Protecting intellectual property (IP) is one of the most significant challenges for small business exporters.
I meet small business leaders regularly, and IP is consistently one of the areas they are most worried about when considering whether to expand into international markets.
Fears that their products and designs will be copied, thus undermining their ability to compete are common.
But protecting IP isn’t as daunting as it sounds. Small businesses can protect themselves by understanding the risks and putting in place the appropriate safeguards.
IP protection at home and abroad
While a new business may protect its IP in Australia as a matter of course, this generally provides no protection beyond Australian borders. Although international protocols mean it may be possible to protect and enforce IP rights with trading partners, the reality is that unless small businesses protect their IP in each market they enter, they leave themselves open to IP theft.
Having IP protection for new inventions, designs or brands, gives small business exporters the opportunity to expand into new markets when ready. The key factor is to understand the IP risks and protections that exist – at home, where goods are manufactured, and in potential export markets for the future.
It’s all about balance
IP protection is often about striking a balance between achieving maximum protections and managing IP costs. The appropriate solution for any small business will need to reflect the broader business strategy at home and abroad.
To get the balance right, small business exporters are recommended to enlist the assistance of an IP professional such as a registered patent or trademarks attorney or experienced IP lawyer. They can help develop and implement an IP strategy that is suitable for your business requirements.
Recognise the risks
1. Having your product copied without permission
It’s important to understand the IP laws and consumer protection laws in the countries you intend to trade in.
According to Gavin Lovie, Former Director of International Policy and Cooperation at IP Australia, if a business is selling in an offshore market without protection, there is no impediment for third parties wanting to reverse engineer and copy its products.
“In some cases this may be an intentional attempt to counterfeit your product. Or they may be doing it because they think your brand name is the descriptive name on the product. They may also package something so that it looks very similar to yours – one that’s not quite close enough to be considered as passing as your products or trademarks, but close enough to damage your reputation.”
2. Unknowingly infringing a third party’s IP
Lovie says: “You might not know that you’re actually infringing on someone else’s rights until you seek to protect your own IP, and find that you can’t get it registered because it conflicts with someone else’s registration. Or you may end up getting a nasty letter from a foreign-based law firm, telling you you’re infringing on their clients’ rights.”
This can be a result of a genuine situation where that IP was already in use in that market. However, it’s not unusual for this to be a result of opportunistic IP squatting, where a third party registers their right to the IP with the hope of selling it for financial gain at a later date.
Checklist: Preparing for export
Follow these steps to protect your IP, and set your business up for export success:
- Is your product or brand eligible to be protected under IP law?
- Is your packaging part of your product’s value? Have you protected its design?
- What are your target markets? Are they covered by international conventions?
- What is the value of your brand, design or product features to your business?
- What is your budget for protecting your IP?
- Is your IP already registered by a third party in your target markets?
- Do you have non-disclosure agreements for offshore manufacturers and distributors?
- Have you consulted an IP professional with connections in the countries you want to export to?
- Have you considered registering trade marks for the local language version of your brand?
For a more information on how you can protect your IP when exporting, download the IP Australia and Efic, Protecting your IP overseas special paper.
Andrew Watson is Executive Director, Export Finance, Efic