Export Strategy For Exporters
The importance of safeguarding the protection of intellectual property (IP) rights usually is apparent to Malaysian exporters once it’s far too late, i.e., when confronted by an infringer or an infringement lawsuit is brought against them. This is usually because of an inadequacy of understanding the importance and value of IP rights as well as the importance they play in contemporary business. When they plan their strategy for export, Many exporters fail to include the protection of their IP rights overseas or make it the final step of their plan.
This article aims to increase awareness to Malaysian exporters of the methods and importance of protecting their IP rights overseas and how exporters can ensure that their products are not violating the rights to IP of other parties and the ways exporters can earn additional income streams by exporting their IP, without the associated product.
DO NOT UNDERESTIMATE THE IP RIGHTS IN YOUR PRODUCT
IP is present in nearly every aspect of the product. It is IP in the packaging of the product, in the knowledge and technology used in the creation and production of the product, and also in the labels and brochures that accompany the product. In the event that these IP rights that are embedded within the product and in the trade name aren’t secured, the unnecessary expenses and risks could be a threat to the survival of the business or sale of the product on the market outside of the country.
TIMELY ACTION REQUIRED
If the product sells internationally, it’s likely that another company would make an identical or similar product and attempt to earn some profit. Also, if the exporter promotes extensively overseas and their business name is known to the local population, another company could put the same or similar name to their product, taking advantage of the image of the brand name. If there is no IP security, it could take a long time and cost more to stop these illegal activities, if feasible. In certain instances, it could not be possible to stop the offending act until it is too late. For example, if an invention is displayed or sold internationally before submitting any application for patent rights in the country, the disclosure too early can result in losing novelty, one of the requirements to determine whether an invention is patentable. This renders the invention unpatentable, and the exporter will lose the potential for 20 years to monopolize over this invention. Exporters should follow the golden rule of IP application – seek IP rights before introducing the product to the marketplace and not after the product has been successful and infringers have popped up.
To prevent being infringing on the rights of others in the foreign market, exporters must look up the database of trademarks registered as well as patents and industrial designs in the nation they are planning to sell their goods to. The search results for trademarks, industrial designs, and patents will tell you if the same brand name or design, or invention exists. Since IP rights are local, any search must be conducted through the IP office in the country or regional IP office in the event that there is one in the country. The report of a search provided by the IP office helps in determining whether there is registration ability of trademarks and industrial design, as well as the patentability of a particular product.
If there exists a similar trademark, the exporter could change his trademark and then sell his products to the international market. If there exists a similar granted patent or industrial design that has been registered, an exporter must consider exporting its product to countries in which a similar patent or industrial design is not in existence. In addition, if it is feasible, it must innovate the product to allow the product to become patentable or design registered. Exporters should seek the expert counsel of patent agents regarding this since the issues surrounding the patentability of new products can be pretty complicated.
ISSUES TO CONSIDER WHEN CREATING A TRADEMARK
When it comes to trademarks, care must be taken when choosing the right name with respect to the nation that the product is being shipped to. A useless word in Malaysia might be a snide term in another country. It could also not be pronounced by the inhabitants of the country.
It is also worth considering whether you should file your mark in its translation form, i.e., using the language of your local market, as an effective measure to prevent the potential for infringement of your trademark. An example of this is one giant of the global beverage industry, which has registered “ke you ke, le,” which is that is, the Chinese variant of the trademark’s famous name in China, and Nestle owns the Chinese variant its “KIT KAT” mark.
Starbucks might have been able to avoid costly legal costs if they had signed their Chinese versions of its famous trademark. Their mark was stolen within China by a local coffee chain that was using the trademark “XINGBAKE.” “XINGBAKE” stands for “Beaker” “XING” means “star” in Chinese, and the word “BAKE” sounds like “Buck.” It was a blessing for Starbucks, their customers, the Chinese courts decided in their favor at the conclusion of the two-year legal dispute.
Exporters should conduct proper research prior to creating an overseas mark. Market. A mark that isn’t explicitly describing the products that it is aimed at in one nation may be descriptive in another. The degree to which a mark can be described is dependent on how the phrase is interpreted by traders who are in the same line of business as well as consumers of the products. A recent instance in Spain is a perfect illustration of this. In Spain, the trademark ‘MATRATZEN is allowed to be registered for mattresses and related items even though “Matratzen” refers to mattresses in German and is not permitted the registration process in Germany.
PROTECTION OF COPYRIGHTS
It is global protection of work that is copyright-protected. In many countries, including Malaysia, registration is usually not necessary, and copyright is incorporated as a work expressing form. In the end, copyright protection is contingent on the laws of the nation. Before publishing a work outside of the country, it is essential to research the extent of protection that is available, as well as the legal requirements that are specific to copyright protection in the nations where protection is sought.
IP RIGHTS IN LICENSING, FRANCHISING & JOINT VENTURES
Secured IP rights in other countries allow the owner to earn more revenue through the IP. This is achieved by executing licensing franchises, joint ventures, and franchising agreements that give the owner the right to authorize an unrelated third party to use their trademarks or service marks registered by them or permit them to produce and distribute their goods with a royalty payment. This means that companies make additional profits while maintaining the right to use their designs, inventions, or trademarks. The possession of IP rights also grants more leverage and bargaining power to businesses when negotiations with other businesses or individuals.
OWNERSHIP OF THE IP RIGHTS
Another crucial aspect of protecting IP rights in other countries is the question of ownership of IP rights in the country that is frequently overlooked. The distributor, importer joint venture partner, or franchisee usually registers the IP rights in their own name, as if they have their own IP rights. Care should be taken in all agreements with foreign parties to ensure all IP rights subsisting in the product, and any improvements/innovation in the product belongs to the Malaysian owner. Exporters should ensure their IP rights aren’t ‘hijacked from their distributor in the foreign country, franchisee, or the joint venture partners. The author personally knows of a situation in which some Malaysian distributors for an Indonesian manufacturing company requested registration of the company’s trademark on the territory of Malaysia even though ownership of the trademark belonged to the Indonesian manufacturer.
ENFORCEMENT OF IP RIGHTS
Achieving IP rights within an overseas company isn’t enough. Third parties are often able to adopt IP rights without consent. IP rights without consent from the owner. This is why Malaysian exporters must implement appropriate measures or obtain obligations from their distributors in order to ensure they have a close eye on any violation or misuse of IP rights within the marketplace. Remember, simply registering trademarks or industrial designs, patents, or trademarks are not a solution in and of itself. The government of the foreign country is not legally bound to investigate any acts that violate IP rights and provides the legal framework that allows the parties who are infringing could be prosecuted or sued. It is the ultimate duty to IP rights owners IP right owner ensure an eye on the marketplace and take necessary actions in a timely way.
Quick action when the offenders actions begin to be committed can lead to positive results, usually at a low cost. Delay in action could be detrimental to the person who owns the IP rights, as the perpetrator could decide to contest the legitimacy in the IP rights.
ESSENTIAL STEP IN EXPORT PLAN
Recognition of IP rights embedded in a product and the targeted efforts to obtain legal IP rights in other countries is necessary for obtaining legal rights that are enforceable. The selection of the countries and the identification of IP rights to protect must form an integral element of the company’s marketing, production and distribution plans. It shouldn’t be a final marketing effort. Unfortunately, the laws in all countries don’t offer the benefit of evaluating the market prior to filing for IP rights. Therefore applying for IP rights should be completed at the start of the export strategy, or perhaps earlier.
Note: All trademarks mentioned in the article are owned by the respective proprietors. The author is not claiming any rights to proprietary ownership whatsoever. They are only used to provide educational information.