5 facts about intellectual property before export
More and more SMEs now recognize the benefits of export sales, such as: Increased demand, risk reduction, increased profitability and access to foreign resources and information. When setting up an export business, financial considerations are often high on the list of concerns, but intellectual property rights are also an important part of the success of an export business, writes Brian O’Neill of FRKelly – European Patent and Trademark Brochures.
When developing a coherent export strategy, the importance of intellectual property should be taken into account when establishing your brand in foreign markets. When planning the export of your goods and services, you must consider five important points.
1. IP strengthens your brand image
To know exactly how intellectual property can improve your brand, it is important to know what “intellectual property” is. Intellectual property includes a range of intangible assets derived from the creativity of your business, which may be protected as intellectual property rights. Examples of intellectual property that can be protected are trademarks, patents, and designs. Brands can protect a brand, slogan, or logo, while patents and designs protect the underlying technical innovations or appearance of a product. By registering your intellectual property, you can protect your brands and innovations, each of which is used to promote, develop and protect the brand image while providing important information about the quality, source and reputation of your products or services. , Brand reputation is critical to both the demand and pricing of your commercial offer. Therefore, it is important to make sure that your IP address is both protected and protected. Your company can use many forms of intellectual property to develop your brand in export markets.
2. Intellectual property rights may provide commercial exclusivity
Intellectual property rights can be guaranteed in your main target markets and provide a mechanism by which potential competitors can enter the same markets. This barrier to entry can translate into a significant business advantage, as it reduces both the time and effort your company requires to determine the presence of your brand. This limitation of intellectual property can not only reduce the necessary resources, but also provide an economic advantage, as market dominance can be achieved by minimizing the presence of competing companies. Establishing the superiority of the brand in a market then provides an arena from which your company can become a complementary secondary target market.
3. legal feasibility
In addition to the internal view of your company’s intellectual property, it is also important to be aware of the potential intellectual property rights in your target export markets. As a well-known example, Apple’s iPad® brand was already registered by another company in China, which led to delays and financial penalties for Apple when it hit the Chinese market. There are several ways to navigate through existing intellectual property rights in foreign markets. However, it is increasingly difficult to solve such problems before formulating an export strategy. The brand or product may be redesigned or altered prior to final production and distribution to avoid costly and possibly harmful recall of the product. Similarly, the time, money, and other resources spent on the design and manufacture of packaging, marketing materials, and other promotional items may be irretrievably lost when third-party problematic rights become apparent after the move. a market.
4. Language and cultural barriers and intellectual property
Speech problems are especially important when creating your corporate brand. A trademark or logo must be checked in the language of the relevant export market. It is quite common for a brand to have a completely different meaning in another language. For example, when Coca-Cola hit the Chinese market for the first time in the 1920s, the name of the company was translated directly into Mandarin under the name “Ko-ka-ko-la”. as a direct translation into Mandarin means “female horse bites the wax tadpole” (Morse 2009). Of course, this is not a translation we would like to combine with a consumer drink. Linguistic aspects are therefore another important factor to consider before valuable and often limited resources are used for the brand image, packaging and specifications of the final product. The same applies to cultural barriers that are often seen in the use of colors and symbols. For example, in China, a black border around a picture symbolizes death or the onset of death. It is therefore important to conduct an intellectual property analysis to identify competitive, linguistic and cultural barriers to entry into an export market.
5. Financial benefits of intellectual property
The intellectual property of your company is often a valuable asset in various business negotiations. In fact, intellectual property is one of the first things an investor must seek before providing funds to a company, including financing expansion into new markets. Intellectual property rights usually form the basis of a license agreement – another company can be considered. A license agreement allows your company to give another legal entity the right to market your intellectual property for a fee. Essentially, this model provides another form of export that allows indirect access to the market in question and is a business model adopted by many companies. Cellular phone manufacturer Nokia®, which does not manufacture or distribute cell phones or other hardware, is a good example of a successful licensee selling IP intellectual property to other manufacturers such as Samsung® and Microsoft®. By adopting this model, your company can earn revenue from typically impossible or inaccessible markets through a partnership with a licensee with the existing local business infrastructure. If third-party rights exist in a target market, favorable licensing terms may be negotiated by cross-licensing your intellectual property to the third party in question.
The benefits of exporting to businesses are obvious. However, care must be taken in determining financial, technical and legal market viability. In an increasingly saturated, globalized market, the role of IP in integrating your company’s brand into foreign markets is critical to the success of your export sales.