Whether you are setting-up shop in a new country, or just selling your stuff there, you will need a strategy for managing your intellectual property (IP) as you expand internationally.
your mind. It can be a totally new concept or invention, an innovative design, a distinctive brand, or a combination of all three.
Whatever form your IP takes, it is one of your most important business assets – it’s what differentiates you from your competitors, and while it is an intangible asset, it has a very tangible value. That is why you should consider protecting it from being used by other individuals or businesses.
A lot of business owners do not know what IP they should protect. All businesses have IP, but many business owners have never stopped to think through, in detail, what that IP is and which bits of it they need to protect at home and in international markets.
Many business owners are also unfamiliar with the law that applies to taking their IP overseas, so they do not know what options are available. For example, many do not realise that even if they protect their IP in their home market, this provides no protection beyond domestic shores – potentially providing third parties with the opportunity to copy and sell a product in other jurisdictions. Even fewer have a strategy in place for protecting their IP abroad.
A couple of quick examples
If you are selling in an offshore market without protection, there is nothing to stop someone from reverse engineering and copying your product – right down to its packaging and logo. Or they could package something so that it looks very similar to your product – not quite close enough to be considered as passing off as your product or trademark, but close enough to damage your reputation.
For example, a small Dutch company produced additives in China under the name Roi Jaguar. Their Chinese general manager was tasked with making sure that the brand was protected in accordance with Chinese law. He eventually left the company and, soon after, a similar product called Roi Lynx appeared on the Indian market.
The Dutch company discovered that after quitting the job, its former general manager had begun competing against it with similar products. It also found out that he had registered the trademarks of the company in China in his own name instead of under the name of the Dutch company.
The situation escalated after the former manager claimed that the Dutch company owed him money – a claim it refuted. The former general manager then went to the local Authority of Industry and Commerce (AIC) and showed them Roi Jaguar’s trademark certificate, which was registered in his name. AIC confiscated the Dutch company’s products which carried the name Roi Jaguar and had infringed the Chinese trademark certificate.
As the former general manager owned Roi Jaguar’s Chinese trademark registration, he was also able to force the Dutch company to close-down its business with regard to the Roi Jaguar brand.
The company took action against the former general manager and was able to prove that the trademark registration had been carried out in bad faith because the general manager had a pre-existing relationship with the company. The company filed for a trademark cancellation on the grounds of bad faith and then applied for the trademark itself, registering the wordmark, logo and the Chinese character name of its product.
On the other hand, you might have protected your IP in your home country, but you may not know if someone else has already protected that same IP in their country. You may not know that you are actually infringing on someone else’s rights until you seek protection for your own IP and find that you cannot get it because it conflicts with someone else’s registration. Or, you may get a nasty letter from a foreign-based law firm, telling you that you are infringing on their clients’ rights. This can be the result of a genuine situation where that trademark was already in use in that market for the same or different purposes. However, it’s not unusual for this to be a result of IP squatting, where a third party registers their right to the IP with the hope of selling it for financial gain later on.
Types of IP you can protect
In any business there will be a range of IP that you can protect. This includes:
- Names and images
- Confidential information
- Written works
- Architectural design
- Computer programs
- Musical compositions
- Photographs, sculpture, architecture
- Maps and technical drawings
All these things are covered by IP rights which are like any other property right. IP rights allow creators or owners of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation.
These rights are outlined in Article 27 of the Universal Declaration of Human Rights, which provides for the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions.
A trademark typically protects brand names and logos used on goods and services.
Examples of world-famous trademarks include:
- The word ‘Nike’ with its ‘swoosh’ logo
- The word ‘McDonalds’ with its ‘golden arches’ logo
A trademark can include words, letters, names, phrases, colours, symbols, pictures, signatures, shapes, scents, sounds or even a moving image. A trademark basically represents a business’ brand in a sign.
Trademark protection ensures that the owners of marks have the exclusive right to use them to identify goods or services, or to authorise others to use them in return for payment. The period of protection varies, but a trademark can be renewed indefinitely.
Design is the shape, configuration, pattern and ornamentation of a product – essentially, what it looks like – not what it does. A design may consist of three-dimensional features such as the shape or surface of an article, or two-dimensional features such as patterns, lines or colours.
In general, three-dimensional works that are one-off pieces will be protected under copyright law. Copyright protection applies automatically when the work is created, whether it is a drawing, sculpture, model of a house or other three-dimensional ‘work’.
Copyright laws grant authors, artists and other creators protection for their literary and artistic creations, generally referred to as ‘works’. A closely associated field is ‘related rights’ or rights related to copyright that encompass rights similar or identical to those of copyright, although sometimes more limited and of shorter duration.
Works covered by copyright include, but are not limited to, novels, poems, plays, reference works, newspapers, advertisements, computer programs, databases, films, musical compositions, choreography, paintings, drawings, photographs, sculpture, architecture, maps and technical drawings.