You have thought about what IP you have in your business, the different types of IP rights and about how you can use them to protect your assets as you expand your business overseas.
Now, it’s time to get strategic and selective about what IP you are going to protect.
IP protection is often about striking a balance between achieving maximum protection and managing IP costs. The solutions you choose to protect your IP in foreign markets will need to reflect your broader commercial business strategy.
Protecting every element of your IP in every possible potential market may seem like the safest bet, but it’s probably not the most practical.
Five steps to develop your international IP strategy
Aside from the cost of filing registrations in multiple countries, your IP rights will also need to be asserted and maintained – and that can generate significant legal, administrative and translation costs. For example, if you are filing applications in multiple countries, all your filing costs may need to be paid upfront, potentially draining capital that you could otherwise use to develop your products and brand in your existing markets. A considered IP strategy maximises protection while minimising costs:
1. Review your international strategy
Your IP strategy will be driven by your internationalisation strategy, so it’s important to be clear as early as possible what you want that to be. Ask yourself which markets offer the best potential for your product. The answer may depend on macro factors like population and national wealth – or it may come down to finding the best cultural fit.
Also consider whether you want to manage distribution yourself, or outsource to local distributors. Rather than exporting yourself, you may want to consider selling the rights to your IP to a third party to manufacture and/or distribute in specific markets.
2. Do your research
Once you have defined which countries you are interested in exporting to, look into the IP arrangements that apply in that jurisdiction.
Protecting your own IP is your first priority, but you will also need to ensure that as you expand to a new country, you do not breach someone else’s IP rights.
Your product or brand may be unique in your own market, but you will need to ensure you are protected from costly legal challenges from potential competitors.
IP specialists, such as IP attorneys, can provide comprehensive searches for you, but doing your own research first can help to shape your export strategy and ensure there are no nasty surprises.
Once you file applications to protect your IP, the foreign IP offices will send you an examination report if they find deficiencies in your application. They will also let you know if your claimed IP right conflicts with those of others.
Another key aspect of researching your market is understanding how your brand will translate on foreign shores. For example, check that your product or brand’s name and associated imagery translate well into other languages and cultures – and will not be considered offensive or unlucky.
In Taiwan, for example, the Taiwan Intellectual Property Office (TIPO) rejected a trademark containing the term ‘taibaz’ as a trademark for bicycles, cars and spare parts. ‘Taibaz’ means an upstart from Taiwan, which is used in China to disparage Taiwanese people. Use of the word as a trademark would have produced a negative impression of the Taiwanese people.
Once you have defined which countries you are interested in exporting to, investigate their IP arrangements. Search for products and brands similar to yours and check what IP protections they have in place. Check that any brand names and trademarks are appropriate for your export markets, and can be effectively translated in the native languages. The IP databases of many IP offices are freely accessible on the Internet.
- UK trademark database: www.gov.uk/search-for-trademark
- US trademark database: www.uspto.gov/trademarks/search
- Hong Kong trademark database: www.ipd.gov.hk/eng/electronic_services
- Vietnam trademark database: www.trademark-search.marcaria.com/en/asia/vietnam-trademark-search
- ASEAN trademark database: www.asean-tmview.org/tmview
3. Choose your solutions
What is the most valuable component of your IP? Is it the design of your product? Its technical features? Your brand? Or a combination of all three? Most small to medium enterprises will need to decide which element (or elements) of their product to cover with IP protection. And the answer is not always straightforward.
HEGS Pegs: When Scott Boocock first came up with the design for the HEGS peg, he protected the hook feature with a patent as this was an inventive element. But he soon realised that his IP extended much further than that.
“When we did a novelty check on the Heg peg, we discovered it had six patentable elements. We have got a patent on the hook, but also on the design, which means people cannot make a peg with bigger or smaller hooks”
We have also protected the brand, and trademarked the stylised ‘H’.
Boocock says that he finds the trademarks even more valuable than the patents,
“Because your brand is everything. People buy because of the brand; they buy it because of the products. They do not buy because of the patents. That is just an extra protection to prevent people from copying the Heg peg.”
4. Understand the costs
Protecting your IP across multiple markets can be an expensive exercise, especially if you are protecting more than one element of your product. Not long before this book went to print, I spoke to a business owner who told me that his company had applied for trademark and patent registration in multiple countries, even though most of its sales were still being made at home. He reflected (rather regretfully) that he had spent around $600,000 on IP protection. He also said that it probably would have been smarter to focus on building a successful global marketing and distribution strategy, before spending money on global IP protection.
While protecting everything upfront may be the best defence, it may prove to be financially out of reach. This is where you need to be very clear about where the value of your product lies.
If the value really is in the IP, then you need to take appropriate steps to protect it in the markets you care about most.
Balance the costs against the potential cost to your business if your product was copied and sold by a competitor with no recourse available.
HEGS Pegs founder, Boocock, agrees that if you are already selling in multiple markets, the cost of the right IP protection is well worth it. He says:
“It has cost a lot of money, over $200,000, but it does give you a lot of protection when you need it. But the money is not just lost – it’s an actual asset on the balance sheet that you can sell. Every time I go back to the valuation of the company, it’s all based around that patent becoming stronger and stronger, and more valuable as the business grows.”
Before you start trademarking and patenting your assets, research the cost of IP protection in your target market or markets and think about how much you are prepared to invest upfront. Also consider whether there are expenses that can be deferred until later, without exposing the company to too much risk. You may find that strategies that focus on enforcement may be more cost-effective, and that you can use grace periods for filing to your advantage.
5. Get expert help
Finding the right IP strategy can be complex, and no matter how much research you do, it’s likely that you will still benefit from professional IP advice. Professionals who specialise in international IP protection can offer solutions that you have not yet considered, and can also give you access to the benefit of their experience.
