Intellectual Property (Dispute Resolution) Bill

Order for Second Reading read.

2.55 pm

The Senior Minister of State for Law (Mr Edwin Tong Chun Fai) (for the Minister for Law): Mr Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a second time."

Sir, this Bill amends our intellectual property, or IP regime, specifically in the area of dispute resolution.

In today’s technology- and knowledge-driven economy, where intangible assets are increasingly important, a robust and trusted IP regime is essential for growth and enterprise. A McKinsey Report in January 2019, titled “Globalization in Transition: The Future of Trade and Value Chains”, found that capitalised spending on research and development and intangible assets such as brands, software, and IP is growing as a share of revenue, from 5.4% in 2000 to 13.1% in 2016.

Singapore is well-recognised internationally for its world-class IP regime. In the latest 2018 Global Competitiveness Report published by the World Economic Forum, Singapore is ranked third in the world, and first in Asia, for IP protection.

In today’s rapidly changing world, we cannot rest on our laurels and must continually assess and review our IP regime to ensure that it remains relevant and supports our enterprises. This Bill is very much in this vein.

Sir, cost-effective IP dispute resolution complements efficient IP protection. Innovative and creative enterprises that develop IP and protect it can secure a commercial advantage over their competitors. They can protect their IP in Singapore swiftly and efficiently through the suite of e-services that the Intellectual Property Office of Singapore, or IPOS, provides. In addition, they can also secure protection overseas with ease and speed through the international agreements and networks that Singapore is a part of. For example, international trade mark registrations can be secured under the Madrid system, and international patent applications can be filed under the Patent Cooperation Treaty, or PCT. Patent applications in many major markets can also be accelerated under the Global Patent Prosecution Highway programme and the ASEAN Patent Examination Cooperation programme.

However, obtaining IP protection would have no commercial value to an enterprise if, when its IP rights are infringed, it finds itself unable to enforce its IP rights due to a lack of financial resources. This Bill focuses on this final mile.

The cost-effective resolution of IP disputes increases the confidence that IP rights owners have in maintaining their competitive edge, and maximising the rewards of their innovative and creative efforts.

In 2018, there were a total of 11,845 patent applications. This is an increase of almost 22% from five years earlier.

The number of applications from locals has increased by even more – about 40% from 2013 to 2018.

The pace of innovation, by both local businesses and individuals, is accelerating.

So, therefore, not only must the IP registration process be cost-effective and easy to navigate, in the event that IP rights need to be enforced, the IP dispute resolution process must also be cost-effective and easy to navigate.

This was why in 2015, MinLaw appointed a committee to review the IP dispute resolution system in Singapore. One of the objectives of the review was to make the IP dispute resolution system more accessible, particularly for less well-resourced parties such as individuals and SMEs. This Bill implements some of the Committee’s recommendations.

We are doing so from a position of strength. An important plank of our legal and judicial system is the efficiency of our Courts.

In the latest 2019 World Bank Doing Business Survey, it was noted that it takes 164 days to resolve a claim in Singapore, compared to 370 days in New York and 437 days in London.

In addition, this Bill strengthens Singapore’s position as a choice venue for the arbitration of international IP disputes.

Let me now outline to this House the key features of this Bill.

First, we are consolidating most of the civil IP disputes to be heard in the High Court. Second, we are legislating certain patent-related procedures before the Registrar of Patents. Third, we are clarifying that IP disputes may be arbitrated in Singapore.

Let me take Members through each of these features.

The first two groups of amendments facilitate the effective resolution of IP disputes, in court, and at IPOS. IPOS is responsible for the Registries of the various IP rights, for example, the Registry of Patents and the Registry of Trade Marks.

I will first discuss dispute resolution in court.

The Bill consolidates most civil IP disputes in a single forum – the High Court. Currently, IP disputes are heard in multiple forums – the High Court, the State Courts and at IPOS. Where a dispute is to be heard depends on a few factors.

First, on the IP right in issue. For example, whether the dispute is about a patent over an invention, or copyright in song lyrics. Second, the nature of the dispute. For example, whether the dispute is about infringement of someone's IP right, or the validity of the IP right itself. Third, the value of the claim.

Let me illustrate. Today, a copyright or trade secret owner commences his case in the State Courts, if he or she is seeking damages of up to $250,000 for copyright infringement or breach of confidence. Above this amount, the case must be commenced in the High Court. On the other hand, for infringement of patents, trade marks, and registered designs, the case must be started in the High Court, regardless of the value of the claim. This itself adds complexity, and different layers to determine which kinds of cases are commenced and heard in which court.

Going forward, the IP dispute resolution system will be improved.

First, the system will be streamlined and it will be clearer to users what the appropriate forum is when they have a dispute. Second, parties who litigate in court will benefit from the expertise of High Court judges. The High Court has a specialist bench of IP judges, with greater expertise and experience in IP matters. Third, IP rights owners and users in general will benefit from the development of IP jurisprudence through High Court judgments.

The Bill therefore makes the following amendments to the jurisdiction of the Registrar of Patents, the Magistrate's Court, the District Court and the High Court over IP disputes:

Clause 4 makes the High Court the exclusive forum to hear civil proceedings for most copyright matters. Cases before the Copyright Tribunal, for example, cases about licensing rates charged by copyright owners, are not affected. They will remain with the Copyright Tribunal.

Clauses 13 and 19 remove the jurisdiction of the Registrar of Patents over patent infringement and declarations of non-infringement of patents, respectively.

Clause 20(a) gives the High Court jurisdiction over patent revocation, where such proceedings do not arise in the context of an existing dispute before the High Court.

Clauses 31 and 32 remove the jurisdiction of the Magistrate's Court and the District Court over an action in passing off.

As a result, the High Court will have exclusive jurisdiction over:

(a) Civil infringement of copyright and all forms of registrable IP rights;

(b) Passing off actions, which are closely related to trade mark infringement;

(c) Declarations of non-infringement of patents and registered designs; and

(d) Breach of confidence actions where the amount claimed exceeds $250,000.

The High Court will also have concurrent jurisdiction with the relevant Registrar over post-grant revocation and invalidation proceedings for patents, and not just trade marks, registered designs and geographical indications. Such proceedings are about whether the IP right are validly registered or granted. This gives the parties commencing revocation or invalidation proceedings a choice between doing so in the High Court, and doing so before the relevant Registrar who granted the right in the first place.

To ensure that parties may continue to access the courts in a cost-effective and expeditious manner, in conjunction with the consolidation of IP disputes in the High Court, MinLaw and the Supreme Court are looking into the introduction of a specialised IP litigation "track" in the High Court, with simplified processes and also cost-saving features.

This is outside the scope of this Bill, and will be done via amendments to civil procedure.

This "specialised track" will be especially useful for less well-resourced parties such as individuals and SMEs, who may otherwise be unable to enforce their valid IP rights.

Litigants in the High Court will generally be able to choose between this "specialised track" for IP cases, and the "default track" where IP cases are treated in a similar manner to other types of civil cases.

More details about the time and cost-saving features of the "specialised track" will be shared in due course.

My Ministry consulted practitioners when developing these reforms. We received feedback that IP litigation tends to be more expensive than most other types of litigation, given its specialised and highly technical nature, and in some cases, the need for expert witnesses as well. This could put it out of reach for some enterprises that need to turn to the courts to resolve their disputes. This "specialised track" is being developed with a focus on lowering litigation costs.

Next, I turn to proceedings at IPOS, specifically those before the Registrar of Patents. The Bill seeks to raise the quality of granted patents in Singapore.

Before elaborating on the amendments, let me provide an overview of the patent application process.

After a patent application is made at the Registry of Patents, it undergoes Search and Examination. A patent examiner will search publicly available information at the time of the patent application to understand the current state of technology. The examiner then assesses whether the invention in the application meets the statutory criteria of being new, inventive and capable of industrial application. Only inventions that fully meet these criteria are granted patent protection.

Clause 10 of the Bill legislates a process of third party observations. This is a process in which a third party can, after a patent application has been published, submit observations to the Registrar of Patents on the patentability of the invention in the application. The third party provides reasons and documents to the Registrar, which can be useful in the Search and Examination process.

This helps to ensure that only deserving inventions are granted patent protection, as the patent examiner has another source of information available to him or her when making that assessment. Currently, third party observations are already being filed, but informally. Setting out the process in legislation makes it clear and transparent for all, and increases awareness about how the process can be used.

Clause 11 of the Bill introduces a process for re-examining the specification of a patent after it has been granted. After a patent has been granted, information which affects the validity of the patent could come to light, which was not previously available at the earlier stage. For example, a competitor or a researcher could come to know of some document or earlier published literature which may suggest that the invention in question is actually not new or inventive, and therefore the patent should never have been granted in the first place.

Currently, the main means of challenging the validity of a patent at the Registry of Patents, after it has been granted, is through the patent revocation process under section 80 of the Patents Act. With patent revocation, the requestor is involved as a party in the entire revocation proceeding. The new patent re-examination process is ex parte in nature. This means that all the requestor does is make the request and submit the documents. Thereafter, he is no longer involved. If the patent examiner finds that there are grounds for the patent to be revoked, he will correspond with the patent proprietor only. Therefore, for the requestor, this provides an additional, lower cost option to challenge the validity of a patent.

Sir, in summary, these two procedures – third party observation and post-grant re-examination – are intended to be low-cost, lower barriers of entry, and provide easier avenues for third parties to bring to the Registrar's attention information about the patentability of an invention. This helps to strengthen the quality of granted patents in Singapore, and is the latest step in our efforts to improve the patent system.

In 2013, IPOS began to examine patent applications in-house, having built up a team of examiners to do so. Our patent examination capabilities were recognised internationally when, in 2014, IPOS was appointed an International Searching and Preliminary Examining Authority for international PCT patent applications.

In 2014, we also tightened the system such that a patent is granted only if the invention fully meets the patentability requirements in our law.

Now, these latest measures provide even more avenues for third-parties to scrutinise and submit information for IPOS to consider, thus helping to further enhance the quality of the Patents Register.

Sir, I now move on to the third group of amendments, which concern arbitration of IP disputes.

Singapore offers a suite of dispute resolution options. Besides going to the courts or to IPOS, parties can also consider resolving their disputes by way of arbitration. Arbitration holds certain advantages. For example, arbitration proceedings can take place in private, and parties have a greater degree of control over how the proceedings are conducted. Singapore is also highly-regarded internationally as an arbitration venue, and offers a choice of leading arbitral institutions. According to the 2018 International Arbitration Survey by Queen Mary University of London and White & Case, Singapore is now the third most preferred seat of arbitration globally, and the Singapore International Arbitration Centre (SIAC) the third most preferred arbitral institution.

Clause 2 amends the Arbitration Act, and clause 8 amends the International Arbitration Act, to clarify that IP disputes are capable of settlement by arbitration, in other words, that they are arbitrable. The amendments also clarify that such arbitral awards bind only the parties to the arbitration proceedings.

These amendments will provide greater clarity and certainty to users, as well as encourage the use of arbitration in IP disputes, and strengthen Singapore's attractiveness as a venue for international IP arbitration.

Arbitral awards cannot affect the status of IP rights on the IP Registers. The arbitral award only affects the parties that have submitted the dispute to arbitration. As Members know, arbitration is essentially an agreement by which two parties agree to submit a dispute to a chosen tribunal. So, for example, if an arbitral tribunal finds that a patent issued by any country is invalid, the consequences of such a finding, which, for example, could affect the licence fee payable by one party to the other, affects the parties in the arbitration only, and no one else. The patent remains on the Register in whichever country it may originate from. Decisions that affect the status of IP rights on the Registers can only be made by the courts or the relevant Registrars from the jurisdictions that issue those IP rights. These amendments will lend further certainty to arbitrators and stakeholders who may wish to challenge the validity of IP rights in arbitration proceedings.

I turn now to other ancillary amendments related to IP dispute resolution, and I will highlight two main ones.

First, clauses 9(c), 12(c) and 20(i) provide the Registrar of Patents with greater flexibility to refer disputes before the Registrar to the High Court. This could, for example, lead to cost savings by reducing one layer of appeal, when it is clear that the parties to the dispute before the Registrar of Patents intend to appeal against the Registrar's decision anyway.

Second, clauses 5, 26, 29, and 33 of the Bill harmonise across all the Acts relating to IP rights the availability of the right to appeal against High Court decisions made on appeal from the relevant Registrar. Going forward, the consistent approach will be that when decisions from the relevant Registrar are appealed to the High Court, where further appeals are possible, such appeals can only proceed with the leave of court.

Sir, this Bill is a part of important reforms to the IP dispute resolution system, which is a key part of a well-functioning and reputable, trusted IP regime that is needed to support an innovative economy.

We are giving IP rights owners greater confidence that they can effectively enforce their IP rights. This preserves their incentives to continue investing in innovative and creative activities, which in turn benefits our economy, and our society.

These reforms also build on Singapore's considerable strengths, to enhance our standing as a hub for international IP arbitration. Mr. Speaker, I beg to move.

Question proposed.

3.15 pm

Mr Christopher de Souza (Holland-Bukit Timah): Sir, Intellectual property is particularly important for Singapore as we continue to look for smart solutions and invest heavily in research and development. By monetising intangible innovations, there is incentive to work on ideas and make them reality. This benefits society. The substantive law governing and protecting intellectual property is a key ingredient in ensuring Singapore's reputation as an intellectual property hub grows. This Bill strengthens that framework so that IP rights can be better protected in Singapore.

First, this Bill introduces third party observation and re-examination after grant process. Before I go further Sir, I should declare that I am a practising lawyer whose practice also includes IP and acted in the case that appeared in the Explanatory Statement of this Bill.

Sir, the third party observation process in clause 10, the new section 32 of the Patents Act, is available before the patent is granted. This will allow the patent granted to more accurately reflect the scope that would be adequate both for the rights of the proprietor as well as other innovators in the same field. Would the Minister elaborate on how this process may affect the turnover time for patent registration in Singapore?

The re-examination after grant process is found in clause 11, new section 38A of the Patents Act. This new process supplements the current procedure. Although the applicant has less control in the ex parte proceeding, the applicant does not need to spend as much financial resources and time to challenge the patent. Even as it is good to provide this alternative process of challenging a patent, would the Minister elaborate on the safeguards to prevent a proprietor of a legitimate patent from getting deluged by these applications? Although the applications may not cost as much for the applicant as a court proceeding, these applications take a toll on the proprietor by increasing uncertainty.

One or both of these kinds of third-party processes are present in other jurisdictions and regions such as Japan, Great Britain, Europe, Australia and China. Having it in Singapore will further our position as an intellectual property hub. These processes make patents in Singapore more robust and accurate as there are more avenues to subject them to scrutiny. Because it is ex parte, these processes are less costly and less time consuming. It is especially important for SMEs with limited resources and manpower – which is a point, I think, the Senior Minister of State alluded to in his speech earlier on.

In relation to the re-examination after grant process, there is a bar in the new section 38A(5) of the Patents Act against the filing of an application where there is a pending court proceeding in which the validity of the patent may be put in issue. Would the Minister explain why there is no similar bar in the context of an ongoing arbitration, especially if a party to the arbitration is trying to get a second bite at the cherry by filing an application? Even though arbitration proceedings are private, the proprietary holder could, possibly, apply for a stay of the re-examination application.

Second, this Bill streamlines dispute resolutions by consolidating the jurisdiction for intellectual property disputes within the High Court. Currently, certain intellectual property disputes may be carried out at IPOS or at the various level of courts. For example, copyright proceedings used to be held in "a court" but has been changed in clauses 3 and 4 to only the High Court. The jurisdiction of the Registrar at IPOS to determine infringement of a patent is removed by clause 13. In this way, this Bill consolidates intellectual property proceedings in the High Court, simplifying and streamlining the process. This may also assist in enforcement overseas. As cross-border intellectual property disputes may become increasingly common in an inter-connected world, overseas enforcement is particularly important for intellectual property disputes.

However, along with this change comes concerns regarding costs. Small businesses already tend to avoid enforcing intellectual property rights due to somewhat prohibitive costs and a potential "war of attrition". While the Bill provides for indemnity costs under certain conditions at clause 6, this is only for Geographical Indications and a trial and hearing at the High Court still costs significantly more than that of a lower Court. Furthermore, as some of the procedures were previously carried out by IPOS, what will be done to ensure that our judiciary has the necessary expertise and resources needed to replace that function?

Third, this Bill makes it clear that disputes relating to intellectual property rights are arbitrable. This is important as there is some school of thought that certain intellectual property disputes such as copyright and registration of trade mark or patents are non-arbitrable as it is against public policy. These are some arguments, not necessarily arguments I would agree with. For example, the Review of the Arbitration Act Committee's 2000 Report Review of Arbitration Laws espoused such a view. However, the position in the Bill is not novel – it is the position that is also made clear in Hong Kong by the Arbitration Ordinance which came into effect 1 January 2018.

There are advantages to having intellectual property being arbitrable. Firstly, the confidentiality of arbitration proceedings is especially relevant in intellectual property cases where the very thing that is being disputed is an intangible, and sometimes, and quite often, a confidential asset. Secondly, a total of 160 states have signed up to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Thirdly, parties have greater control over where they desire to have a matter arbitrated, for example, in a neutral jurisdiction instead of the place of business.

While the new section 52C(3) of the Arbitration Act and 26C(3) of the International Arbitration Act make it clear that an arbitration award involving intellectual property rights does not affect third-party holder of a security interest, could the Minister elaborate on how this will operate? This Bill sets out exciting changes to the intellectual property dispute resolution landscape. What will be done to strengthen and train up capabilities of our people so that people in our legal industry can benefit from these changes? This includes arbitrators specialising in intellectual property (IP), legal practitioners in the field of intellectual property and disputes, and thought leaders in arbitration, dispute resolution and intellectual property.

There is much potential in this Bill. People who develop and own intellectual property – software engineers, designers, small medium enterprises, for instance. People who use technology in their day-to-day life will also benefit from this Bill. Why? Because intellectual property rights are supported through a more robust dispute resolution structure. And for those reasons, I support this Bill.

3.23 pm

Mr Patrick Tay Teck Guan (West Coast): Mr Speaker, Sir, I rise in support of the Intellectual Property (Dispute Resolution) Bill. This Bill aims to ensure that the Singapore IP regime continues to support innovative activities in Singapore and positions Singapore as a choice of venue for international IP dispute resolution.

I see the three key highlights of the Bill as: (a) to streamline the IP dispute resolution framework in Singapore; (b) to provide certainty that IP disputes can be arbitrated in Singapore; and (c) to amend the Intellectual Property Office of Singapore's procedures on granting and re-examining patents.

I applaud the move to provide certainty that IP disputes can be arbitrated in Singapore and the arbitral award only has effect on the parties and not the world at large. This also means that if an arbitral tribunal makes a finding that a patent is invalid, a third party will not be able to rely on that finding to argue that he does not infringe the patent.

However, with the consequent move for IP cases to be heard by the High Court, I am concerned that the costs of arbitration as well as the costs of award will escalate in tandem with IP cases moving to the High Court. With the formalisation of third party observations on patent applications, when a patent application has been published, but a patent has not been granted, a third party may make submissions to the Registrar of Patents on the patentability of the invention. Such a formalisation of process is a positive move to ensure the quality of granted patents.

In streamlining the IP dispute resolution framework in Singapore, most, if not all IP disputes will now be heard by the High Court. With such an exclusive jurisdiction vested in the High Court, I wish to ask the Minister if such a move will over-burden the High Court and its judicial officers and over-stretch our already lean judiciary. In the same vein, will such a move also result in escalation of costs to take action or defend during an IP dispute. Although there is a fast track procedure instituted, will costs be truly and effectively kept down regardless of value of disputes or cost-sensitive litigants.

In short, in our journey towards strengthening our IP regime, encouraging inventions and innovation, can we also do more to help our Small and Medium Enterprises (SMEs), start-ups, including fintech start-ups, entrepreneurs and freelance professionals in various sectors, such as those in the creative sector, gaming or software development areas, to help them navigate this area of law and the new disputes regime easily, effectively and in an economical manner as and when they are registering, arbitrating, accused of infringement or taking civil action themselves in the area of intellectual property law which encompasses, trademarks, patents and copyright. With that, I support the Bill.

3.27 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, I stand in support of the Bill which takes significant steps forward in positioning Singapore as a hub for international IP dispute resolution.

The Bill addresses three broad areas of IP dispute resolution. First, it consolidates the majority of IP proceedings in the High Court. Second, it updates pre and post-grant patent procedures. Third, it clarifies that IP disputes are arbitrable.

I have clarifications and recommendations for each of these three areas.

I would like to acknowledge and thank the NUS Law Intellectual Property Student Association (IPSA) for their input. I would also like to commend the MinLaw for the extensive public consultation process and outreach to stakeholder groups such as IPSA.

Sir, the proposed amendments introduce a formal procedure for submitting pre-grant third-party observations on the patentability of an invention. This move which assists IPOS in evaluating patents at the pre-grants stage will increase the overall quality of registered patents in Singapore. I would like to raise four points on the procedure for submitting third-party observations.

First, will the Ministry consider allowing third-party observers the option of remaining anonymous and not revealing their identities to the patent applicant and the general public? This would encourage more third parties to submit observations without any fear of prejudice. The Japan Patent Office and the European Patent Office both permit third-party observations to be filed anonymously. To address the concern of frivolous observations being anonymously filed, the identity of third-party observers can be known by only IPOS who can take action against parties who abuse the observation process.

Second, will the Ministry consider making the content of third-party observations and the applicant's response to the third-party observation available for public inspection?

Public inspection could generate healthy debate on the validity of the specific patent, making the grant process more robust. On a broader level, this could increase awareness of the requirements of patent validity as a whole. This would increase the overall quality of registered patents in Singapore. Under the International Patent System administered by the World Intellectual Property Organization, observations and the applicant's responses are made available for public inspection.

Third, will the Ministry consider setting out in subsidiary legislation or guidelines the grounds on which pre-grant third-party observations should be based? While the new section 32 on pre-grant observations states that third parties are to provide “reasons” for their observations, it does not define the term “reasons”. In contrast, the new section 38A on the post-grant process explicitly provides grounds for third parties to request a re-examination of patents. Setting out a list of possible “reasons” would increase the clarity of third-party submissions.

Japan’s Patent Law prescribes specific grounds for third-party observations at the pre-grant stage, which are similar to the grounds under which patents can be invalidated post-grant. Likewise, the European Patent Convention specifies that pre-grant third-party observations on patentability must be based on the grounds of novelty, inventive step, clarity, sufficiency of disclosure and amendments that are not allowed.

Fourth, while I understand that the costs for third party observations have not been determined and that accessibility would be the key concern, will the Ministry provide its assurance that costs for doing so will be kept as low as possible? For instance, the costs could be a nominal administration fee for the processing of their observations. Keeping the costs low will ensure that third parties keen to submit useful observations are not deterred by the prohibitive costs of doing so.

Next, I have two points to raise on the amendments to clarify that IP disputes can be arbitrated in Singapore. My two points relate to the scope of IP disputes that can be arbitrated in Singapore.

First, can the Minister clarify if IP rights found in employment contracts are arbitrable? It is common practice for employers to insert clauses relating to IP rights in employment contracts. However, there are some countries that deem employment disputes to be non-arbitrable because they relate to matters of public policy. Greece is one such country that considers employment disputes to be non-arbitrable. The position in Singapore on arbitrability of employment disputes has not been conclusively settled. If employment disputes are non-arbitrable, then IP disputes arising from employment contracts may be subject to the exclusive jurisdiction of the Courts. It would be useful for the Ministry to clarify the position on arbitrability of IP disputes arising out of employment contracts.

Second, can the Minister clarify if the arbitral awards for patent validity disputes can serve as a basis for patent registry amendments? Internationally, countries have taken different positions on this. In the EU, patent infringement issues are arbitrable but patent validity challenges are within the exclusive jurisdiction of State Courts and are not arbitrable. On the other end of the spectrum, Switzerland allows arbitral awards to constitute the basis for amendments to its patent registry.

The new section 52F seems to suggest that patent validity are arbitrable. However, it would be useful for the Minister to further clarify whether it is intended that such arbitration award would only be valid as between parties or whether the award can serve as a basis for patent registry amendment.

Finally, beyond the amendments proposed in the Bill, the Ministry has indicated that it intends to further introduce a fast track for lower value disputes or less well-resource litigants. I understand that details of this fast track option is still being ironed out and will be fleshed out in subsidiary legislation. I would like to raise some points for clarification and consideration when drafting the subsidiary legislation.

First, the Ministry has proposed a cap of two hearing days for cases on the fast track. Can the Minister clarify how the proposed cap of two hearing days was derived? Will the Ministry be further studying the optimal period for hearing cases on the fast track? I raise this because the consolidation of disputes in the High Court was motivated by the fact that the Ministry has stated that, “IP disputes often involve myriad technical details that are susceptible to repeated and extensive requests for particulars and discovery”. With this in mind, it is unclear whether a cap of two hearing days for a trial would be realistic for IP disputes.

My second point is on the powers of the trial judge hearing cases on the fast track to order relief. The Ministry has not indicated a position on whether such a trial judge for a fast track case can grant both interim and final relief. This question was also left open in the Final Report of the IP Dispute Resolution Committee. This is a crucial point that I hope the Ministry will eventually clarify. I would also like to highlight that if fast track judges are unable to make decisions on relief, they may have to pass the case to default track judges. This might lead to more time spent and increased costs if plaintiffs have to bring separate legal proceedings by the plaintiff to obtain the legal remedies sought.

Third and lastly, I hope the Ministry will also clarify whether decisions from the fast track are appealable, and if so, how this will interact with the proposed two-day hearing cap.

Sir, I stand in support of this Bill and hope the Ministry can take into consideration my recommendations in further developing the IP dispute resolution landscape in Singapore.

Mr Speaker: Senior Minister of State Edwin Tong.

3.35 pm

Mr Edwin Tong Chun Fai: Mr Speaker, I thank the Members who have spoken, for their support of the Bill, and, in particular, I appreciate the Intellectual Property Students’ Association’s inputs through Mr Louis Ng. Their activism and their interest in legal development in their chosen area is something to be encouraged.

Members have raised points for clarification in four main areas and I propose to deal with them as a whole under these four areas.

Mr Patrick Tay asked whether the “specialised track” would be effective in keeping litigation costs down. Mr Louis Ng also asked a few questions about the features of the “specialised track”. First, Mr Ng's suggestions and proposals in relation to how we design this track, what we take into account, we will consider them when we prepare the relevant rules.

The “specialised track” focuses on lowering costs by having simplified processes and other cost-saving features. These obviously have to deal with the appropriate types of cases and not every case will be suitable for this "specialised" track. I will elaborate on some of the features which we are considering although they are not part of the Bill.

There will be early and active case management by the Courts. This will ensure that cases are managed in an appropriate manner, with procedures that are streamlined and cost-effective. So, we sieve the cases upfront to ensure that they are appropriate. And to Mr Ng's point about whether separate proceedings may be filed if one determines half way through that the "specialised" track is not suitable, that is unlikely to happen given the upfront pre-judicial management or rather case management of the process.

We are considering a cap of $500,000 on the value of the claim for damages or an account of profits. The “specialised track” is appropriate for lower value cases, which tend to be less complex. The cap on the value of the claim reflects this.

We are also considering a cap on party-and-party costs awarded. This would be stage-based, in other words, based on the stage of proceedings of the litigation, with an overall cap of $50,000. This will also help to lower the business risk of litigation that Members spoke about.

On the two-day cap for the length of trial, we propose to cap it but at the same time allow the trial judge discretion to extend this in the appropriate circumstances. So, for example, if a case is being heard and half way through, you might need another half a day, obviously the trial judge will have the discretion to do so. This will reduce the time spent and the consequently the costs for the parties. The cap on two days – Mr Ng asked how it was arrived at. It was based on the recommendations of the IP Resolution Review Committee which, I am sure, Mr Ng knows comprises representatives from the judiciary as well as IP lawyers who handle these cases, academia and also IP rich companies who viewed this as appropriate for the less complex cases. So, we took a sampling of these views and proposed the two days on that basis.

Regarding the relief that the trial judge can grant, it is intended that the trial judge’s power to grant interim and final relief would be the same, whether a case is on the “specialised track” or “default track”. In other words, the remedies that one would expect to see ought not be different. It is just that the process and the speed by which you resolve the case could be different, depending on the complexity and nature of the case.

Regarding appeals, final decisions in cases on the “specialised track” will be appealable in the same manner as final decisions in cases on the “default track”. As the appeal is a separate process, the time spent on the appeal hearing is not included in the two-day hearing cap for cases on the “specialised track”.

Mr Tay asked whether the costs of arbitration of IP disputes will escalate as a result of moving certain IP disputes to the High Court. That has not been our sense and also when we look at the feedback from the Committee, that is also not the sense that they got. But we will continue to monitor this as we actually implement this process. As arbitration and litigation are separate and distinct methods of resolving disputes, we do not anticipate that the amendments to consolidate litigation of most civil IP disputes in the High Court will directly impact the costs of arbitration. In other words, parties choose arbitration sometimes for different reasons from why they have the matter resolved in Court.

Mr Tay and Mr de Souza asked about the expertise and resources required by the High Court, pursuant to the consolidation of civil IP disputes in the High Court. As I mentioned in my speech earlier, the High Court already has a specialist bench of IP judges, with greater expertise and experience in IP matters. My Ministry will continue to work with the courts to ensure that there are sufficient resources to handle the caseload as may be appropriate.

I next turn to Mr Ng and Mr de Souza’s questions around the rigour of the third party observation process. I will just address queries that have been raised together. First, as far as anonymity is concerned – I think Mr Ng raised this point – if there is no identifier on the documents containing the third party observation, then the identity of the third party observer will not be known. So, in other words, you can choose to be anonymous or not anonymous as you wish as a third party.

Second, I think Mr Ng also asked about whether the records will be available. The records of the patent search and examination history are available to the public on the Patents Open Dossier service. This will include the contents of the third party observations filed before the deadline as well as the applicant’s response to the examiner’s written opinion incorporating any observation, where there is one. So, all of that will be made available on the Patents Open Dossier service.

Third, the new section 32(1) of the Patents Act, inserted by clause 10 of the Bill, provides that third parties may make observations on the question whether the invention in the patent application is a patentable one. I touched on this in my earlier speech. The statutory requirements for an invention to be patentable can be found in section 13 of the Patents Act. Hence, for example, the third party could make an observation that an invention is not new because of an earlier publication.

Fourth, there will be no fee to submit third party observations.

Finally, when a third party observation is made, the patent Examiner would have to take some additional time to consider it. However, the patent application period will not be unduly lengthened as Rule 46(8)(a) of the Patents Rules requires the Examiner to issue the examination report within a fixed time period, regardless of whether a third party observation is made or not. So, that helps to address Members' concern about an overall prolongation of the process because of the observations.

A healthy patent regime encourages innovation and protects only deserving inventions. Third party observations which are meritorious contribute to this and would be worth the time taken to consider it, so that overall we develop a more robust and a more trustworthy IP system and regime.

Mr de Souza also asked a few questions about the post-grant patent re-examination process. First, he asked about safeguards. When a re-examination request is made, the specification of the patent will first be re-examined by a patent Examiner. The Examiner would ask the patent proprietor to respond only if there are possible grounds for the patent to be revoked. This avoids placing an unnecessary burden on the patent proprietor.

Second, Mr de Souza asked why there is no bar against filing a re-examination request when there is an ongoing arbitration proceeding in which the validity of the patent may be put in issue. This is because arbitration proceedings cannot affect the status of the patent on the Patents Register. In contrast, proceedings before the court or IPOS in which the validity of the patent may be an issue could lead to the patent being revoked. In other words, the patent itself being revoked as opposed to the right between two parties. Hence, the new section 38A(5) is necessary to prevent concurrent proceedings in which the status of the patent on the Patents Register could be affected. This is not applicable in the context of arbitration.

Mr Ng and Mr de Souza asked some questions about the arbitrability of IP disputes. Let me address those.

First, as to whether IP rights found in employment contracts are arbitrable. The Bill is intended to clarify that a wide range of IP disputes are arbitrable. In employment contracts, it is common to find clauses about the ownership of IP rights that arise in the employee’s course of work; and I think that is what Mr Ng seemed to be referring to in his speech. If there are disputes subsequently about the ownership of these IP rights, then these disputes are arbitrable. Ownership disputes are within the scope of "IPR dispute", which would be defined in the new section 52A(3) of the Arbitration Act and section 26A(4) of the International Arbitration Act, inserted by clauses 2 and 8 of the Bill, respectively. I just want to add that what is arbitrable does not necessarily mean that it will be the subject of an arbitration because it is still defined by the scope of the arbitration agreement.

Second, he asked whether the arbitral awards for patent validity disputes can serve as a basis to amend the patent on the Register.

In my speech earlier, I had explained that the arbitral awards only affect the parties to the arbitration agreement, and will not affect the status of IP rights on the Registers. This is because we take the view that decisions that affect the status of IP rights on the Registers should only be made by the courts or the relevant Registrars from the jurisdictions that issued those IP rights, since these are decisions affect the world at large concerning the registration and not just the parties to the arbitration proceedings. This is true not only of patents, but of other forms of registrable IP rights, such as trade marks and also registered designs.

Mr de Souza asked how an arbitration award involving intellectual property rights affects a third-party holder of a security interest. Such an award does not affect any existing right or liability between a third-party holder of a security interest and a party to the arbitral proceedings, whether arising in contract or arising by operation of law. And this is clarified in the new section 52C(3) of the Arbitration Act and section 26C(3) of the International Arbitration Act.

I turn now to the other queries that had been raised.

Mr Tay also asked whether more could be done to help SMEs and start-ups navigate the IP registration and dispute resolution regime.

I thank Mr Tay for looking out for the interest of the Labour Movement, and I think Mr de Souza also asked some questions about training and whether the users of the system will have the knowledge and know-how.

The IPOS website provides useful information on the IP registration system. If anyone requires further assistance, they can always call IPOS for help with queries or make an appointment to see an officer at IPOS.

For assistance with IP-related disputes, there are legal clinics at IPOS, where there is a panel of lawyers available to provide preliminary advice on, for example, infringement or opposition matters. To assist those seeking such advice, they can obtain reimbursement from IPOS for the consultation fee for the first session.

IPOS also runs complimentary IP business clinics that allow participants to speak with private business consultants on IP strategies, franchising and licensing, audits and valuation, among other issues related to or arising from IP rights.

Mr de Souza asked about the efforts to strengthen our legal industry, so that they can benefit from these reforms.

My Ministry and the relevant agencies will be engaging stakeholders in the IP and legal sector, to explain how these changes can benefit them, how they will operate in this new landscape, and how they could make use of it.

This will not just extend to practitioners, but also businesses in the business environment, big and small companies who use the system, and whom our IP regime is really intended to support. In other words, the stakeholders who benefit from the IP regime.

I think Mr de Souza also raised a point about costs, and I think the point that Mr de Souza made was why is it that the Bill provides for indemnity cost under certain conditions in clause 6, but only for geographical indications. Similar amendments to those – I think he referred to clause 6(b) which amends the Geographical Indications Act – they will also be made in this Bill at clause 28, to the Registered Designs Act, and clause 34, to the Trade Marks Act, to bring them onto the same footing as what Mr de Souza refers to. And that can be found at clauses 28 and 34 respectively for the Registered Designs and the Trade Marks Act.

Sir, in conclusion, the reforms introduced will enable IP rights owners to resolve their IP disputes efficiently in court and at IPOS, whether they are individuals, SMEs or large corporations. This will give IP rights owners greater assurance of the enforceability of their IP rights, and also increase the overall quality of granted patents in Singapore. These reforms are part of our continual efforts to improve our IP regime, to support our innovative and creative industries.

I wish to thank the Members who have spoken and who have supported the Bill. Mr Speaker, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Edwin Tong Chun Fai].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.20 pm.

Sitting accordingly suspended

at 3.57 pm until 4.20 pm.

Sitting resumed at 4.20 pm

[Mr Speaker in the Chair]