Hong Kong's IP-driven economy in the making

By Oswald Chan and Liu Yifan in Hong Kong

Hong Kong's IP-driven economy in the making

City to advance as a patent trading hub with support of nation and close regional ties

Hong Kong and the whole of the Guangdong-Hong Kong-Macao Greater Bay Area are well-placed to become a key center in a global economy that is increasingly driven by intangible assets.

This was the view expressed by government officials and business leaders at the 12th Business of Intellectual Property Asia Forum held on Thursday and Friday, organized by the government of the Hong Kong Special Administrative Region, Hong Kong Trade Development Council, and the Hong Kong Design Centre.

Themed “Creating New Value, Discovering New Frontiers”, the two-day forum brought together global IP experts and business leaders to discuss the latest trends and opportunities in the Asian IP market as well as IP developments in the industrial metaverse. The event attracted 70 high-profile global IP experts from 12 countries and regions.

In a keynote speech, Hong Kong SAR Chief Executive John Lee Ka-chiu described IP as “the oil of the 21st century” in his opening remarks, saying it will be critical to bringing innovation and the business world together and powering a knowledge-based economy.

“Our country’s national 14th Five-year Plan (2021-25) firmly supports Hong Kong’s rise as a regional IP trading center. It is one of the eight important sectors to drive our future development, and to lead the way in – for the mainland and for the Asian region as a whole,” Lee said.

The chief executive said the government will work to implement the international trademark registration system, and update the copyright regime.

The government will enhance the city’s patent examiners’ capability so that by 2030, they will have the institutional autonomy to conduct substantive patent examinations for strengthening crossboundary IP protection. It will also provide IP training for some 5,000 practitioners across various industries over the next five years, according to Lee.

The chief executive told the forum that Hong Kong’s infrastructure and capabilities for research and development continue to expand and innovate. According to the World Intellectual Property Organization’s Global Innovation Index this year, Hong Kong ranks 14th, while the Shenzhen-Hong Kong-Guangzhou science and technology cluster ranks second.

“This is a bright reflection of the broader Guangdong-Hong KongMacao Greater Bay Area and its determination to rise as one of the world’s great innovation and technology centers, with Hong Kong playing a pivotal role in its progress,” Lee said.

Addressing the same event, Shen Changyu, commissioner of the China National Intellectual Property Administration, said that “the central government policy is to help Hong Kong to develop as an original IP trading hub.”

“In IP examination, talent cultivation and information systems, we offer necessary favors to Hong Kong. We set up the IP alternate qualification examination center in Hong Kong and are planning favorable arrangements for Hong Kong IP applicants to the mainland jurisdiction,” Shen said. “All of those efforts are to promote the synergy effect between the mainland and Hong Kong in IP development.”

Shen also announced that a pilot project for prioritizing the examination of qualified invention-patent applications filed by Hong Kong applicants on the Chinese mainland will be launched on Jan 1.

The pilot project aims to facilitate Hong Kong applicants in seeking patent protection on the Chinese mainland to safeguard against the exploitation and commercialization of their inventions. It will be jointly rolled out by the CNIPA, the Intellectual Property Department of Hong Kong, and the intellectual property authorities of Guangdong province and Shenzhen.

Under the project, Hong Kong applicants for invention-patent applications that meet the criteria may request prioritized examination of their applications by the CNIPA. Requests can be submitted to the CNIPA’s representative office in Guangzhou or Shenzhen.

Director-General of the World Intellectual Property Organization Daren Tang Heng Shim highlighted the increasingly important role that intangible assets will play in Hong Kong’s future economic growth.

First, a growing number of Hong Kong-listed firms will be able to derive most of the value for their intangible assets, according to Tang. “Nine of the top 15 mainland firms ranked by intangible asset intensity, now trade shares in Hong Kong.”

“Patent and trademark pledge financing on the mainland in 2021 passed the 300-billion-yuan ($42.7 billion) mark, up 40 percent year-on-year. Given Hong Kong’s financial expertise and geostrategic location, Hong Kong and the Greater Bay Area are well-placed to play a leading role in the development of IP finance,” Tang said.

“Trade flows linked to knowledge and digitalization grew twice as fast as trade flows relating to goods, with IP data and digital services leading the way for an economy like Hong Kong,” the WIPO chief added.

Trademark activity in Hong Kong grew by close to 10 percent in 2021 which doubled the global average. The number of patents filed by Hong Kong residents around the world has increased 50 percent, in the areas of digital communications and computer technology, according to Tang.

“With a strong IP protection regime, efficient IP commercialization, deep and liquid capital and sound judicial system, Hong Kong is uniquely placed to foster a vigorous IP ecosystem in the Greater Bay Area, the rest of the Chinese mainland, and Asia at large,” said Margaret Fong Shun-man, executive director of the HKTDC.