Many of Australia s trading partners are members of the Madrid Protocol, including China, Korea, Japan, Singapore, the United States of America, and countries in the European Union. As a general rule of thumb, if you wish to protect your brands through trade mark registration in three or more of these territories, it will best be done through an International Registration filed using the Madrid Protocol.

What is the Madrid Protocol?

The Madrid Protocol is a treaty providing for a centralized system of trade mark registration. It allows for a trade mark to be protected in numerous countries with just one application and resulting registration. This can provide for cheaper and simpler management of your trade mark portfolio. For example, the application will attract just one set of fees, and changes to ownership of the registration or attendance on its renewal can be completed with a single request instead of multiple forms to different Trade Marks Offices. This can result in savings at the time of launch, and also in reducing subsequent maintenance costs.

Requirements for filing

Although administered through the World Intellectual Property Organization (WIPO), the initial paperwork for a filing can be lodged locally with the Australian Trade Marks Office and official fees paid in Australian dollars. The application for International Registration needs to be based on an Australian trade mark application or registration. This is referred to as the basic trade mark. It can be a long established Australian registration, an application filed immediately prior to the filing of the International Registration, or anything in between. The International Registration must have the same owner, be for the same mark and claim

the same or only some of the goods and/or services covered by the basic trade mark.

It is advisable to have the application for an International Registration prepared and filed by a professional experienced in such matters, such as a trade mark attorney, as certain amendments are not permitted once the application has been filed and there are deadlines to monitor and meet.

Registration process

Once an application for an International Registration has been lodged with the Australian Trade Marks Office, it is checked for formalities and, if all is in order the application is forwarded to WIPO where it undergoes further formalities and classification checks. Then, once all is in order, a Certificate for the International Registration is issued. This is a misnomer, as at this stage no registration rights have been secured. Rights are only granted once protection for the International Registration has been extended to designated countries. This usually occurs after national examination processes.

A number of airfare studies conducted by FCm Travel Solutions reveal there are a number of ways exporters can reduce air travel costs. One of these studies analysed ticket prices that had been bought using ‘best fare of day’ policy. FCm conducted the study to show companies what the cost and savings impacts were when a best fare of day strategy was used to purchase tickets for domestic travel. When companies use a best fare of day strategy to buy airfares, they are booking the cheapest available fare across all carriers servicing that route. A best fare of day strategy can be used for domestic and international travel.

The study was conducted between 1 January and 31 March 2011 and analysed ticket prices across airlines for 160,078 one-way trips using fare data from FCm’s portfolio of Australian clients. As part of the study the average price of all ticket types sold for a single-leg journey were compared to the average price of tickets bought using best fare of day. A selection of 20 domestic routes showed that by using best fare of day, companies could save on average between $11 to $154 per one-way trip. The top five routes for savings included:

• $154 on the Melbourne to Perth route
• $144 on the Perth to Sydney route
• $136 on the Brisbane to Perth route
• $89 on the Brisbane to Melbourne route
• $83 on the Adelaide to Perth route.

If best fare of the day or cheapest available fare is used by every traveller across your company for every export trip, the strategy has the potential to chip thousands of dollars off the cost of air travel.

Do you need flexibility?

But, while best fare of day is an excellent method of reducing air travel costs, travellers should be wary that conditions attached to the ticket may not suit your style of travel. Generally these are fares with no flexibility for changes to flight times, names or dates. These ticket types are most suitable for travellers that know their travel plans are not going to change.

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I tried again. ‘Successful selling means understanding the needs of our customers and presenting our products and services as the solution to a problem that the customer has identified and wishes to resolve.’ ‘Not bad’, he said, ‘but you can do better than that.’ I took another slightly longer sip of my beer. ‘Successful export sales professionals recognise that they need to adapt to the individual and cultural preferences of their customer.’ ‘That’s good’, he said and I think he meant it, ‘but the real secret of successful selling is to remember that it’s all about people.’ ‘It’s about you’, he said ‘and me’; stabbing his finger first at my chest and then at his own.

This experience has remained with me for many years as a visceral reminder of what Raymond Cohen has described as the difference between a low context approach to sales and negotiation versus a high context approach. It was brought back into focus once again a few years ago on a business trip to Singapore. Having decided to provide learning and organisational development services to international companies operating in the Asia Pacific region, I had gone to meet the local Austrade business development manager. As I was now a little older and wiser, I had learnt it is always best to be the person who is asking the questions. ‘So, what is the secret to doing business successfully here in Singapore?’ I asked. ‘How many people do you know here?’ came the response. ‘This is my first visit.’ Here my host paused and looked at me carefully. ‘Well,’ she said ‘I’d say you’ll need patience and deep pockets.’

Low context cultures

In many ways, I am a typical low context negotiator. I grew up in the UK, which is considered to be a low context culture. I have spent much of my professional career working in British, American and Australian low context businesses – except for one role in a high context Japanese company which was an eye-opening experience. I have lived, worked, married and raised children for well over a decade in Germany. Much of my professional development as a sales professional has been anchored in what might be described as classic low context theory and practice; Strategic Selling frameworks from Miller Heiman, SPIN Selling methodologies from Neil Rackham and Huthwaite and Consultative Selling by Mack Hanan. My training and experience has taught me that doing business successfully is all about finding people that have a need and offering them a product or service that meets that need.

My low context approach to negotiation can best be described as a problem-solving approach; my goal as negotiator is to collaborate with my business partner to ensure that both our needs can be met. Others might describe me as pragmatic, flexible and results-oriented with a ‘can do’ mentality. During a negotiation process my communication style is fairly straightforward; I will ask questions and present proposals with goal of reaching an agreement that can form the basis of a future business relationship. I am likely to ‘get to the point’ and communicate my needs, interests and expectations for that relationship without ‘beating around the bush’.

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The Australian Institute of Export outlines some practical questions to ask of your export proposition.

Practical Considerations

Product: Only promise what you can deliver. Does the product include technical literature/advertising for new markets? Is the product cleared for entry in buyers market? Are all costs covered in your pricing?

Logistics: Your packaging needs to be sufficient to protect your product during the trip. Are the goods insured until they reach a buyer’s warehouse? Are there temperature/moisture concerns during transport? Have you explored the best options: air or sea/trans-shipment or direct?

Export Pricing: Make sure you are using the correct Incoterms. Can you meet requests for different delivery options? Is the payment method safe? Cost plus or market based pricing?

Payment risk: Ensure you have an enforceable contract in the buyers’ jurisdiction. Do you have different payment methods for different buyers? Is there a plan if they can’t or don’t pay? Are there any currency movement issues?

Country risk: Assess the possible import restrictions, legislation, quotas and bans that might apply to your export. Have you evaluated the political and economic situation of the buyer’s country? Can you safeguard currency transfer risk?

Funding requirements: Do a cashflow forecast for exports. Are working capital lines sufficient for increased export orders? Are there options to fund against receivables/stock?

Documentation: Your export documentation has to meet Letter of Credit terms. Do you have entry documentation issues in certain markets? Are there delays in getting documents for shipments?

Marketing: Think about an appropriate sales model in each market. Are there warranty/returns/ product liability issues to consider? Is there a written agreement in place for your agents or distributors?

Trading partners

The NSW Department of Industry, Trade, Regional Infrastructure and Services offers some practical tips for assessing a potential business partner.

Don’t enter into a deal with a business or partner until you have checked them out, no matter how enticing the proposition may sound. Google them—if you see a string of complaints you probably need to ask a few more questions.

You wouldn’t hire an employee without checking their references, so make sure you do the same for a potential business partner. Ask to speak to two of their customers and/or two of their suppliers—it’s the same as asking for referees at a job interview.

Approach the relevant bilateral chamber of commerce, state or Austrade office in market and ask if they know of the business. You can also run a check with the local equivalent of the Consumer Affairs Bureau or Office of Fair Trading.

Ask for their financials for the past three years—if they are happy to share its a good sign! Has the business had any recent cases of litigation? Usually, cases that have been prosecuted in the public court system will be listed on the web.

If they check out on all of the above, then it is time to check with credit agencies or commercial bureaus like Dun & Bradstreet or Experian to see whether you should extend credit. These agencies have different levels of reports ranging from raw data to very comprehensive and costly reports.

You can do all of this before you get legal teams involved, for a small cost. If you think about the problems you could avoid, it’s well worth the investment.

Currency

Travelex offer tips on how to mitigate currency risk.

If you transact in AUD, you remove currency risk and put this back on your consumer. This is a hard term to negotiate if you are a small exporter, but it’s well worth asking about when you establish the terms of trade. If you receive foreign funds, you have the opportunity to benefit from movements in the foreign and local currency, and can hedge your risk with foreign exchange derivatives.

Market risk: Know your profit margin and the base cost foreign exchange rate you will need to achieve it. Hedge accordingly.

Know your customers: There are increasing cases of fraud especially in certain industries and high-risk countries. Be aware of these industries and markets and take precautions.

Payment method: Understand how you will be paid as some countries still have a high use of cheques. If you are receiving cheques, they can be costly to exchange and have long clearing cycles. It is different to receiving a cheque in Australia. Plan accordingly to ensure your cash flows are not impacted negatively.

Visibility in an important tool for importers—it means understanding the many manufacturing issues that could impact their project and being able to respond to them. In Chinese factories visibility can be a difficult, given that communications are complicated by language and cultural barriers. Importers rely on email, Skype, phone calls and the occasional quick trip to China to visit the factory. This means much of the onus is on the factory to update the importer on developments—both good and bad.

Cultural factors

While we shouldn’t generalise about why factories get it wrong—as there are plenty of factories that manufacture to an excellent standard—there are those that present the same common challenges. One such challenge is the challenge of communication, which can be seen at many different levels.

Key role

Your import success hinges on your sales manager’s communication skills. When working with a Chinese manufacturer your first point of contact is the sales and marketing department. This department plays a significant role, being required to not only source new customers but also service them, passing on all your product specifications to the production department (who are generally Chinese speaking only).

Employees in this sales role must firstly have an English (or other) language competency that allows them to communicate with their export market customers:—i.e. you the importer. As a general rule this is a highly sought after role with good advancement prospects for any Chinese employee. And for this reason, you will notice that good sales managers are often not long in one position, tending to job shop due to the being in high demand.

Communication at the beginning of a manufacturing project is critical. The sales manager must understand and then pass on your product information to the relevant departments in the factory. If you are fortunate to work with a sales manager who has great language skills, understands the manufacturing process and is efficient, you are off to a good start. If they are lazy, overburdened, have limited English or only a basic understanding of the manufacturing process, then this could be a warning sign. A communication blockage at the beginning of a project could result in the wrong product being produced, unclear lead times, unapproved materials changes and unforeseen costs.

Nepotism in this position is also a recurring feature. Given the prestige attached to being a sales manager in China, it is often a position filled by family members, partners or friends. In a shoe factory we know, this role is held by the owner’s nephew. The nephew has no English language or shoe making experience, nor is there an expectation for him to gain these skills. Simply turning up is considered sufficient. Even worse there is no recourse for poor performance, laziness or when he makes blatant mistakes.

Having this barrier limits our client’s ability to pass on product information efficiently. It also means monitoring the progress of sample making and full scale production is almost impossible. This can be a costly process, as the client in this situation is forced to wait until the products are 100 percent complete before they can assess whether or not the products have been made according to the specifications.

How do you address the sales manager challenge? Find out who your sales manager is, what their experience is and whether they are happy working in the company they are with. Monitor their performance and always double check their work. Communicate with them daily to ensure they do not forget you. On the flip side, do not burden them with longwinded wordy emails. Set out the facts in plain English and ensure you product requirements are prepared in a detailed specification sheet—not over the course of 10 emails.

Make sure you also have realistic expectations and don’t leave change to the last minute, then expect immediate results. Expletives, CAPITAL LETTERS and ‘!!!!!’ are all clearly understood in China, so think twice before firing off an angry email, you may be shooting your only messenger.