The value of IP does not only lie in its commercial
potential, but also in its use as a tool in defending infringement
Intellectual Property issues are important for exporting
businesses. It is one of the areas where contentious issues can
arise and businesses should be prepared.
One of the key characteristics of Intellectual Property (IP) is
that its protection and enforcement is territorial whereas its
exploitation can be global. With the exception of copyright, you
will need to register a patent, a trade mark or a design where
appropriate to protect your business' intangible assets.
Similarly you should consider any local rights you may infringe in
your export market.
Having a robust understanding of IP is more than about avoiding
the usual major pitfalls such as not registering a trade mark or
disclosing an invention before applying for a patent.
Exporters should be proactive and have clear strategies to
protect their IP and avoid infringing that of others. These two
strategies are complementary and can have unexpected results:
By searching the trade mark register of a country to check that
your trade mark is available, you may identify potential
By conducting a "freedom to operate" analysis to make
sure that commercialisation of your product overseas will not
infringe, you may find out that obtaining a licence from a patentee
you did not know about may be the best way to solve that
technological issue you have been struggling with.
Knowing about the IP of others, both in NZ and overseas, should
be part of your IP policy. It has many advantages:
It will save you time and money if you find out early that it
is pointless to re-invent the wheel;
Being aware of what IP your competitors own may enable you to
anticipate their next move. If your competitor has applied for a
trade mark that is confusingly similar to yours: you may need to
get in fast to oppose its registration. If it has just been granted
a patent for an invention similar to yours; it may be preparing an
attack against you.
With a proactive IP strategy, you will be less likely to run
into trouble, and better prepared to respond if you do.
The value of IP does not only lie in its commercial potential,
but also in its use as a tool in defending infringement
allegations. It is common these days to hear of a "defensive
patent". Businesses often acquire patents (sometimes even
knowing that their validity is doubtful) for the sole purpose of
mitigating the risk of and providing protection from
In some countries, it is still possible to register a
"defensive trade mark". Defensive trade marks can be
registered for well-known trade marks in classes of goods or
services in which the owner does not actually use the mark. They
offer protection if a third party uses that well-known mark for
different products or services.
When it comes to commercialising IP, good advice and well
drafted agreements are key to avoiding disputes. Any commercial
agreement should have specific provisions detailing the way in
which your IP is to be used by your representatives, agents or
distributors. It should also state clearly who will own any IP
created or modified during the relationship.
A well written agreement is designed to anticipate potential
problems and provide for a satisfactory dispute resolution
mechanism. When negotiating clauses on governing law and dispute
resolution, it is key to choose a law and a forum of quality.
Whether a dispute is handled by mediation, arbitration or by the
courts, the most important factor to consider is
New Zealand businesses should choose New Zealand law and New
Zealand jurisdiction when negotiating with their overseas
associates but may need to be ready to accept another governing law
if the counterparty is "worth" it.
This is for three main reasons:
New Zealand law originates from and still is very similar to
English law, which should reassure sceptic overseas
New Zealand is a well regarded, non-corrupt legal system;
New Zealand lawyers are generally better and less expensive
than their overseas counterpart.
Unfortunately, risks will always exist. The best of IP
strategies and written agreements are no substitute for good
business acumen and common sense, and these come with experience.
You should not hesitate to seek help from experienced advisers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
James & Wells Intellectual Property, three time winner
of the New Zealand Intellectual Property Laws Award and first IP
firm in the world to achieve CEMARS® certification.
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