The Transformation of Myanmar’s Intellectual Property (IP) System – What’s in Store for Small and Medium-Sized Enterprises (SMEs)?
As part of EuroCham Myanmar’s ongoing work for South-East Asia IP Helpdesk, the Chamber’s policy unit published an article on the current status of intellectual property rights in Myanmar. The article was originally published on the European Commission Website on 31st October.
The year 2019 was a milestone for the protection of intellectual property rights (IPR) in Myanmar as four laws were enacted: the Trademark Law, the Industrial Design Law, the Patent Law and the Copyright Law (the IP Laws). In addition, as a pilot step in October 2020, the Department of Intellectual Property (DIP) made the online trademark registration system – during its initial ‘soft opening’ – available to old or existing trademarks in the market, using the World Intellectual Property Organization’s (WIPO’s) filing system. At the time of writing, the soft opening period of the online trademark registration system is still ongoing. During a webinar jointly organised by EuroCham Myanmar and the South-East Asia IP SME Helpdesk in late January 2021, the Deputy Director General of the DIP announced that the second round of the soft opening for the registration of old trademarks (the transition period until the grand opening of the new registration system for trademarks) would commence shortly. However, as of early October 2022, the second round of the soft opening had not yet started and the implementation timeline remains unclear.
Slow progress in the regulatory framework since 2020
At the time of writing, it seems that no applications for trademark registration have been approved, and there was no significant development in the regulatory framework regarding IPR (and especially trademark protection) between the beginning of the year 2022 and October 2022 by the State Administration Council (SAC). According to an internal meeting of the SAC’s Ministry of Commerce (MoC) on 11 June 2022, over 30 000 trademark applications were filed during the first round of registration, and some of these (an unspecified number) have been pending since the soft opening of 2020. There have been no public announcements regarding a timeline that specifies when registered trademarks will be approved (i.e. legally protected). The implementation of the Trademark Law has been pending implementation since late 2020, and its coming into force is crucial for the procedures and approval mechanisms necessary for trademark registrations.
IPR protection in Myanmar, both from a legal and an awareness raising perspective, progressed in the right direction in 2018–2019. However, the implementation and expected enforcement of this whole new legal framework (the IP Laws of 2019) was delayed due to the combination of three successive waves of COVID-19 in 2020–2021, the political crisis that started in February 2021 and the lack of necessary follow-up measures during recent years.
2022: A promising year for IP in Myanmar?
In 2022, the DIP (under the MoC) initiated several activities to revitalise the implementation process for IP protection in the country after a hiatus of almost a year.
One of the first activities was the official launch of a special helpdesk in January 2022, this was quickly followed by the organisation of a Helpdesk Training to ensure that officers from the different helpdesk counters across the country would be able to provide valid and quick responses to public inquiries on IP-related matters and trademark applications in Myanmar.
In order to enhance the understanding of the processes involved with the trademark registration system and the Trademark Law of 2019, two rounds of virtual training courses on how to apply for trademark registration were conducted by the DIP in February and July 2022 (these representative trainings are intended to be delivered on a regular basis). In addition, the website of the DIP and its social media platforms (especially its Facebook page and YouTube channel) became active again, sharing the DIP’s developments and activities in 2022. Furthermore, on 1 July 2022, the MoC issued Notification No. 44/2022, which specifies the required forms for filing and prosecuting trademarks under the 2019 Trademark Law. Although there are detailed requirements for each of the 19 forms (available in a bilingual format (English/Burmese) on the DIP’s website), procedural guidance from the DIP regarding the use and submission of these forms is still expected to be issued. Alongside the above, the announcement of the official fees for each filing/prosecution action will be the last step needed for Myanmar to enter the second phase of the soft opening.
From global challenges …
As well as the difficulties caused by the disruption in global supply chains and the spike in global oil prices, Myanmar’s economy is also being negatively affected by domestic political instability. According to the World Bank’s latest Myanmar Economic Monitor (July 2022), Myanmar’s economy contracted 18% last year. Undoubtedly, SMEs have been severely hit by this downturn as they operate with little or no safety nets.
In addition, import restrictions set by the SAC created additional bottlenecks in the supply chain for all businesses, including SMEs. For instance, the artificial supply restriction and minimal changes in demand, have resulted in illicit trade filling the market gap left by formal trade. According to statistics from the SAC’s Anti-Illegal Trade Steering Committee, the value of illicit goods seized in the first 6 months of 2022 was about 1.6 times higher than the value of illicit goods seized in the whole year of 2021 – a figure that explicitly indicates the huge increase in illicit trade.
Slow economic growth and booming illicit trade have noticeable consequences for SMEs (which usually have little legal protection for their IPR). For example, an authorised local SME importer of pet food from Thailand has claimed that illicit trade (covering both parallel imports and fake products) involving the brands that they are importing is estimated to have doubled during the last 6–9 months. Another local SME providing logistics and customs clearance services also echoed this concern: their activities have been contracted by two or three times due to difficulties in legal trade caused by the expansion in illicit trade. The lack of progress regarding the implementation of the IP Laws also means that there may be legal blackholes or confusion even if one chooses to go ahead with litigation to fight importers of illicit/fake products.
… to a brighter outlook for SMEs
Under the current conditions caused by the situation described above, some SMEs are diverting (or thinking about diverting) their investments from Myanmar to neighboring countries, for example Thailand. This divestment will further cripple the economy and result in a loss of employment opportunities that will lead to further waves of emigration. In light of this, it is important that legal protection for IPR is implemented as quickly as possible (in tandem with effective cracking down on illicit trade). This legal protection would represent one of many potential factors that would enable SMEs to stay and thrive in the local economy of Myanmar.
A proper infrastructure and technical assistance, the competent examination of IPR filings, an improvement of the relevant human resources (particularly through regular trainings), and increased awareness in both the public and private sectors: these are the other factors to be considered while enhancing IPR protection in Myanmar in accordance with international practices and standards. SMEs should also be incentivised and supported by the IP ecosystem (for example through the organisation of more SME-focused awareness raising events on IP in Myanmar and in terms of the registration of trademarks). SMEs are expected to be the future of economic growth in Myanmar, so it is important that they feel supported and helped.