When venturing into the unknown waters of foreign markets, it’s vital that you protect the assets and intellectual property that form the foundations of your company’s offering. Discover how below.
It’s almost impossible to overstate the importance of intellectual property (IP) in the US economy. Now more than ever, the creativity and innovation that are the building blocks of IP are critical to America’s competitive success and continuing economic growth.
IP is big business
According to the Global Intellectual Property Center (GIPC), IP-intensive businesses in 2012 accounted for over 55 million jobs in the US, a staggering 46 percent of the entire domestic private sector employment. IP also made up 38 percent of the total US GDP for the same year, totaling nearly $6 trillion in economic output.
But we live and work in a globalized economy and the role of IP in international trade is just as significant. In fact, IP comprises 74 percent of all US exports and contributes $1 trillion to the US trade balance.
And it poses big risks
In this context, it is equally impossible to overstate the importance of protecting intellectual property rights. IP needs protection from a seemingly endless onslaught by unscrupulous companies, organized and individual criminals and even corrupt governments who seek to steal trade secrets, patented products and processes, designs and copyrighted material.
Estimates vary, but IP infringement (read: theft) in international markets costs US businesses as much as $250 billion a year. That’s a quarter of the total contribution to the US trade balance from IP exports.
Financial loss isn’t the only consequence of IP rights infringement. International agreements and the laws of countries where it is possible to register IP impose harsh penalties on violators of patents trademarks and copyrights, from criminal fines to imprisonment, civil injunctions and financial restitution.
Protecting your property
It’s no wonder then that protecting IP rights has become the focus of trade organizations, international treaties and governments around the world for more than a century.
However, the vast number of parties with individual interests and the fact that laws are different in every country make the process of protecting IP difficult, complex and time-consuming. And as daunting as the process is for individual companies seeking to do business in international markets, it’s even more complicated for companies seeking the benefits of joint ventures, vendor sourcing and partnership resources abroad.
This topic was addressed in a previous Powerlinx article, which pointed out the need for duty of loyalty terms in partnership contracts. It also emphasized the need for international and multi-national IP registration, as registration offers virtually the only protection, with recourse to national and international agencies and courts.
Raising your shields
Fortunately, there are a handful of organizations and agencies with which businesses can engage to maximize the scope and breadth of IP registration and the protections that registration can provide.
The first stop in any IP registration journey is the US Department of Commerce and its bureaus, the US Patent and Trademark Office (USPTO) and the International Trade Administration (ITA). They and other US agencies help businesses secure and enforce intellectual property rights at home and abroad. The ITA’s Office of Intellectual Property Rights administers the STOPfakes.govwebsite as a coordinating resource for all the agencies involved.
On the global stage, there is the World Intellectual Property Organization (WIPO), an agency of the United Nations with 188 member states that leads the development of an international IP registration and protection system. It administers several key international treaties that comprise its IP system:
- The Patent Cooperation Treaty (PCT) assists applicants in seeking patent protection internationally. By filing one PCT application, applicants can simultaneously seek protection in 148 countries.
- The Madrid International Trademark System provides for the centralized registration and management of trademarks worldwide. A single application can provide trademark protection in the territories of up to 97 member countries.
- The Hague International Design System for the international registration of industrial designs allows applicants to register up to 100 designs in more than 65 territories with one application.
Additionally, the WIPO Arbitration and Mediation Center provides mechanisms to resolve internet domain name disputes and has processed more than 30,000 cases to date.
Naturally, IP protection laws aren’t the only regulations to consider when building international strategic partnerships, especially in a supply chain. The Powerlinx ebook, Understanding regulatory compliance in your supply partnerships offers a quick and informative reference for the most important regulations.
The complexities of IP registration and the serious consequences of infringement add new dimensions to the due diligence requirements of strategic partnerships. It’s vital that you not only find partners that fit your business model and culture, but trustworthy partners that will help your business stay on the right side of the law and respect your IP rights as well as the IP rights of others.
The Powerlinx platform is the ideal tool for identifying and vetting the best partners for your business. Register for the platform today.