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PINTAS Intellectual Property (IP) Globalisation Services
Why is it important to globalise your IP rights?
The business decision to enter foreign markets and export goods and services abroad is not without risks and challenges: exporting involves a considerable investment of financial, managerial, and production resources. Therefore, it requires careful planning and execution.
Companies generally need to make an assessment as to whether they are ready to embark on export operations and whether their product is indeed exportable. In assessing whether it has an exportable product, companies should consider various factors such as modification, license to export, compliance with norms or standards, after sale support, and reasonable export price, etc.
When faced with all these questions prior to launching a product in an export market, exporters often forget to consider intellectual property issues. This may prove costly and should be tackled by exporters before it is too late. What intellectual property (IP) issues should be taken into consideration when developing an export plan? What are the most common IP mistakes that should be avoided by exporters?
Pitfall No.1: Territorial Rights
Most IP rights are territorial, your rights only exist in the country/countries where your IP is registered. This may mean that your IP is not protected in the country where you are selling your goods and services into.
Solution: With our direct presence in Southeast Asia countries and established partnership in more than 180 countries, we at PINTAS can assist you to register your IPs early (preferably before you enter into a new market) in the countries where you are selling or planning to sell your goods or services into to avoid disappointments.
There are 3 routes to register your IP rights overseas, namely:
A. National Route:
To seek protection in individual countries separately by applying directly to national intellectual offices.
B. Regional Route
Some countries have established regional agreements for obtaining IP protection for an entire region with a single application. Examples are:-
C. International Route
We can also use the WIPO-administered systems of international filing and registration to simplify the process for simultaneously seeking IP protection in a large number of countries.
Pitfall No.2: Conflict of Laws
Different countries may have different IP laws or regulations. This is invariably a problem to traders which operate in more than one country.
Solution: PINTAS can advise on the IP laws and regulations of the country that you plan to enter into. Alternatively, hire a professional with extensive local knowledge to handle your IPs in that country.
Pitfall No.3: Language and Cultural Barrier
Lost in translation is a very real risk in the IP business. Patent claims may lose vital details after translation and in the worst case the translation may not reflect the invention at all. These minor errors in translation may severely undermine your IP protection. In Trademark, a badly selected mark may spell doom for a business.
Solution: Again, seek help from PINTAS. We have in our teams IP lawyers and patent engineers with a good grasp of both English and the local languages. They should also have a deep understanding of the local culture.
Pitfall No.4: IP Ownership: Who gets Custody?
When you are thinking of cooperating with a foreign person (be it in a joint venture, co-authorship, or co-inventorship capacity), you should always be clear about who should own the IP rights. Far too often, companies enter into a contract with a foreign company without having specific provisions for the ownership of the IP rights. This has become a highly litigious area, because when the cooperation ceases, both parties are likely to claim exclusive ownership over the IP rights.
Solution: PINTAS can help to make sure the ownership of IP rights is specifically provided in your contracts, stating clearly who should be the rights’ owner. In the case of a joint venture, it is preferable to retain your own IP rights and simply license the rights to the JV. This way, you will retain your rights after the dissolution of the JV, instead of participating in a legal tug-of- war over the rights with your former partner.
Pitfall No.5: Parallel Imports; Exhaustion of IP Rights
A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. So if you sell your products in China, you cannot prevent others from bringing the products into Malaysia on the ground of IP infringement. This is known as the doctrine of “First-sale” or “Exhaustion of Rights”, whereby your IP rights is said to be exhausted when you expose your product for sale in another country. Because businesses often sell their products for different prices in different countries, this means that someone can buy your products in a country where the price is cheaper and import the products into a country where the product can be sold for a higher price.
Solution: Different countries may have different stance on parallel import. The European Union for instance do not allow parallel import from countries outside of the union. You can rely on PINTAS to advise you on the local laws regarding parallel imports and wherever possible, and without running afoul of local licensing or antitrust laws, prohibitions on resale should be included in licensing and distribution agreements, in order to provide an action for breach of contract against the suppliers of the parallel imports.
Pitfall No.6: Are You Infringing The Rights of Others?
When you introduce your products or services into a new market/country your run the risk of infringing on other’s IP rights. The trade mark that you are using may have already being registered (refer to Pitfall No.1 and No.2). The technology in your products may belong to another party who holds the patent in that country.
Solution: A professional search should be carried out within the IP database of the country where you intend to enter your products/services into in order to ascertain the legality of your imports. And if there is no prior right being registered, proceed to register your IPs immediately.
Pitfall No.7: Deadlines; The Ticking Time Bomb.
Can’t imagine being late for your first date. You could do worse by missing a deadline for your IP application. Almost every IP application/ registration/proceeding has deadlines, however, different IP Offices will allocate different time period for you to take the necessary actions. These periods range from 2 weeks to 2 years. Therefore, keeping track of those deadlines is crucial to the survival of your IP Rights. While certain IP Regulations are more lenient towards the late comers with grace periods of certain lengths (although often with a handsome penalty fee); other IP Regulations are more draconian in that missing a deadline means your IP is “as dead as a Dodo”.
Solution: Write down the deadlines in your diary, stick yellow notepads everywhere. However it is advisable to use PINTAS’s proprietary docketing system to take care of your IP. This way you can sleep easier at night without having to worry about your deadlines.
Pitfall No.8: Early Disclosure of Your IP Rights Without Protection is Charity
Would you buy a car and give away the key to anyone? Not unless you are Oprah Winfrey. Disclosing your IP before you protect it is one of the most charitable acts known to men. By unveiling your invention to the public before you file for patent protection you may jeopardize your chances of getting a patent registration. It would also be a good opportunity for copycats to copy your technology while you have no locus standi (legal standing) to take any legal action. The same applies to trade mark as well.
Solution: Register your IP with PINTAS as soon as they are created and preferably before you show it to the public, unless you are feeling particularly charitable.
Pitfall No.9: The International IP Systems That You Could and Should Be Using
If you are planning to expand your business into several countries, then instead of filing your IP in each individual country, it may be advisable to make use of several International IP Systems/Mechanisms available to simultaneously apply/register your IP in various countries. International filing systems like the Madrid Protocol for trade marks, and PCT for patents should simplify your IP application process. Other systems like OHIM’s European Community Trade Mark and the EPO’s European Patent will grant trade mark or patent registration.
Solution: Seek advice from PINTAS on which systems to use. This because the international systems can only be used to file your IPs in the countries which are members to the systems. And systems like the Madrid Protocol, may not make economic sense if you have less than 5 countries to apply to, due to the high basic fee that you will have to pay and the high exchange rate between the Swiss Franc and Ringgit.
Pitfall No.10: The Perils of Licensing/Assignment
One of the ways to exploit your IP rights is by licensing your IPs to another party. Licensing is akin to putting your IPs up for rent. However, such licensing will not be possible if your IPs are not filed/registered. Therefore if you are planning to set up or introduce your franchise in another country, you will have to register your trade mark before you can license the use of your trade mark to your franchisee. The same is true with Patent. You can also buy or sell IPs by assignments. In essence an assignment is a change of ownership, like selling a property. Certain countries will allow you to assign your IP rights after filing while other countries require your rights to be registered. In most countries, both licensing and assignments must be registered with the IP office in order for them to take effect. Many businesses have been caught out by forgetting to register their assignments/licenses, thus they end up paying good money for nothing.
Solution: Hire PINTAS to represent you in preparing the licensing/assignment agreement and also to register them with the IP office. In a merger or acquisition, take care to include a provision in your contract to deal specifically with the IP rights of the companies.
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