How important is your intellectual property- your company and brand names, creative outputs, inventions and trade secrets? Most company leaders consider these aspects to be the most critical for long-term success.
I have also heard many business leaders shy away from international expansion because of IP theft fears. To be clear, any valuable intellectual property will likely be targeted by IP pirates. That said, you’re no safer staying home that forging on ahead. In fact, you may be less safe. In the meantime, companies who stay home miss a majority of their markets.
For those brave companies venturing into international markets, here are ideas to smartly move forward:
1. Develop an IP Protection Strategy.
Discuss as a leadership team:
- How important is your IP to your company’s success?
- How much potential market is outside your home market?
- Will international IP infringement affect you domestically?
- How much $$ do you have to fight infringement in legal systems overseas?
The strategy will vary by company based on factors like 1)
- The importance of IP protection
- Which countries hold the best market potential for your products and services
- Your budget for proactive & reactive measures.
If you need help to develop your strategy, please consult with someone experienced in international business and IP.
2. Cover the Basics. Check with the World Intellectual Property Organization (WIPO) to see which of your IP can be quickly and easily registered to cover countries where you do business or may do business in the future.
If you have key markets such as China, also register especially your trademarks with their government as well. Like in many countries, China is a “first to file” system, where the first to register a trademark has the rights to it. Even if the registrar does not use the trademark, their rights can supersede yours. The last time I checked, it cost under US$700 to register a Chinese trademark as opposed to thousands of dollars to pay off whoever beat your company to the Chinese registry.
3. Legal is Good, but Partners may be Better. If you are from a Western country, then the normal course to fight IP theft is through the legal courts. That is a less effective strategy in countries where you are the foreigner and the bias tilts towards the native IP thief. Another approach is to develop strong partner relationships in country. If a partner is also harmed by the IP theft, then they will have even more reason to use resources and influences to resolve the situation.
4. Use IP Theft to Spurn Innovation. Our mothers used to tell us that imitation is the best form of flattery. While no company appreciates their designs or ideas copied, there may be an unexpected benefit from copycats. Instead of spending resources to pursue the thieves, you can use those resources to spur innovation to stay one step ahead of those who would copy you. It also helps to keep your products at the forefront of your industry.
5. Balance Profits and the Real Risks. There are companies that will not leave their home market for fear of IP piracy. This I can tell you, I have yet to meet at least a technology company with more than 50% of their total opportunity coming from their home market alone. In other words, 50-90% of most companies’ markets are overseas.
By having an IP protection strategy that is proportionate to both the risks and rewards of international markets, your company can be smart about both.
For more information about IP protection strategies and other international business needs, please contact The International Entrepreneur.