Five steps to protecting your IP when exporting
Andrew Watson, Executive Director, Export Finance, Efic
Working with small and medium business (SME) exporters on a daily basis, we get a lot of feedback on some of the key challenges they face when entering new overseas markets. From understanding cultural differences to what currency to trade in, the challenges of exporting can seem daunting, even to an established business.
One issue that continually comes up in our conversations with SME exporters is Intellectual Property (IP). Protecting your IP in the domestic market can seem confusing, open that up to multiple overseas markets and the task can appear overwhelming.
While one approach might be easy to file IP registrations in every market, it’s an approach that is neither practical nor cost-effective for most SME exporters.
Coming up with an IP strategy is an excellent way to maximise your IP protection while minimising costs.
We’ve teamed up with IP Australia to develop the Protecting your IP overseas specialist paper. Here are five steps we’ve addressed to help you develop a robust IP strategy for your export business that will help put you on the right path for export success:
Consider your export strategy
Be as clear as possible about which markets offer the best potential for your product– your IP strategy will be driven by your export strategy.
The markets you target may depend on macroeconomic factors, like population size, demographics or disposable income, or it may come down to the markets with the best cultural fit for your product.
For Scott Boocock, inventor of Hegs Pegs, it was a combination of factors that helped him decide which countries he should export his innovative ‘peg with a hook’ to.
“Our strategy for export was to choose countries with over 20 million people, and which had a level of GDP where people would go to the supermarket and actually spend money to buy Hegs Pegs.”
Being clear about which markets you want to target will make it easier when you start looking into the IP arrangements that apply to each jurisdiction.
Another option is to sell the rights to your IP to a third party, allowing them to manufacture and sell your product in particular markets, rather than exporting yourself.
Do your research
When exporting to a new country, along with focusing on protecting your own IP, you’ll also need to ensure that you’re not breaching another company’s IP in the process.
While your brand and product range may be unique in Australia, doing some research can help to prevent your company from expensive legal challenges from potential overseas competitors.
Engaging an IP attorney to complete a thorough search on your behalf is a great idea, however doing some research yourself at first instance when putting together your export strategy will also help to ensure that there are no nasty surprises.
You should also confirm that your brand and/or product name, and any images that you use, are not considered unlucky or offensive in other languages and cultures.
Choose your solutions
You may be surprised to learn that your product may have more than one patentable element.
Given that there are costs involved, this means that you may need to decide which element (or elements) of your product to cover with IP protection.
The answer isn’t always straightforward, something that Scott Boocock from Hegs discovered.
When he first came up with the design for the Hegs peg, Scott protected the hook feature with a patent, as this was an inventive element. But he soon realised that his IP extended much further than that.
“When we did a novelty check on the Heg peg,” says Boocock, “we discovered that it had six patentable elements. We’ve got a patent on the hook, but also on the design, which means people can’t make a peg with bigger or smaller hooks – the whole system is protected.”
A good approach is to prioritise the IP elements of your product, and think about how you might like to use each one in the future. This will help you to decide on the most valuable element(s), which will make it easier to choose the correct IP solution to protect it.
Understand the costs
While every market is different, protecting all of your IP across multiple markets could prove to be an expensive exercise, especially if more than one element needs protection.
That’s why you may need to balance the costs involved with the potential costs to your business, should someone copy and sell your product.
Monique File, co-owner of b.box baby goods, says that deciding where to protect your IP is essentially a commercial decision.
“For a new business starting out with limited funds,” she says, “it becomes a question of ‘what do you invest in - protecting your IP or developing your products?’”
While b.box invests a lot in IP protection, commercially it didn’t make sense for it to register trade marks in every single market around the world.
Hegs Pegs founder, Boocock, agrees that the costs of the right IP protection are well worth it.
“The money is not just lost – it’s an actual asset on the balance sheet that you can sell,” he said.
“Every time I go back to the valuation of the company, it’s all based around that patent becoming stronger and stronger, and more valuable as the business grows.”
Enlist expert advice
No matter how much research you do, finding the right IP strategy for your business can be a complex process.
Enlisting the help of professionals who specialise in IP protection means you might not only find solutions that you haven’t yet considered, you’ll also likely get the benefit of their expertise and experience.
Finding an IP specialist (such as a registered patent or trademark attorney or lawyer_ that understands your business, and the markets to which you’re exporting, can help ensure that their recommended IP strategy offers the protection that is most appropriate for your business.
For more information, download our free Protecting your IP overseas special paper to help you learn more about protecting your intellectual property when exporting.
The information in this article is published for general information only and does not comprise advice or a recommendation of any kind. A person or entity should seek their own independent legal and financial advice. While Efic endeavours to ensure this information is accurate and current at the time of publication, Efic makes no representation or warranty as to its reliability, accuracy or completeness. To the maximum extent permitted by law, Efic will not be liable to you or any other person for any loss or damage suffered or incurred by any person arising from any act, or failure to act, on the basis of any information or opinions contained in this article.
The specialist paper referred to in this article was produced in collaboration with IP Australia. Certain information in the specialist paper has been sourced from IP Australia. Please refer to their website (ipaustralia.gov.au) for up-to-date information.