Owen Culliney offers advice on how to successfully commercialise your products and services in your target overseas markets.
You are an innovative technology business clocking up an impressive track record of sales in New Zealand. You may be enjoying adhoc sales scattered across several overseas markets. But how do you go about successfully commercialising your products and services in your target overseas markets?
Prepare and plan well
This means researching and fully understanding the export market potential for your technology in terms of market demand, potential and trends, market size, key market segments, competition, pricing, relevant import regulations, and the most appropriate distribution channels market by market.
Though often neglected by Kiwi exporters, intellectual property1 considerations should also be a part of your export marketing plan because they will ensure your distinctive brand is strong and well protected in your target markets.
Your Brand - Freedom to operate
With some elementary homework and the assistance of an intellectual property specialist, Kiwi exporters can ensure they have freedom to operate2 in their target market. This means that the use of your brand name and logo (trade marks) will not infringe someone else's rights in your target market.
The earlier you establish the freedom to operate the better, as time and money committed to the export plan can be wasted if a problem is not discovered early. Burger King, for example, could not use their valuable international trade mark in Australia. They discovered, too late, that their trade mark was already taken and had to rebrand as Hungry Jacks, a costly and time consuming exercise.
It is also important to note that trade marks are territorial which means your trade marks need to be registered in each of your target export markets. The potential problems intellectual property specialists look for in your target markets are:
- Competing interests
- Same or similar trade marks
- The inability to register a trade mark
- The potential for infringement3 of existing intellectual property rights owned by another party
Trade Mark registration
Once you have established that you are free to operate in a market, it is vital that you take steps to register your trade marks, particularly if they are to be licensed to a local distributor or agent. Your intellectual property specialist will be invaluable in this process and will help register the trade mark, in the right classes, and ensure protection is effective under foreign law and practices which differ market by market.
The paper work
Kiwis love to operate on the basis of a handshake or loosely recorded agreement, but this is a very risky practice that can result in nil sales, lack lustre performance or soured partner relationships. Ensure you are well protected with a written agreement that includes a timeframe, territorial coverage, performance clauses and intellectual property ownership rights.
A properly drafted licence4 or distribution agreement is a fundamental ingredient in any successful export relationship. Licence or distribution agreements that are carefully prepared by your Intellectual Property specialist should deal with a number of issues including preventing your offshore agent or distributor from:
- Competing with the product
- Registering trade marks and/or domain names in their own name
The best way to ensure international commercial success is to research and develop an export marketing plan for each target market that includes an intellectual property strategy, carefully drafted documentation and expert legal input.
1Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.
2Typically used in respect of a search performed on granted patents or pending patent applications to determine if a product or process infringes any of the claims. If the search determines that there are no relevant granted patents then someone may be said to have freedom to operate (ie to operate a business making and selling the product or using the process). Pending patent applications may affect freedom to operate in the future if granted. Note that the search may be expanded to include registered designs.
3Refers to the commission of a prohibited act with respect to a patented invention without permission from the patentee. In New Zealand, the Deed of Letters Patent confers on the patentee a monopoly to make, use, vend or exercise the invention in New Zealand. Performing any of these acts without the permission of the patentee will amount to an infringement if the patent is current and in force. Permission will typically be granted in the form of a license. Remedies for infringement can include an injunction to restrain further infringement, payment of damages suffered by the patentee as a consequence of the infringement or payment by the infringer of any profit he/she/it made by virtue of the infringement, and legal costs.
4A legal document granting another party permission to use an invention that is the subject of a granted patent. The details of a licence depend on the arrangement agreed by the parties, but normally a licence fee and/or royalties will be payable.
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.