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Home / Washington Business - March/April 2007 / Legal Matters: Protecting your intellectual property overseas |
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Legal Matters: Protecting your intellectual property overseas |
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Written On: March/April 2007 |
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Written By: by Michael Urbaitis |
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Michael Urbaitis is an attorney at Miller Nash LLP, a multi-specialty law firm with offices throughout the Northwest. Urbaitis focuses his practice on intellectual property matters, including patent prosecution.
Conducting business in foreign countries inevitably puts your intellectual property at risk. You can lessen that risk by arming yourself with a functional understanding of the issues and pitfalls involved with protecting IP outside the United States.
A wide range of new opportunities exists for businesses seeking to expand their goods and services in world markets, and the potential benefits are many. But there is good reason to exercise caution, whether you’re protecting patents, trademarks, copyrights or trade secrets.
Let’s say that a woman from Snohomish develops a brilliant concept for retaining earbud cords for MP3 players when not in use. She applies for U.S. patent protection for her invention, applies for trademarks for her product’s name and logo, and registers copyrights on the technical drawings. Then she heads across the Pacific to find a manufacturing partner. She meets with several firms and presents her concept, but no deals result. Seven months later, she is astounded to see her concept on the shelf at the Everett Costco—made by one of the overseas firms with which she met.
In the United States, this may be grounds for legal action for infringement. But while U.S. patents, trademarks and copyrights provide rights within this country and its territories, they do not prevent unauthorized manufacture and sale in foreign countries. To secure rights in another country, you must apply for those rights in that country. This is made easier thanks to various international IP treaties that are now in place. Registering rights abroad is a necessary component of a successful foreign business strategy, but doing it right necessitates a clear grasp of each country’s IP and other governing laws. These include foreign laws relating to patent, trademark, copyright and other IP laws; foreign product liability, consumer protection and contract laws; foreign antitrust and tax laws; and applicable import and export laws and regulations.
Securing foreign IP rights alone is not sufficient to maintain strategic business value. Those IP rights, as in the United States, must be actively monitored and defended. Furthermore, insight into each country’s economic and political situation will be invaluable to successfully navigating foreign markets.
Qualified IP legal counsel can help and can be critical to your ultimate success. You must also pay attention to such factors as U.S. antitrust and competition issues, European competition law, foreign laws that might supersede contract terms, financial matters (such as currencies, exchange rates and taxes), technical assistance and quality control parameters, jurisdictional choices and arbitration rules.
Here are some practical ways to protect your intellectual property:
• Obtain foreign IP rights—Apply or register for patents, trademarks and copyrights in the countries you intend to do business. Your domestic legal counsel can help by collaborating with knowledgeable and reputable foreign legal counsel with IP experience in these countries.
• Know your partners—Determine the reputability of prospective partners by learning how long they’ve been in business, who the actual owners are and with whom they might be doing business. Rely on business referrals when possible.
• Teach partners about IP control—Work closely with your international partners to help them understand the importance of strict control.
• Make frequent visits—Go to your partners’ facilities often to inspect operations and conduct audits.
• Control the quality—Make sure your agreements specifically address quality control and adherence to appropriate industry standards.
• Protect against piracy—Gray market and black market goods are a serious threat. Take preventive measures early and diligently police activities in your market. Create awareness among foreign partners of the financial downside to counterfeit products.
This is daunting stuff, but the rewards reaped from a global economy are such that American entities are compelled to conduct business well beyond our borders. Knowing your way around international IP issues is a good place to start. By all means, proceed—but do so wisely.
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