27 October 2017, Singapore. Without much fanfare, the Intellectual Property Office of Singapore (“IPOS”) has published new September 2017 Guidelines (“the new 2017 Guidelines”) to supplement and clarify the current definition of “real and effective industrial or commercial establishment”.
IPOS’s current definition published in its Online Form MM2(E) Filing Guide 2016 (for trademark) (“the 2016 Filing Guide”) simply defines a real and effective industrial or commercial establishment as an establishment at which some industrial or commercial activities take place and explains that the presence of a parent company, subsidiary company or a branch office in Singapore staffed with sales personnel and conducting actual sales transactions in Singapore would likely meet this requirement. The 2016 Filing Guide further expounds what would not qualify as “real and effective”:
- a mere warehouse;
- a letter box or an address for correspondence;
- the address of a legal or professional representative;
- fake, temporary, fraudulent or fictitious establishments.
With this new set of 2017 Guidelines, there is now greater clarity that IPOS will also consider industrial or commercial activities that take place in other contexts.
The World Intellectual Property Organisation (“WIPO“) has established IP registration systems to enable businesses to protect their patents, trademarks and designs in any country which is a signatory to its various international agreements.
Through WIPO, only one application is needed to effectively register a bundle of separate national rights in several jurisdictions, whether one is applying to register an international patent under the Patent Cooperation Treaty (“PCT”), or an international trademark under the Madrid System, or an international design application under the Hague System for the International Registration of Industrial Designs. This helps to cut costs, bureaucracy and the burden of separate national filings in each jurisdiction.
However, in order for the WIPO filing to be made from Singapore, an applicant needs to have a nexus to Singapore, which include having a real and effective industrial or commercial establishment in Singapore.
Whether an applicant has a real and effective industrial or commercial establishment in Singapore is a question of fact, based on a self-assessment of all relevant factors on a case-by-case basis. IPOS will not police whether this requirement is met when the applicant files an international application [e.g. MM2(E) in the case of a trade mark]. If there is any dispute over the nature of the applicant’s establishment in Singapore, it is up to the applicant to prove that the establishment is one at which some industrial or commercial activities take place. Relevant factors will be considered on a case-by-case basis when determining whether the applicant does indeed have a real and effective industrial or commercial establishment in Singapore.
IPOS, in its new 2017 Guidelines, clarifies by further laying down the following non-exhaustive factors:
- Whether there is establishment of a place in Singapore from which the business of the applicant is conducted. The premises should be one where some industrial or commercial activity is conducted, as opposed to, for example a mere storage facility or P.O. box;
- Whether the applicant conducts industrial or commercial activities and transactions from the establishment in Singapore on a regular basis;
- Whether the applicant is involved in the solicitation or advertising/promotion of its business;
- Whether the applicant has employees in Singapore to look after the applicant’s affairs; and
- Where the applicant employs an agent to conduct the applicant’s business in Singapore:
a. whether the agent has the authority to enter into binding contracts on behalf of the applicant;
b. degree of control the applicant exercises over the running of the business conducted by the agent;
c. level of contribution the applicant makes to the financing of the business carried on by the agent; and
d. whether the agent displays the applicant’s name at his premises or on his marketing materials; and if so, whether the agent does so in such a way as to indicate that he is representing the applicant.
What this means for businesses and Singapore
- A non-resident foreign business, subject to satisfying the other factors, may no longer be required to set up a Singapore subsidiary company or a branch office just to be able to use Singapore as a base to apply to register its international IP(s). A representative office or appointment of an agent in the form of a distributor, inter alia, may suffice. There may potentially be a rise in the number of WIPO filings originating from Singapore.
- Non-resident foreign businesses can now tap on Singapore’s relatively low-cost yet highly skilled and well-connected IP professionals, including a good selection of internationally recognised Singapore law practices and boutique IP practices. Singapore IP law practices should leverage on this opportunity.
- More Singapore businesses may potentially be sought after as Singapore agents / distributors by foreign businesses.
- These new 2017 Guidelines add yet another feather in Singapore’s cap as it transforms its IP regime to keep Singapore at the growth frontier for innovation and IP activities in Asia and around the world.
- Rule 18.1(b)(i) PCT Rules, Paragraph 5.023 PCT Applicants’ Guide – International Phase
- Article 2(1)(i) Madrid Protocol
- Article 3 Hague Agreement
- New IPOS 2017 Guidelines for the Determination of a Real and Effective Industrial or Commercial Establishment
- Singapore Government’s Update to its Intellectual Property Hub Master Plan
- IP Manpower Survey 2015 Summary of Key findings by The IP Academy Singapore
Disclaimer: The opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect any position or policy of Goh Phai Cheng LLC (the “firm”). While every effort has been made to ensure that the information contained in this article is correct, neither the author nor the firm can accept any responsibility for any errors or omissions or for any consequences resulting therefrom. Nothing in this article is intended to amount to legal advice and professional opinion should be sought on a case-by-case basis. This update is intended merely to highlight matters of interest in the field of Intellectual Property.
All references with hyperlinks are last accessed on 27 October 2017. Should you require advice or information, please email the author Constanceleong@gohpc.com.
Last updated: 27 October 2017