products which cannot be neglected.
As of today, the regulation of parallel import differs across SEA. Vietnam and Indonesia allow the parallel import of pharmaceutical products, whereas in Singapore, parallel import is permitted only if the product has been sold or distributed in its territory by or with the consent of the patent proprietor or its licensee. Although Thailand does not have specific regulations on parallel import, it is not legal in the pharmaceutical sector. In Cambodia, it is strictly prohibited. Laos’ IP Law has provisions that prevent parallel import; however, in practice, it seems that the prohibition is not consistently applied as the authorities generally view parallel imports as beneficial to consumers.[5]
Allowing parallel import means you cannot prevent third parties from importing your products through an unauthorised route (not your contractual distribution channel) in those jurisdictions. Harm may be done if those imported goods are of low quality or are adulterated with bad-quality ingredients, resulting in major damage to your reputation. An effective way to prevent these risks is to take the necessary steps to strictly monitor the distribution process, for example, by having strict requirements in the distribution contract or performing random tests to assess quality standards.
Besides the above, SMEs should also consider administrative actions to enforce their rights. Generally understood, this type of enforcement measure refers to actions filed with “an administrative body using its executive authority rather than with a court of law”. In SEA, IP disputes may be resolved through administrative actions in seven countries: Cambodia, Indonesia, Laos, Myanmar, the Philippines, Thailand, and Vietnam. For more details, please refer to our guide on the subject.
- Take away messages
The above-mentioned tips provide guidance on protecting your IPR for pharmaceutical development in SEA. However, it is important to start planning your IP strategy early, even before you enter the market. Generally, to effectively safeguard your IPR in this region, your strategy should include three phases:
Phase 1: IP knowledge
- Learn about your IPR and know how to protect them.
- Conduct an IP audit to identify your IPR and assess the risks of infringement.
- Utilise the South-East Asia IP SME Helpdesk services to seek preliminary advice on IP strategy, IP-related publications, and regular training.
Phase 2: IP protection
- File for IPR protection in the relevant jurisdictions at an early stage.
- Maintain your IPR by renewing them on time (if allowed) and take proactive measures to prevent infringement, such as implementing a strict confidentiality policy among your employees or including IP clauses in license contracts.
Phase 3: IP enforcement
- Be aware of the enforcement options available in case of IP infringement and take appropriate legal actions.
- Coordinate with customs to prevent the entry of infringing goods.
- Monitor the distribution process to avoid unauthorised distribution in your target country and perform a necessary assessment to deal with challenges that may arise from parallel import.
Keep in mind that securing your IPR in relation to pharmaceuticals can be a challenging process that demands a significant amount of time and effort. Therefore, seeking the assistance of local IP experts is highly recommended. You may refer to our list of External IP Experts that support the South-East Asia IP SME Helpdesk here.
For confidential, jargon-free, first-line IP advice, plus training, materials, and online resources about SEA, visit our website at www.sea-iphelpdesk.eu or send your IP-related questions to expert
sea-iphelpdes [dot] eu (expert[at]sea-iphelpdes[dot]eu). You will receive a reply within three working days.
[1] https://rouse.com/insights/news/2023/pharma-and-consumer-health-product-counterfeiting-across-south-east-asia
[2] https://www.customs.gov.sg/businesses/border-enforcement-of-intellectual-property-rights/quick-guide-for-copyright-and-trade-mark-owners-and-licensees/
[3] https://rouse.com/insights/news/2023/pharma-and-consumer-health-product-counterfeiting-across-south-east-asia
[4] https://www.inta.org/topics/parallel-imports/
[5] https://www.tilleke.com/wp-content/uploads/2021/10/2021-Parallel-Import-Enforcement-in-Southeast-Asia.pdf?utm_source=mondaq&utm_medium=syndication&utm_content=inarticlelink&utm_campaign=article
Details
- Publication date
- 11 October 2023
- Author
- European Innovation Council and SMEs Executive Agency