Your clients can expand their businesses overseas to garner riches but face unknown pitfalls. American goods are still prized overseas. The U.S. average exports of goods and services increased by $2.2 billion to $197.3 billion in the month of November 2017 alone. Comparing trade changes for the months of November 2016 and November 2017, the total monthly trade increased 5.6 percent. In addition to shipping/customs rules and financial transactions, there are important considerations for your client’s intellectual property. Treaties have long set the rules for international protection of intellectual property. The Paris Convention for the Protection of Industrial Property was one of the first in 1883. It is in effect and still useful in some circumstances. More recent are the TRIPPS agreement for copyrights and patents and the Protocol Relating to the Madrid Agreement for easier, less expensive trademark coverage in 55 countries. A widely utilized process for international patenting is the Patent Cooperation Treaty in effect in over 150 countries.
Get a Head Start
The earlier you know about your client’s plan to expand overseas, the better. For patents we preferably start planning years earlier. If there is any desire to eventually go overseas, it is best to file the international Patent Cooperation Treaty (PCT) application. While it costs about $1000 more than a U.S.-only application, it buys you the right to delay U.S. and foreign filings up to 30 months after the first U.S. filing (longer in some countries, extensions in others). That way your clients delay paying translation and local government and professional fees in most countries. Then filings are required in individual countries, for which we use a service that negotiates costs in most of the commercially relevant countries. If the PCT process is not done, we can provide other routes. I helped a new client who was too late for the PCT process. Using the Paris Convention, because the U.S. application was still secret, and no sale had been made, I took his invention into foreign countries. A creative inventor, he dubbed me General Patton for that successful foreign “invasion.”
Another way around the lack of PCT filing is to introduce an improved version of the product. With that we can start new protective patents. Then the product enters new markets with a “patent pending” label. International marketing experts can help identify variations that are desirable or even necessary in particular markets. With their help, your clients will be more successful, more quickly. Many have spent a decade and more at large multinational companies building a network of contacts and learning the vagaries of many different ways of doing business. They can review the business and help plan all steps that clients may not have considered.
When patent protection is not available overseas, we need to consider alternatives or else the locals may decide they can just make your client’s product cheaper! Alternatives and/or additions are trademark and copyright protection.
Trademark protection has been important for many U.S. brands and can be obtained readily overseas. Costs (government and professional fees) vary widely and do not correlate with the size of the market. Under the various treaties, your clients can use the Madrid system for trademarks or file directly in individual countries. We are accustomed to discussing the pros and cons of each. Occasionally, manufacturers have come to me after they have secured a distributor and want the distributor agreement reviewed. That may be too late to prevent the distributor filing on and owning your trademark(s), which is legal in many countries. That puts your client in a bad negotiating position, as the owner of the trademark can keep your client out of the country, delay switching to a new, better distributor, or require him to buy back his own trademark! If neither registers the U.S. trademark locally, the registration symbol (®) cannot be used in that country – although the symbol TM can be used.
Copyright protection is relatively inexpensive and available to a wide variety of products and performances, artful creations. However, technical books and software are also copyrightable. Thanks to the TRIPPS agreement, securing a U.S. copyright certificate has automatic effect in all other WTO countries that currently number 164. Your clients can place the standard notice on products and/or packaging:
Copyright 2018, Client Name ALL RIGHTS RESERVED.
Although the rights reservation phrase is no longer required, it is a warning against prevalent copying.
Finding great translators is also important. Many situations arise where they can help. For example, when we take a new client into China, local attorneys may offer a translation of the U.S. name, but translators can help your clients think through its cultural ramifications.
Don’t let clients “wing it” overseas when there are experts who can ease the process and make them more successful! Barb Luther