At the briefing, Gregory So, Hong Kong’s Secretary for Commerce and Economic Development, introduced the plan devised by the government’s IP hub working group, of which he is also the president. The working group, which was formed in April, announced four strategic goals: to enhance IP protection, support IP creation and exploitation, foster IP-related intermediary and professional services and promote external collaboration and provide services to companies beyond Hong Kong and mainland China.
So noted that the plan is broad and wide-ranging, and cited Hong Kong’s traditional advantages, namely its well-developed legal system, professional services and “unprecedented” access to the Chinese market.
He also placed particular emphasis on developing IP-related professional services, specifically in valuation and arbitration. This view was echoed by Peter Cheung, director of the IP Department, whose presentation focused on the importance of IP valuation services to facilitate the use of intellectual property in the marketplace.
The vision laid out here is not particularly new; Cheung has been promoting Hong Kong as an IP trading centre for a while and has pointed to similar goals. What is relatively new is that senior members of the government, namely So and Andrew Liao, a member of Hong Kong’s Executive Council, are publicly advocating for the plan. This may be a promising sign that top-level decision makers are focusing more attention and are ready to dedicate more resources to the project.
And indeed, a number of aspects are promising. Jacqueline Lui, managing director of Eagle IP and president of the Hong Kong Institute of Patent Practitioners (HIPP), despite having reservations about the plan, agreed that Hong Kong needs to focus on building the infrastructure and building up the professional services needed. She argued that compared to IP owners in places such as Silicon Valley, rights holders in this region are not as knowledgeable about the business models surrounding IP trading and commercialisation, so strong professional services are even more important. She said that the government should dedicate resources to training and certifying these professionals, a suggestion that she has shared with some members of the group (Lui is not a member of the IP trading working group, though she is part of another committee advising on R&D issues in Hong Kong).
However, despite the government’s ambitious outline, the presentation was light on details. When asked about specific programmes or strategies to develop the needed professional services, Cheung explained that the plan is still in its early stages and the group is working to flesh out the details.
That is understandable, but given the dearth of specifics, it is difficult to evaluate the pros and cons of the government’s strategic framework. Perhaps more importantly, Hong Kong is facing competition from a number of cities, most notably Singapore, which has moved beyond the planning stages. In 2002, it started its IP Academy to train IP professionals, and in May, the IP Office of Singapore announced that it will invest S$65 million ($53 million) this year on its IP Competency Framework to expand its training programmes. It is unclear whether Singapore’s investments will yield the professional infrastructure that it is aiming for, but Hong Kong is still deciding how it will build this.
Of course, having a head start doesn’t necessarily mean Singapore will succeed first, and there are likely other approaches that can help Hong Kong toward its goals. Lui had two suggestions. First, she said that Hong Kong needs to clarify whether intellectual property is a capital asset under its tax code. She explained that accountants that she consults with on portfolio management issues say that there is no clear guidance on this, and therefore it is hard to advise clients to move their IP assets to Hong Kong. Similarly, she argued that when a city is building something new like an IP hub, it will likely need to provide tax and financial incentives. She pointed to Hong Kong’s role as one of the biggest wine distribution hubs in Asia as an example. Soon after the city eliminated its duties on wine in 2008, the amount of wine being shipped through Hong Kong surged.
“Hong Kong doesn’t produce any wine but is one of the biggest wine distribution hubs in the region,” she said. “IP trading can work in the same way.”