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Barr Ellison Solicitors – commercial property
19 June, 2016 - 22:09

Protecting your IP and brands in global markets

It’s a big world out there. In how much of it do you need IP protection? One size does not fit all, write Andy Bentham and Laurie Smith of the Cambridge and London offices of Patent and Trade Mark attorney J A Kemp.

For a small UK business with limited funds and no plans to trade abroad, a UK patent alone might prevent direct copying in the home market and support patent box tax relief.

For a blockbuster pharmaceutical, the eye-watering cost of protection in 50-100 countries might be justified. Between these extremes are the harder decisions: value versus cost, foreseeing not only what is needed now but also by a more developed business years hence and so on. Seldom an easy call.

Large organisations with a throughput of filings have tiered systems where a case goes into a pre-defined set of countries based on experience and knowledge of the markets. 

Tougher for a tech transfer office with many early-stage projects to juggle or a startup with one patent family hoping to create a new market via new technology fundamental to the company’s existence! 

Even so, the basic questions are the same: what attracts you to a country – a market to protect, a competitor to block, a licensing or partnering opportunity; and how big is the upside of protection there or the downside of passing on it? 

Prioritising countries and working down your list until a cost cap is reached is simple but effective, and in a given sector choices are normally similar. In biotech, for example, the USA and Europe are invariably top, China has now edged into third ahead of Japan in our experience, then Canada, Australia, Korea, Brazil, Russia and India round out a top 10.

Experience suggests that even just a position in one or both of Europe and the US can be enough; breadth of coverage may influence more the price that is paid than whether anything happens at all.

Patents can be slow so do look ahead at what you can afford and when. Precise forecasting is impossible but educated guesses can be taken. Equally, do prune your portfolio if necessary: this is managing resources in light of developments, not a sign of bad choices before. Lacking a patent does not stop you trading, it just means that you compete without a monopoly position.

If you hold patents in major markets, competitors may consider the minor ones alone not worth the effort, so a smaller footprint can in practice be broader than it looks.

What of disputes? Patent litigation is expensive and risky, especially abroad. It may not always be practical or cost-effective to defend or enforce foreign rights but high-stakes confrontation is not the only way.
 
Patents have a deterrent effect. If there is an infringement issue, this is by definition because there is enough value for someone to emulate you, so this can be an opportunity for you to cooperate with a local player. And if you do have to fight, in major markets the deck will not be stacked against you as much as you may fear: foreign litigants can and do win, including in China!

Then there’s protecting your brand itself. Knowing your markets is key to prioritising your trade mark protection. Besides your existing markets, do you anticipate expansion, or are you manufacturing overseas? And today’s online marketplace can readily turn a national business into an international one.

It pays to do due diligence before moving into new markets. Patent freedom to operate and trade mark clearance searches will highlight potential obstacles so you can try to overcome them before it’s too late.

Better to know what you’re up against and make plans from the start than be faced months or years later with an infringement action and the prospect of having to withdraw or rebrand.

Consider also whether your chosen brand name might have an untoward meaning in foreign languages!

Pharmaceutical companies face additional regulation in branding. Obtaining marketing authorisation from the relevant authorities takes time. Having a shortlist of preferred product names is the best starting point, but don’t be surprised if none of them is available to use. Have a B list as well.

Timing is important. File too early and your registration may be revoked because you haven’t started trading in that country yet – trade mark registrations work on a ‘use it or lose it’ basis. File too late and you may find that a foreign ‘entrepreneur’ has taken it upon himself to register your mark. Getting it back by challenging or buying the foreign registration may not be easy or cheap.

Trade mark disputes are more common than patent ones, but are often settled. Often parties are able to reach a coexistence agreement and avoid the need for lengthy litigation.

Balancing cost against value in a global market is rarely straightforward, but doing your research and planning ahead pays dividends.

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