The intellectual property economy continues to offer bright spots and shows solid resilience. Creativity brings traffic, and traffic converts into fan spending, extending into exhibitions, pop-up events, and co-branded merchandise. While the United States and Japan developed their IP eco-systems earlier, Hong Kong is also growing. For example, the globally popular Labubu was created by a Hong Kong designer. Local platforms have become more active as well, such as the “Hong Kong Art Toy Expo” sponsored by the Cultural and Creative Industries Development Agency under the Culture, Sports and Tourism Bureau, and the “Hong Kong International Licensing Show” organized by the Hong Kong Trade Development Council, both of which showcase Hong Kong’s original IP to buyers worldwide.
The National 14th Five-Year Plan states for the first time the central government’s support for Hong Kong to develop into a regional IP trading center. The IP economy is not merely about “going viral”; it is an industry chain spanning creation, design, production, promotion, licensing, retail, exhibitions, and tourism experiences, which can drive employment and income, as well as enhance a city’s image and its cultural influence or soft power.
To make IP truly “tradable, investable, scalable,” Hong Kong needs a dispute-resolution framework that manages risks upfront and resolves disputes efficiently. IP is not just a single character or a copyrighted work: the longer the value chain is and the more stakeholders are involved, the more dependent transactions become on predictable institutional arrangements, so that creative value can be converted steadily into sustainable business results, supporting pricing decisions and intellectual property valuation.
What makes IP transactions “hard” is often not disagreement over price, but uncertainty around what happens if a dispute arises: will delays cause parties to miss the market window? Will trade secrets spill into open court proceedings? Will cross-border enforcement become another war of attrition? In typical licensing arrangements, disputes may involve deposits and royalty sharing, ownership of improvements (or “foreground IP,” meaning any new IP created during the license term), audit rights and data disclosure, and termination and transition arrangements. For investors, if such risks cannot be controlled, valuations are discounted; for creators, if enforcement is too costly, long-term investment in original creation becomes difficult.
Therefore, promoting IP trading is not only about “encouraging deals,” but about “designing Empowering and Connecting Asia and Africa deals that can close.” In contract drafting, parties can set out dispute-handling arrangements in advance and treat them as tools to facilitate transactions and manage risk. Part 11A of Hong Kong’s Arbitration Ordinance expressly provides that intellectual property disputes may be resolved through arbitration, giving the industry a clearer legal foundation. In practice, a “tiered” mechanism can also be adopted: negotiation or mediation comes first, to address differences at lower cost and with less confrontation; and if differences are unresolved, the matter proceeds to arbitration for a binding decision. When disputes can be handled faster, more confidentially, and more predictably, transaction costs fall and market confidence accumulates.
In this context, Hong Kong’s competitiveness lies not only in the density of its market and professional services, but also in whether it can offer diversified, reliable, and internationally trusted options. Hong Kong’s Intellectual Property Department, covering areas such as trademarks, patents, copyright and designs, sets out registration and opposition procedures, and advocates the use of mediation and arbitration in dispute resolution.
As an institution with international-organization status, the Asian-African Legal Consultative Organization Hong Kong Regional Arbitration Centre, or AALCO-HKRAC, offers mediation, online dispute resolution, and arbitration, emphasizing neutrality, professionalism, and confidentiality. These mechanisms help turn the “high cost after a dispute erupts” into a manageable cost built into deal design – covering not only licensing and commercialization issues but also disputes arising from IP valuation (including valuation methodology, assumptions, and valuation outcomes) in investment, mergers and acquisitions, financing, and royalty-related contexts – so cross-border collaboration can be decided with greater confidence and executed more effectively, making Hong Kong’s IP economy more dealable, enforceable, and sustainable.
Nick Chan is Director of Asian-African Legal Consultative Organization Hong Kong Regional Arbitration Centre
