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Helping SMEs Protect Intellectual Property in International Trade

By Megan Doyle

Intellectual property – copyrights, trademarks, trade secrets, and other intangible assets – may be key to countless products and services traded internationally, but the vast majority of small and midsize businesses (SMEs) involved in international trade aren’t even aware that they need to file for IP protection abroad, according to the U.S. International Trade Administration’s StopFakes.gov website.1

Meanwhile, Deloitte’s report Protecting Intellectual Property Rights notes that with the rise of digital technology, proliferation of e-commerce, and ease of internet anonymity, IP rights have become more difficult to enforce.2 Further, many SMEs lack the international operations or personnel needed to detect IP theft or misuse in overseas jurisdictions.3

 

In response, the International Chamber of Commerce (ICC) and U.S. Government both recommend best practices and guidelines to help small businesses protect and manage their IP when entering foreign markets.

 

Intellectual Property: Vital to International Trade but Vulnerable to Misuse

 

IP rights enable a business to capitalize on products and services that are often intangible, like a trademarked brand logo or copyrighted video. When protected, IP in its many forms can ensure businesses reap the rewards of their innovative creations, enabling business growth and development.4,5 Additionally, the ICC notes that IP has the potential to stimulate international trade, encourage foreign direct investment, and broaden the international distribution of goods.6

 

The internet has made it possible for any business to be a global business, but it also complicates IP laws since IP protection is territorial. For example. U.S. patents, trademarks, or copyrights may not be protected internationally, and IP must be registered in each country where protection is desired.7 What’s more, foreign manufacturers can use the internet to easily copy business plans, packaging, or products. StopFakes.gov notes that a fraudster could profit from a copyrighted image in their own country if the image hasn’t been registered by its owner in that country.8

 

The ICC’s IP Protection Guidelines for International Trade

 

The ICC has developed a set of best practices to help SMEs benefit from IP while mitigating risks in international trade.9 Centered around principles in five core areas, the ICC’s guidelines intend to help businesses protect IP, comply with IP laws, and deter counterfeiting.10 The ICC recommends the following in its five core areas:

 

  • Company Policy:

    Establish best practices and procedures to protect IP on an organizational basis. This includes enforcing business-wide compliance of policies to protect company IP.
  • Education and Awareness:

    Train all relevant employees to enforce strict IP-related standards. Implement procedures to ensure all employees, subcontractors, and other third parties comply with the company’s IP policies.
  • Supply Chains, Manufacturing, and Distribution:

    Stress the importance of IP legal compliance with customers and suppliers. The ICC recommends using contractual provisions to accurately detail any and all IP-related transactions to ensure accountability.
  • Security and Confidentiality:

    Develop physical and digital network security necessary to protect a business’s IP. This includes careful asset identification, inventory, and control. The ICC also recommends using best efforts to protect trade secrets and other confidential information through contractual and legal obligations like non-disclosure agreements.
  • Compliance and Audit:

    Maintain careful recordkeeping of IP-related materials, detailed and accurate labeling of IP-related products, and periodical review of the company’s IP protection policies to maintain security while facilitating potential future audits.

U.S. Government Also Helps SMEs Protect IP Internationally

 

The U.S. Government also notes the increasing complexity of IP laws, and thus provides best practice recommendations and resources to help companies protect their IP in the context of international trade.

 

Experts at StopFakes.gov suggest organizations consider securing their IP in foreign markets before doing business there. Further, SMEs may wish to secure their IP in various countries regardless of whether or not they plan to bring their products to those markets, in order to prevent the emergence of fakes.11 Pointing out that SMEs must seek protection in accordance with the laws of the ruling country and using its civil, administrative, and criminal enforcement mechanisms, experts suggest seeking local legal counsel to explore IP right protection strategies in foreign markets.1

 

To assist, the U.S. International Trade Administration provides IP protection toolkits and resources on a country-by-country basis, while the Department of Commerce Office of Intellectual Property Rights can help SMEs navigate foreign legal systems.13,14

 

The

Takeaway:

Protecting intellectual property in international trade is hard due to IP’s often intangible nature, and the increasingly digital nature of international trade makes it all the more complex. But resources like the International Chamber of Commerce and the U.S. Government offer best practice guidelines and other forms of assistance.

Megan Doyle - The Author

The Author

Megan Doyle

Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.

Sources

1. “Protecting Small Business IPR,” STOPfakes.gov; https://www.stopfakes.gov/article?id=Why-Should-Small-Businesses-Protect-Their-Intellectual-Property
2. Protecting intellectual property rights: Challenges, opportunities, and solutions, Deloitte; https://www2.deloitte.com/content/dam/Deloitte/us/Documents/public-sector/us-fed-protecting-intellectual-property-rights.pdf
3. “Protecting Small Business IPR,” STOPfakes.gov; https://www.stopfakes.gov/article?id=Why-Should-Small-Businesses-Protect-Their-Intellectual-Property
4. Intellectual Property Guidelines for Business, International Chamber of Commerce; https://cdn.iccwbo.org/content/uploads/sites/3/2016/11/IP-guidelines-for-business-English.pdf
5. Ibid.
6. Intellectual Property: Powerhouse for Innovation and Economic Growth, International Chamber of Commerce; https://cdn.iccwbo.org/content/uploads/sites/3/2011/02/Intellectual-Property-Powerhouse-for-Innovation-and-Economic-Growth.pdf
7. “Enforcing My IPR in a Foreign Country,” STOPfakes.gov; https://www.stopfakes.gov/article?id=How-Do-I-Enforce-My-Intellectual-Property-Rights-in-a-Foreign-Country
8. “Protecting My IP Abroad,” STOPfakes.gov; https://www.stopfakes.gov/article?id=Why-should-I-protect-my-intellectual-property-abroad
9. Intellectual Property Guidelines for Business, ICC; https://cdn.iccwbo.org/content/uploads/sites/3/2016/11/IP-guidelines-for-business-English.pdf
10. Ibid.
11. “Protecting My IP Abroad,” STOPfakes.gov; https://www.stopfakes.gov/article?id=Why-should-I-protect-my-intellectual-property-abroad
12. Ibid.
13. “Intellectual Property Rights Resources and Assistance,” STOPfakes.gov; https://www.stopfakes.gov/IPR-Toolkits
14. “Office of Intellectual Property Rights,” International Trade Administration; https://www.trade.gov/mas/ian/oipr/index.asp

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