Wanting to Sell or Expand Overseas?
Don't Leave Your Good Name Behind!
The Administration is trying to promote domestic economic activity through increased exports with programs such as the National Export Initiative, and many US-based businesses are trying to increase global demand for their products and services. However, as they expand into new markets, the risk of losing their brand increases. Risk assessment and management of intellectual property should be at the core of a company's business strategy.
A company spends a great deal of time and money building a brand. Customers use it to identify and distinguish products/services, and brands play a significant role in driving buying behavior. Companies experience damage to their brand when their product designs are pirated and reproduced with poor quality. Eventually, these poorly manufactured products end up being imported into the US and offered at discounted prices, cutting into domestic market share. A solid trademark position is many times more valuable, from a revenue standpoint, than other forms of intellectual property – even patents, in certain instances; and the cost to secure trademarks is relatively low, compared to the advantage they award.
Before the internet, trademarks were more isolated from country to country; a brand in Japan might be unknown in the US and vice versa. Brands are now broadcast worldwide, immediately. A company's products and good name are targets for anyone, anywhere; and trademarks need to be protected on a country-by-country basis.
Many US-based companies are slow to learn that intellectual property laws overseas are very different. A US oilfield equipment manufacturer may expand by developing distributor relations with companies in various countries. They spend a lot of money and time laying the groundwork for a successful expansion only to find out later that their local distributor owns the trademark rights to their most profitable products. For instance, some countries have a "first-to-file rule" for trademarks. The first entity to file a trademark application has priority to that mark, even over a prior user.
Good planning for brand protection from overseas threats starts with shoring up US registrations. Application filing dates are critical when it comes to disputes. Many companies have deferred trademark registration for one reason or another. However, getting those rights secured here also helps establish rights in other countries. For instance, US registration enables action to stop importation of infringing goods. Some countries have laws to protect established brands that are registered in other major countries, such as the US.
It is also important to know if use of a particular brand name is already blocked in a target country before spending thousands of dollars securing it. Undoing a prior trademark or domain registration, even if possible, could require going to the Supreme Court of a foreign country – which will make cost management very unpredictable. Worse, failure to ensure that you do not infringe in a foreign country can be very costly. Through strategic planning, a business can save unexpected litigation and rebranding costs as well as maintain a budget for proactively dealing with any issues that may come up.