With businesses increasingly entering and operating in new international markets, proper and effective IP protection in the global marketplace has become a growing concern for many Canadian SMEs. IP can often be a company’s most valuable asset – it can strengthen your position in export markets and increase enterprise value. It is therefore very important to take the necessary steps to properly protect your IP before entering a foreign market. Don’t wait until you are faced with infringement or a legal dispute before thinking about IP protection for your business. Be proactive and plan ahead! Failure to properly research and know about IP rules and regulations in the market in which you are conducting business could expose you to unnecessary costs and higher risks that could ultimately have a detrimental impact on your bottom line.
One of the most important things for businesses to know about IP in international markets, is that IP protection is not universal. Thinking that a successful application for IP protection in Canada automatically grants protection in any other country is perhaps the most common mistake made by Canadian SMEs. IP protection only expands as far as the national border in which it is registered. So, if you register your IP in Canada, you are only protected in Canada, and are not afforded extended protection in any other international market. IP rights are territorial and national IP offices can only grant protection for their respective national jurisdiction. Therefore, before entering a new international market, it is crucial for Canadian businesses to seek and ensure proper IP protection in all of the international markets in which your business will operate to ensure the best commercial results from ownership of your business IP.
So how do you protect you IP in multiple international markets? Typically, there are two main options: (1) a series of individual national applications; and (2) international applications.
1- National Applications – The national application route requires the applicant to seek IP protection in each individual country in which they plan to conduct business according to each country’s domestic laws and regulations (i.e. by applying directly to the respective national Industrial/Intellectual Property Offices of every foreign market you wish to enter). This route is often quite lengthy and can become extremely costly. It requires payment of application fees for each individual country in which you are seeking IP protection, translation of application documents into the requisite language, and often an obligation to hire an IP agent to submit applications in a particular country.
2- International Applications– There are international organizations, such as the World Intellectual Property Organization (WIPO – organization that administers an international IP filing system) and international agreements that allow for simultaneous IP protection in multiple foreign markets. The international application route streamlines the process of applying for IP protection in multiple countries by allowing an applicant to file a single application, in a one language, accompanied by the payment of a single application fee.
- Patent Protection – under the Patent Cooperation Treaty (PCT) system, an applicant need only file one international patent application which then grants them protection in each member country (over 125 members).
- Trademark Protection – pursuant to the Madrid Protocol, an international registration under the Madrid system provides protection to the registrant in each member country.
- Industrial Design Protection – under the Hague Convention, the owner of an industrial design can obtain multiple country protection by filing a single application with the International bureau of WIPO, in one language, for a single fee.
As part of your due diligence, and in order to reduce costs and the amount of paperwork required for multiple applications, find out if the foreign markets you will be conducting business in are part of an international convention or agreement with Canada that would allow for a simplified or streamlined application process to avoid having to register individually in every country.
Not surprisingly, there can be many challenges involved in effectively protecting your IP abroad. To avoid some of the common IP pitfalls and ensure adequate international protection for your IP, you should consider the following steps:
- Due Diligence – As a first step, make sure to properly educate yourself about the basic IP rules and regulations in each of your target international markets (don’t assume that laws for IP protection are the same in every market you enter) and look to any existing international agreements or organizations that can provide simultaneous IP protection in multiple countries (i.e. WIPO). As mentioned earlier, IP protection in one country does not have universal application –make sure you are protected in every market you operate in.
- IP Audit – IP can often be a business’ most valuable asset. As such, it is important for you to have a clear understanding of the exact value of your existing IP assets. Conducting a proper IP audit will allow you to grasp these values. IP is often undervalued and the opportunities it creates for future profit, such as generation of income through licensing or sale, or increasing enterprise value in a merger or acquisition, is often underestimated. Conduct an IP audit and know the value of your IP assets.
- IP Strategy – An important step in successfully protecting your IP overseas is to develop and implement a sound international IP protection strategy, and incorporate it into your existing business plan. You should have corporate policies and procedures in place that deal specifically with your business’ IP. Your IP strategy should be specifically tailored to your business goals, resources and target markets.
- IP Database Search or “Freedom to Operate” – As part of your due diligence, make sure you adequately search the IP databases in each of your target markets to avoid any potential conflict or IP infringement. Make sure your IP does not infringe the existing rights of others in the market.
- Register your IP – Upon completion of your due diligence and proper research, take the necessary steps to formally register your IP in the markets in which your business will operate, either individually, or as part of an international streamlined process. It is important to file applications and begin the registration procedures as early on in the process as possible.
- Monitor the Market – As part of your corporate IP strategy, make sure to include and implement policies and procedures on IP monitoring and IP enforcement. Ensure that you are frequently and consistently monitoring the markets in which you are conducting business to promote early detection of any IP infringement.
Overall, IP protection for your business on an international scale can often seem to be a daunting task. Taking the time to conduct proper due diligence and to consult with experts, when necessary, can help you avoid common IP pitfalls and costly mistakes and oversights. Take advantage of the great online resources such as WIPO and make sure to have a strategy in place that deal specifically with your business IP. As mentioned earlier, IP can truly become a company’s most valuable asset, so give it the time and attention it deserves.
