The Hong Kong Market Entry Playbook: Intellectual property

Hong Kong has a long history of being a business-friendly location to set up both as a regional business hub and to access the sophisticated local market. In the next of a series of articles exploring the attraction of Hong Kong as a regional and international business centre, Pádraig Walsh of Tanner De Witt explains the importance attached to intellectual property protection in Hong Kong, and the governing systems applying to key IP rights.

Jurisdiction

Mainland China and Hong Kong are separate jurisdictions. Registration in one jurisdiction does not extend protection to the other. IP owners must register IP rights separately in each jurisdiction for coverage and protection.

Trademarks

Trademarks: A trademark is a recognisable phrase, word or symbol that denotes a specific product, differentiating it from other products of its kind.

Registration: Registration of trademarks in Hong Kong is governed by the Trade Marks Ordinance.

Protection: Trademark registration entitles the owner of the trademark to use it in relation to the specified goods and services for which the mark is registered. Registration significantly reduces procedural requirements in enforcing trademark rights against unauthorised users in Hong Kong.

Application for registration: An application for registration of a trademark can be made online through an e-filing system, or filed by post or by hand with the Trade Marks Registry, Intellectual Property Department of Hong Kong. Once the application is received, the Registrar will examine whether the application satisfies the requirements for registration by carrying out a search of earlier trademarks records to see if similar trademarks exist. If the Registrar accepts the application for registration, particulars of the application will be published in the Hong Kong Intellectual Property (HK IP) Journal to provide an opportunity for the public to oppose the application for three months. If no notice of opposition is given within this period, a certificate of registration will be issued and notice of registration will be published in the HK IP Journal.

Duration of protection: Upon registration in Hong Kong, the validity of the registered trademark will last for 10 years beginning on the filing date of the application for registration. The registration must be renewed every 10 years with the payment of a prescribed renewal fee stated below for extending the period of another 10 years.

Treaties: Legislation was passed in Hong Kong to empower the Registrar of Trade Marks to make rules in Hong Kong to implement the Madrid Protocol for International Registration of Marks. Nonetheless, the Madrid System is not yet implemented in Hong Kong. The Paris Convention for Protection of Industrial Property and the Nice Agreement on International Classification of Goods and Services apply to Hong Kong.

Patents

Patents: Patents protect inventions, being products, substances, or processes which are new and inventive. An invention which is new, involves an inventive step and is capable of industrial application is patentable, unless it is an excluded subject-matter or activity. Examples of excluded subject-matters are discoveries, scientific theories and surgical methods for treatment of the human body.

Registration: Registration of patents in Hong Kong is governed by the Patents Ordinance.

Protection: The patent owner or inventor of the invention has the right to exclude others from using the invention in Hong Kong for the period of protection granted by the patent. Patent protection is territorial in nature. Patents granted outside Hong Kong do not afford protection in Hong Kong.

Types of patents: There are two types of patents available in Hong Kong, being the standard patent and the short-term patent.

Standard patent (O): A standard patent can be an original grant patent by means of direct application in Hong Kong. A standard patent (O) must satisfy both the formality of the application process and substantive examination by the Registrar of Patents. The substantive examination will determine whether the claimed invention is new, involves an inventive step, and is capable of industrial application. The period of protection for a standard patent (O) is 20 years.

Standard patent (R): A standard patent can also be granted on the basis of a re-registration of a patent granted by the China National Intellectual Property Administration, the European Patent Office (designating the United Kingdom), and the United Kingdom Intellectual Property Office. A standard patent (R) is only subject to a formality examination by the Registrar of Patents. Formality examination is an examination of the information required in the application form and the supporting documents. A standard patent (R) is valid for 20 years from the filing date at the designated patent office.

Short term patent: A short term patent granted in Hong Kong is based on a search report from designated searching authorities outside Hong Kong. A short-term patent is only subject to a formality examination by the Registrar of Patents. There is no substantive examination of the application. A short-term patent having a protection term of up to eight years, being an initial term of four years renewable for an additional four years.

Treaty: The Patent Cooperation Treaty (PCT) applies to Hong Kong.

Designs

Registered design: Registered designs protect the appearance of products. Specifically, the protection relates to features of shape, configuration, pattern, or ornament applied to a product by an industrial process. The protection does not extend to the manner in which a product operates, and certain designs are excluded from the scope of protection (for example, computer programmes or topographies).

Registration: Registration of designs in Hong Kong is governed by the Registered Designs Ordinance.

Protection: Registered design owners have the exclusive right to the design in relation to the article for which the design is registered. Registered design owners have the right to prevent others from manufacturing, importing, using, selling or hiring the design product. Registered design protection is territorial. Designs registered outside Hong Kong do not afford protection in Hong Kong.

Application: A registrable design must be new at the filing date of the application. This means the design must not have been previously registered for the same or another article, or previously published or disclosed in Hong Kong or outside Hong Kong. An application for registration of a design may be made online through the e-filing system or filed by post or by hand with the Design Registry, Intellectual Property Department of Hong Kong. The application is only subject to a formality examination by the Registrar of Designs, and no substantive examination is undertaken. If the application is in order, the Registrar of Designs will register the design and publish it in the HK IP Journal. A certificate of registration will be issued.

Duration of protection: A design right in Hong Kong is valid for 25 years from the filing date. The owner can claim a priority date if the design is first applied in a Paris Convention Country or the World Trade Organization (WTO) member within six months prior to the application in Hong Kong. However, it is still necessary to prove the design is new at the priority date.

Treaties: The Hague System for International Registration of Industrial Designs does not apply to Hong Kong.

Copyright

Copyright: Copyright is a property right given to the owner of an original work, The right can subsist in literary works, musical works, computer software, dramatic works, artistic works and typographical arrangements. Copyright works made available on the internet are also protected.

No registration: Hong Kong does not have a government-established copyright registry. Copyright automatically arises when a work is created. To enforce copyright, it may be necessary to offer independent evidence of the existence of the copyright.

Legislation: Copyright is governed by the Copyright Ordinance.

Protection: In general terms, the copyright owner has the exclusive right to copy the work and to distribute it to the public. A copyright owner can bring legal proceedings against any person who infringes the copyright in the work. Copyright does not protect ideas, but only the expression or product of ideas. Also, fair dealing for research and private study, criticism, review and news reporting, and for use of works in library and school is permitted, though the scope of these exceptions must be carefully considered.

Duration of protection: The general rule is that copyright lasts until 50 years after the creator of the work dies.

Licences: Copyright owners may license the copyright of their works (a) by standard terms licences, (b) by licences under licensing schemes; or (c) on terms negotiated on a case-by-case basis. A localised version of creative commons licences was introduced in Hong Kong by Creative Commons Hong Kong for those who wish to make copyright work available for free under the governing terms of the selected creative commons licence. Hong Kong also has copyright licensing bodies which are authorised by copyright owners to grant, on their behalf, licences to users of copyright works. Some of these licensing bodies have registered on a voluntary basis with the Copyright Licensing Bodies Registry.

Reform: New changes in copyright law in Hong Kong have:

(a) created an exclusive technology-neutral communication right for copyright owners to communicate their works to the public through any mode of electronic transmission;

(b) introduced criminal sanctions against individuals who make unauthorised communication of copyright works to the public for profit or to prejudice copyright owners;

(c) expanded the scope of new copyright exceptions to allow use of copyright works in certain common internet activities;

(d) introduced safe harbour provisions to limit online service providers’ liability; and 

(e) introduced two additional statutory factors for courts to consider when determining whether to award additional damages to copyright owners for copyright infringements.

Specifically, these reforms include provisions that are intended to limit the liability of online service providers, provided that they have procedures to demonstrate they have taken reasonable steps to limit or stop copyright infringement as soon as practicable after they receive a notice of alleged infringement.

Treaty: A number of international treaties in respect of copyright apply to Hong Kong. These include:

(a) the Berne Convention for the Protection of Literary and Artistic Works;

(b) the Universal Copyright Convention;

(c) the Geneva Convention for the Protection of Producers of Phonograms;

(d) the WIPO Copyright Treaty;

(e) the WIPO Performances and Phonograms Treaty; and

(f) the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled.

Trade secrets

Trade secrets: Trade secrets are confidential business information which if disclosed would be able to cause real or significant damage to the owner of the trade secrets. It is usually information that is proprietary and unique to the business.

No legislation: Hong Kong does not have specific trade secret legislation, and trade secrets are protected by the common law principles of confidence. An obligation of confidence will arise whenever the information is communicated to or acquired by a person who knows or ought as a reasonable person to know that the other person wishes to keep that information confidential.

Remedies: Remedies include injunctions, damages, account of profits and delivery up of materials containing trade secrets. The owner of trade secrets may also seek orders or undertakings in respect of third parties who have unlawfully received trade secrets.

Non-Disclosure Agreements: Protection of trade secrets is typically achieved by non-disclosure terms and conditions that are contained in a standalone agreement or incorporated into employment or commercial agreements. The non-disclosure terms and conditions will include provisions not to disclose trade secrets, to limit the use of trade secrets to specific purposes, and to deliver up materials containing trade secrets on demand.

Practical measures: Each business should take practical measures to protect valuable proprietary trade secrets. This should include measures to:

(a) Access control: Unauthorised access to technical and operational information should be prohibited, including restrictions on employees, consultants, JV partners, vendors and others. Employees and outside partners should have only have access to information necessary for performing their proper duties and responsibilities. Only a few people should have unlimited access to all information and all access by these individuals should be monitored and their activities documented.

(b) Monitoring: The source of most unauthorised use of trade secrets and other sensitive information is when someone is given unmonitored access to such information. If information is valuable to a company’s operations, it is useful to a company’s competitor. Thus, access should be monitored and controlled, and made available on a need to know basis.

(c) Physical measures: Consider restricting the use of USB drives, notebook computers and other storage devices. As part of its best-practice guidelines and procedures, a business should have policies and guidelines for employee usage of personal email, personal cloud database, instant messaging apps and similar information-sharing software applications on company computers, and limiting of uploading and downloading of information.

(d) IP audits: A business should conduct regular internal IP audits and reviews as part of its IP protection program, with an internal team of IP auditors and reviewers with the authority to conduct random, unannounced audits and reviews of every computer within the company, fully supported by management.

(e) Competitor monitoring: Monitoring of competitors’ activities is a useful way of detecting unauthorised use of a company’s trade secrets as is monitoring former employees, manufacturers, vendors, consultants and service providers.

(f) Segregate and separate: A business should compartmentalise its sensitive information by keeping different steps of development and delivery, for example separating development from sales and delivery. The key is to prevent personnel in one part of the business process from accessing information in a different part, unless there is an approved business need or senior level approval.

Enforcement

Civil: Civil remedies are available through local courts. Hong Kong courts often follow UK court decisions in IP matters.

Criminal: Infringement of certain IP rights may result in criminal sanctions.

Customs: The Customs service will work with holders of registered IP rights to seize and forfeit infringing goods entering Hong Kong. It is possible to establish and maintain communication channels with enforcement officials. Developing a working relationship with enforcement officials is helpful to understand enforcement mechanisms and procedures available in the event of unauthorised use of IP rights.

Recommendations

Be proactive: A business should not rely on others to protect its IP rights. It is important to make IP protection a core value. It is important to educate employees about the company’s rights.

IP culture: A business should instil IP awareness as part of the corporate culture and engage the entire company in this effort. Ultimately, it is up to the IP holder to protect its own IP rights. Engaging the entire workforce to help protect such valuable assets is a wise approach.

Pádraig Walsh

* This article is an expanded version of our contribution to the iTech Law global publication “Startup Legal Playbook”, which can be accessed on this link.

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Pádraig Walsh

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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. This article was last updated on 19 February 2024.