The "Next" IP Disputes in Southeast Asia Will Not Be Like the Past Ones
Introduction: Disputes about intellectual property in Southeast Asia have for decades had a consistent set of characters: counterfeit products moving through porous land borders, pirate DVDs traded through open-air markets, and trademark squatters who register Western brands before legitimate holders enter the market. The environment for the enforcement of such laws is informed by physical geography, inadequate customs agencies, and diplomatic pressures exerted through bilateral channels from trading partners in the West.
This old world order is quickly becoming outdated. Southeast Asia is currently experiencing a technological revolution of unparalleled scale — with more than 460 million people online, a flourishing e-commerce industry forecast to grow past USD 230 billion by 2026 , and a burgeoning start-up community working on artificial intelligence and technology . The technological innovations that will arise from this revolution will create an entirely new category of IP dispute — one that will be characterized by content generation and platform-mediated dissemination of content across porous data spaces rather than porous land borders .
This blog discusses the structural changes that will influence IP disputes in Southeast Asia, the laws that will govern these disputes, and the difficulties that courts, legislatures, and practitioners will have to face when enforcing them. The future generation of IP disputes among the countries of Southeast Asia is likely to revolve around three key areas: (i) disputes involving AI-generated content and infringement; (ii) online liability for IP infringement issues; and (iii) the new digital trade obligations under RCEP.
Applicable Legal Provisions
A. Regional and International Framework
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) supervised by the World Trade Organization (WTO) and the Berne Convention for the Protection of Literary and Artistic Works are the international instruments of intellectual property which are applicable to the whole Southeast Asian region.
The regional framework is the ASEAN Framework Agreement on Intellectual Property Cooperation (1995) which was later supplemented by various Action Plans including ASEAN IPR Action Plan 2016-2025.The ASEAN IPR Action Plan sets out the objectives in relation to IP commercialization, cooperation in IP protection and IP in digital economy but is non-legally binding and does not provide a dispute settlement procedure .
The most significant new act affecting the IP obligations in the region is the RCEP, currently being implemented in all ten ASEAN countries, plus Australia, China, Japan, South Korea and New Zealand. Chapter 11 of the RCEP provides for a wide-ranging discussion of IP rights, including IP rights on geographical indications, plant varieties, IP rights for trade secrets and enforcement of IP rights. The provisions of Article 11.7 are of particular interest, as it mandates that the parties put in place effective border level measures; Articles 11.68-11.77 focus on IP enforcement in the online environment.
B. Domestic Regimes (Selected Jurisdictions)
Domestic IP laws of the Southeast Asian nations are inconsistent. In Singapore, which has the most developed intellectual property law framework of the region, the Copyright Act 2021 was adopted, introducing the technology-neutral approach to authorship and adding the exception for data analysis using computational means. The key to note is that the Singapore Copyright Act does not protect any work that is the creation of an artificial intelligence system but not authored by humans.
In Indonesia, the traditional notion of authorship is reflected in two legislations, namely, Law No. 20 of 2016 on Trademarks and Geographical Indications and Law No. 28 of 2014 on Copyright. Furthermore, the Government Regulation No. 71 of 2019 regarding Electronic Systems and Transactions imposes some obligations on an Electronic System Operator (including a platform operator) to remove access to the copyright infringing content – introducing the pre-existing notice and takedown obligation under RCEP.
Vietnamese Intellectual Property Law (Law No. 50/2005/QH11, as amended until 2022) was substantially changed in 2022 in order to implement Chapter 11 RCEP requirements .
There are some older IP laws in Thailand, Malaysia and the Philippines which have been made somewhat progressive. In Thailand, there were some proposed amendments to the Copyright Act, B.E. 2537 (1994) and the Trademark Act, B.E. 2534 (1991), but no amendments have been made in Parliament. In the Philippines, the Republic Act No. 8293 of 1997 was amended by the Republic Act No. 10372 of 2013.
Legal Analysis
A. AI-Generated Content: Authorship Vacuum
This new development in AI has ushered in whole new challenges for copyright law, namely whether the outcome of such AI is eligible for copyright protection, and if so, who can claim the rights. Under the general rule, copyright will not be available in Southeast Asia if the work was produced by a human being. While TRIPS does not require authorship as it leaves this question to domestic law, Berne Convention, like TRIPS, also rests protection on authorship of human being. Unless there is specific legislative intervention in this regard, the Courts in the region would be bound to follow the regular standards of human authorship.
The ramifications are real. An AI algorithm, trained on copyrighted materials, may create output material similar enough to be considered infringing. The liability issue of such training data on the one hand and the issue of originality of the generated content on the other arise here. Litigation has been filed over the training of large language models and image generation systems using scraped materials from the Internet, which include copyrighted works, both in the US and in Europe. As for Southeast Asia, no case law has been created on AI training data liability issues, although litigations may be expected considering the presence of AI companies in the region.
Three specific perspectives can be identified in the literature surrounding AI-generated works.
First, it is argued that there should be a special kind of protection granted for such creations on the grounds that encouraging AI development fulfils the same policy objective as granting copyright protection. Second, it is said that AI-generated works must go into the public domain right away because of the lack of human creativity in the creation of such works. Third, an intermediate perspective has emerged, which says that works created using AI should be protected based on how much human creativity was involved in the process of creation of the work. In their decisions, UK courts seem to adopt this perspective when interpreting the exception clause provided in Section 9(3) of the Copyright, Designs and Patents Act 1988.
In Southeast Asia, the policymakers must adopt one of the perspectives discussed above in the absence of any clear international consensus. The way Singapore has handled the issue of copyright protection of AI-generated works is the most explicit piece of legislation in the region.
B. Platform Liability and Digital Enforcement Framework
As e-commerce platforms like Shopee, Lazada, Tokopedia, and TikTok Shop have emerged as the predominant channels for doing business in Southeast Asia, the landscape of IP and counterfeiting litigation has been entirely redefined. Fake products do not need a physical market anymore; all they need is to list the product online, pay through some payment portal, and arrange shipping. Therefore, the issue of liability of the platform in respect of IP infringement by its third-party seller becomes one of the most commercially relevant IP law issues in the region.
In Southeast Asia, the prevailing framework for platform liability consists of the following two frameworks: notice-and-takedown framework and actual knowledge framework. According to the notice-and-takedown framework, a platform would not incur secondary liability if it promptly deletes infringing content when notified. As per the actual knowledge framework, a platform would incur secondary liability where it was aware or had reasons to believe about the infringement but did not do anything.
Vietnam’s 2022 amendments to its IP Law make specific requirements of intermediary service providers such as making efforts to avoid repeat infringements and appointing a contact point in the country to receive IP infringement complaints. Indonesian Government Regulation No. 71/2019 makes it a duty of operators of electronic systems to take down any content which infringes the law after receiving a notice from the government in 14 hours.
It is evident that there is a conflict between liability of the platform and innovation policies. The imposition of pre-notification monitoring duties of platforms, in effect, makes it costly to comply and gives an unfair advantage to larger global platforms against smaller and local platforms. In case of purely notice-and-take down systems, infringers can easily list again their products using a different account or keywords (whack-a-mole).
A further issue that comes into play is the use of AI by the rights holders as well as the platforms themselves as a means of enforcing copyrights – automatic content recognition software that identifies copyright-infringing items before they can be seen by consumers. However, the implementation of such technology poses its own issues, including the danger of over-blocking (misidentification of non-copyrighted material), due process for sellers whose listings have been blocked, and liability of the platform which incorrectly implements such technology.
Digital Trade Responsibilities and RCEP Chapter 11
RCEP marks a qualitative leap forward in the regional legal framework governing IP issues. In contrast to previous trade agreements signed by ASEAN, RCEP provides obligations regarding the enforcement of rights in the digital domain (Articles 11.68–11.77), a cooperation framework on IP enforcement, and rules on the transparency of IP legislation.
According to Article 11.68 of RCEP, all parties undertake to ensure that there are procedures in place which allow right holders to obtain prompt action concerning any infringement of IP rights conducted in the digital online space. Article 11.69 concerns the issue of liability of the online service provider, obliging the parties to provide legal incentives for OSPs to cooperate with right holders in preventing IP infringements. At the same time, this article contains limitations of the liability of OSPs in case certain conditions are met.
The importance of the RCEP at this particular time lies in the fact that it will establish a common minimum level of digital IP enforcement obligation on all ten ASEAN member countries simultaneously. This is unique. Before RCEP, there were vast differences between the various countries regarding the enforcement obligations and some had very well-developed systems whereas others had virtually nothing in place. The application of the RCEP will thus bring about an era of legislative changes domestically as illustrated by the situation in Vietnam which may result in litigation in the future.
Non-Fungible Tokens, Metaverse, and Future Frontiers
Apart from AI and platforms, there are two additional issues that are emerging and starting to create IP disputes for Southeast Asian legal systems to grapple with. First is the emergence of non-fungible tokens (NFTs), which are essentially used to create and trade in digital assets. Non-fungible tokens raise the issue about the connection between the token and the IP of the asset. Just because someone purchases an NFT, it does not, per se, mean that the copyright in the work has been assigned or transferred to him or her. Unauthorised minting of NFTs based on copyrighted work is one of the issues that have come up before courts in a few different jurisdictions.
The second one is the creation of virtual worlds and the Metaverse – digital realities in which users communicate with each other via avatars and can buy virtual goods. There is a question of trademark infringement when there is an unauthorized use of the name and trade dress of real world brands in virtual worlds. Trademark infringement requires a use "in commerce", but how the concept of commerce can be understood when it comes to virtual worlds? Also, there are serious issues of uncertainty regarding the territorial nature of trademark rights in such situations.
Case Law
A. Thaler v. Vidal (Federal Circuit, United States, 2022)
Despite being decided in another geographical location, this case is of persuasive precedent value in all common law jurisdictions within Southeast Asia. In the United States Court of Appeals for the Federal Circuit, the court found that it was impossible to name an AI program as the inventor on a patent application since the Patent Act requires that the inventor be a natural person . The principle followed in this case, namely, that 'inventors' referred to in statute law have to be humans, has been applied by patent offices in Singapore, Australia, and the United Kingdom.
B. Yves Saint Laurent v. Shopee (Singapore, 2021 – Unreported Settlement)
This case, which ended in an out-of-court settlement, related to the presence of fake YSL goods listed on the Shopee platform by third-party sellers . It revealed some of the problems involved in trying to enforce rights of luxury brands on the online marketplaces, such as the speed with which the infringing goods were re-listed, the difficulties of verifying the true identity of the third-party sellers, and the efficacy of the measures used by the online marketplaces themselves to enforce their policies . While the settlement terms are not known, it was reported that Shopee adopted a more rigorous system of seller verification for the risky categories of sellers .
C. PT Gudang Garam v. Registrar of Trade Marks (Indonesia, 2019)
In this case, the Indonesian Commercial Court raised the issue of trademark dilution in respect of a well-known trademark. The court found that the doctrine of well-known trademarks, which applies to Article 21 of Indonesia's Trademark Law No. 20 of 2016, also included registered trademarks in bad faith with an implied connection to the reputation of, or an adverse effect on, the reputation of a well-known trademark . The relevance of this case in today's scenario is that the harm to the trademark does not necessarily occur through consumer confusion but rather reputational association, which becomes all the more relevant as brand identity comes into play in virtual spaces .
D. Google LLC v. Oracle America, Inc. (United States Supreme Court, 2021)
This case, which concerned the legality of the copying of about 11,500 lines of code from the Java API declarations in order to develop Android applications, is highly pertinent to the discussion on training AI with copyrighted material. The Court found that such copying was a fair use, noting its transformative nature and highlighting the importance of interoperability . This decision is being watched by AI researchers and copyright lawyers in Southeast Asia as a possible way of legally justifying the use of copyrighted material in training AI systems . Whether this reasoning will be accepted in Asia, or whether it can even be adopted under the different legal framework of civil law countries such as Indonesia, Thailand, and Vietnam is yet to be seen .
Practical Implications
A. For Businesses and Brand Owners
There is an urgent need for businesses with operations in Southeast Asia to review their IP portfolio and enforcement processes for their adequacy in the digital age. Some of the following actions need to be taken:
• The IP rights need to be registered in all countries of active operation: As discussed above, due to the territoriality of IP rights, it is important that the IP rights are registered in all countries of Southeast Asia where there are business operations or future plans to operate. The transparency provisions under RCEP do not harmonize the substantive IP rights but make them transparent.
• Formulate platform enforcement policies: There needs to be formulation of brand protection programs with leading e-commerce platforms of Southeast Asia, including Shopee, Lazada, Tokopedia, Zalora, among others.
• Conduct risk assessment on AI content: Companies adopting AI systems to generate content need to assess the risk of infringement on the copyrighted works used in the training of those AI systems, and the ability of the AI-generated content to qualify for intellectual property rights protection in the country concerned.
• Watch NFTs and virtual environments: Particularly companies in the luxury and fashion industry, gaming, and entertainment need to monitor the usage of their brand/IP in NFT marketplaces and virtual environments.
To Policymakers
The legal framework in Southeast Asia is undergoing change. Policymakers need to consider a number of issues which demand regulation:
• AI Authorship: There needs to be some clarity about what position should be taken legislatively about the eligibility of AI-generated content for copyright and related rights protection. Uncertainty regarding this issue harms both the content creators and the AI industry in terms of liability issues.
• Calibrating Platform Liability: The question of how much protection can be offered to platforms through safe harbours while still maintaining obligations towards enforcement needs to be addressed carefully. If too many obligations are placed on the platform, then only big incumbent platforms will flourish. On the other hand, too lenient safe harbours encourage platforms to remain wilfully blind to infringements.
• Enforcement Cooperation Mechanisms: RCEP’s IP chapter mandates enforcement cooperation but no concrete enforcement cooperation mechanisms have been worked out yet. These include bilateral and multilateral cooperation mechanisms of information exchange and joint operations.
Legal Practitioner’s Perspective
IP practitioners in Southeast Asia are being increasingly tasked with advising their clients on multi-jurisdictional issues which touch upon technology laws, competition laws, and data protection laws. It is important to take into account the rise of AI, platforms, and digital trade becoming the focal axes of IP dispute resolution. An IP practitioner must have comprehensive knowledge of the obligations contained in RCEP Chapter 11, the evolving implementation laws in every ASEAN country, and the international case law dealing with the liability of AI and platforms.
Conclusion
The cases of intellectual property that will be most significant over the coming decade in Southeast Asia will not take place at borders when confronting counterfeit products; they will not be decided using diplomatic measures that were used in the preceding era of IP law enforcement. Instead, the conflicts will take place in the coding systems of developers of artificial intelligence technology, in online marketplaces that sell these products, and in the metaverses in which these technologies will be employed.
There are three key legal events that will influence the future development of this landscape. Firstly, the introduction of AI-specific copyright laws and IP laws or even the evolution of the current laws regarding AI will influence the extent to which the legal system of the region can offer certainty to both the developer of AI and the rights holder. Secondly, the fine tuning of the platform liability regime post-RCEP will influence the incentive structure in online marketplaces and thus will be directly linked to the amount of digital piracy and counterfeiting in the region. Finally, the successful creation of cross-border enforcement mechanisms will influence the enforceability of the obligations under RCEP.
The relevant policymakers should learn from the experiences of those jurisdictions which have had to deal with such issues previously — including the EU’s Digital Single Market Directive and AI Act, the UK’s approach to computer-generated works, and Singapore’s copyright reform — tailoring their responses to suit the institutional, economic, and social realities of Southeast Asia. The region has proven its willingness and ability to innovate regulatory mechanisms pragmatically in many areas of economic policy. The future intellectual property battles shall determine whether that ability applies also to the new realm of the digital economy.
Author :- Shreya Sharma, in case of any query, contact us at Global Patent Filing or write back us via email at support@globalpatentfiling.com.
References
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7- Thaler v Vidal, 43 F.4th 1207 (Fed Cir 2022).
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