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Singapore – Proposed Legislation To Allow Beneficial Ownership To Be Recorded In IP Registers.

29 November, 2013

 

Legal News & Analysis – Asia Pacific – Singapore – Intellectual Property

 

Introduction


In a further step in the implementation of the IP Hub Master Plan, the Government has introduced draft amendments to various intellectual property legislation to allow the beneficial owners of registered intellectual property rights (“IPRs”) under an express trust to be registered on the Patents, Trade Marks or Registered Design registers respectively. This is part of an effort to promote greater transparency of the interests in registered IPRs. The amendments and their effect are summarised below.


Proposed Amendments To The Patents Act (Cap 221, 2005 Ed.), Trade Marks Act (Cap 332, 2005 Ed.) And Registered Designs Act (Cap 266, 2005 Ed)


In September this year IPOS launched a Public Consultation on a proposal to record beneficial owners of express trusts on the Patents, Trade Marks and Registered Designs Register. These beneficial owners are those for whose benefit the trustees, who are legal owners, hold the IPRs in trust. The trust itself, in order to be considered an express trust, must be legally documented in the form of a trust deed.


The initiative is in line with the Government’s IP Hub Master Plan, which was published in April of this year. In it, the Government had called for greater transparency in the IP market place through the greater availability of IP transaction-related information. The aim is to aid due diligence efforts and facilitate valuation of IPRs, in turn helping to facilitate investor decision making and promoting transactions in IPRs (see “IP Hub Master Plan Report”, April 2013, Paragraphs 3.5.3 – 3.5.4).

 

As a result of the Public Consultation process, the Government has published the proposed amendments to the patents, trade marks and registered designs legislation. The proposed revisions are identical in each of the three Acts, and affect Section 42 of the Patents Act, Section 53 of the Registered Designs Act and Section 40 of the Trade Marks Act respectively. The proposed amendments allow for the recording of a notice of the existence of an express trust, or of the beneficiary of such a trust. The recording of the notice is optional, and failure to record the names of beneficial owners of express trusts will not void the express trusts. Recording would, however, give public notice of the existence of any express trusts. In the absence of such a notice, it would be possible for the purchaser of the registered IPRs to claim that they had no notice of the trust, and to attempt to deprive the beneficial owner of the trust asset. This could lead to ownership disputes and litigation.


The proposed amendment seeks to expand the current range of registrable transactions involving IPRs. Assignments, grants of licences, and any other security interests are already currently registrable for trade marks (Section 39 of the Trade Marks Act). In relation to patents, in addition to assignments and grants of licences, mortgages are also registrable (Section 43 of the Patents Act), while “any other security interest” will be added to the categories of registrable transactions made when the amendments contained in the Patents (Amendment) Act 2012 come into effect on 11 January 2014. On the other hand, Section 53 of the Registered Designs Act is already broad in its coverage, allowing for the recording of “particulars of transactions affecting rights in registered designs and applications for registration of designs”. The ability to register a wide range of interests in IPRs and related transactions will, with the proposed extension to cover trusts, allow for a high degree of transparency in the IPR market place.


Concluding Words


The proposed amendments to the respective IP legislation are a small step in the Government’s implementation of the IP Hub Master Plan. It is nonetheless important in that it will allow for the public notification of beneficial interests in IPRs which was not hitherto available. Quite apart from improving transparency in the IP market place, such a move will also help reduce the need to litigate over ownership rights. It is to this end that IP rights owners should consider carefully the benefits of registering any express trusts affecting their IPRs once the proposed amendments take effect.


Rajah & Tann

 

Lau Kok Keng, Partner, Rajah & Tann 

kok.keng.lau@rajahtann.com


Nicholas Lauw, Partner, Rajah & Tann 

nicholas.lauw@rajahtann.com

 

Wendy Low, Partner, Rajah & Tann 

wendy.low@rajahtann.com


Darren King, Rajah & Tann

darren.king@rajahtann.com


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