Prepare for Piracy Abroad

As a business grows, its owners might face the question of whether to sell and/or manufacture its products abroad. Burgeoning foreign markets, such as those of China and India, are difficult to resist as venues for new business development. In addition to the vast number of potential new consumers residing there, production and distribution in these markets can substantially lower expenses and increase product volume.

However, many of these emerging markets lack the sophisticated legal structure to protect and enforce intellectual property rights in the form of patents, trademarks and copyrights. To compete for business abroad, it is vital to have a good understanding of intellectual property risks and prepare a business plan to minimize those risks. Apparel, footwear, home furnishings, music and entertainment (via counterfeit CDs and DVDs) are just a few of the industries faced with counterfeits and blatant infringements on a daily basis.

If you are considering going global, there are several steps you should take before launching your product into international markets. Apply for both trademarks (an indicator of the source of the product) and patents (which protect a unique product, manufacturing method, or chemical composition, no matter what brand or trademark is used).

Apply Early

The first critical step to protecting your intellectual property in the US and abroad is to file applications for the trademarks and patents of the company. Without filing, you will have no remedies against counterfeiting or infringement. It’s crucial to file the patent application before the invention has been made public anywhere in the world.

The first step in protecting your company’s patentable products, manufacturing methods, and chemical compositions across the globe is to file a US application. A US-based company can opt for either a provisional application or a traditional utility application; the other option, if it is the design or look of the product which is unique, is to file a design patent application (designs cannot be protected through a provisional filing). A provisional application is a placeholder. Although it is filed in the Patent Office and receives a filing date and serial number, the provisional application is never examined. The provisional patent application provides you with the opportunity to say “Patent Pending” anywhere in the world during the one-year term of the provisional filing. The one-year term gives the company the opportunity to see if the product, method or composition has commercial potential in a foreign market before embarking on the formal, much more expensive patent application process. However, the provisional application must be followed within the year by a traditional utility patent application filed both in the US and abroad to preserve the company’s nascent patent rights.

If a US patent has already been issued, and foreign filings were not made, then the company cannot acquire foreign patents. The timing is entirely based upon the filing of the US application. If the company is interested in foreign protection, within the year it must file either an international application through the Patent Cooperation Treaty (“PCT”) or applications in the individual nations in which the product may be manufactured or sold or in which infringement is likely.

After the PCT application is filed, the company has up to 30 months (from the earliest filing date) to decide which nations should be elected for prosecution.

Secure Your Brand

Trademarks can be filed on an intent-to-use basis anywhere in the world, so as soon as a company has decided upon a brand name, and that name has been cleared, file the application. Clearance involves hiring an intellectual property attorney to review the records of the trademark offices of each of the nations in which you intend to manufacture or sell the product or offer your company’s services. If the trademark search reveals that another company already owns a pending application or registration for the proposed brand name, then the company can choose another one before making a significant investment in an advertising campaign and product labeling.

If and when the brand name is cleared, file an application right away. If a third party has filed an application anywhere outside the US for your company’s US brand, unless your company’s brand is famous, it will be very difficult to challenge the issuance of the registration to the third party.

A Trademark May Not Be Not Enough

Once your trademark applications are on file, the company can also investigate recording the trademark with the foreign country’s customs authorities. You do not necessarily have to file individual applications in each foreign nation. A European Community registration is available, covering each of the 27 countries of the European Common Market. Additionally, the US is a member of an international treaty called the Madrid Protocol, which permits you to receive an international registration valid in many nations, including Australia, China, Korea, Japan and Russia. Trademark protection is not automatic, however, and you must designate the countries in which you want protection.

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