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Global trade series: Exports & IP

Mills and Reeve

With Brexit negotiations underway, the UK’s future relationship with its biggest trading partner remains uncertain.

If, as predicted, access to European markets does become more restricted in the years to come, many UK firms will likely look to explore alternative markets to support business growth.

Data from international payment company OFX suggests that UK SMEs have remained confident, increasing their focus on global sales following the EU-referendum, an encouraging sign.

However, business owners looking to seize the international opportunities open to them must consider and review their approach to intellectual property, or IP, particularly in countries that have weaker protection, and where obtaining and enforcing rights is more of a challenge.

Different markets, different rules

The main concern for firms intending to export to other countries is that IP rules vary across markets.

Identifying what is worth protecting and at what level of investment, and formulating a strategy for enforcement if your rights are infringed is key to protecting this valuable business asset.

When exporting to a country with lower levels of protection, or where copying is more prevalent such as China, you might want to take defensive steps to minimise the risk of copying in that territory and the possibility of copies making their way into your home markets.

This could include obtaining trade mark protection for variations of the mark you intend to use and setting up detailed agreements with local manufacturers or sellers.

In highly developed countries which tend to have stronger protection and enforcement regimes, businesses will need to take extra care to guard against possible infringement suits brought by competitors. Exporting to the US, for example, would require careful preparatory work to minimise the risk of costly and disruptive litigation.

Top tips

From home turf to developing and highly developed countries, there are a number of measures that businesses can take to make their own IP as watertight as possible, whichever market they choose to export to.

When considering how best to protect your IP, consider these golden rules:

Begin with your home market, and make sure that your IP is protected there. After that, focus on key markets of interest in Europe or elsewhere. Remember that IP rights are territorial, and can apply to a single territory or to a group of territories such as the EU.

Before diving into export markets, use clearance searches to identify and navigate potential problems.

Plan suitable filing strategies in the export markets of interest. It is usually easier and less expensive to enforce registered rights, so try to obtain registered protection for key brands, designs and inventions. Where registered protection is not available, look into alternative ways to protect business assets. You might be able to use non-disclosure agreements to protect confidential information or know-how.

Get protection in place before launch to avoid the possibility of others getting there first with their own product or their own applications for registered rights. Build relationships with reliable IP advisers at home and in your chosen markets.

They can help to develop your IP strategy and act quickly if a problem arises. And, of course, keep innovating to stay ahead.

Is it all change in Europe?

The Brexit process has injected a lot of uncertainty into many legal areas and IP is no exception.

But European markets tend to have IP systems that are closely aligned with those of the UK, making the IP registration and enforcement process generally more straightforward.

Businesses may well have concerns about the effect of Brexit on the scope of IP protection currently available to them.

However, much depends on the type of IP protection businesses have or are seeking. For those rights that are affected, the outcome of the negotiations on Brexit will determine the future shape of IP protection.

It is worth noting that national trade mark, design and patent registrations will be unaffected by Brexit.

International patent filings through the Patent Cooperation Treaty system are also unaffected, as are European patents. All of these exist independently of the UK’s membership of the EU.

The unitary patent system may come into force in 2018 but there is considerable uncertainty around whether that will happen and the UK’s ability to participate post-Brexit.

For businesses which have EU trade mark (EUTM) or Community registered design (CRD) protection, there is a lot of ambiguity as to what will happen to those rights upon Brexit.

There are a number of possibilities including automatic conversion of these rights to UK rights, conversion on payment of a fee or entry onto the UK register upon renewal.

The uncertainty around what will happen has led some businesses to bolster their European based protection with additional national filings.

But both sides in the Brexit negotiations are working hard to maintain continuity for business and will try to avoid a sudden loss of rights.

Keep your strategies under review to minimise risk

There are a number of challenges associated with protecting IP when exporting overseas, and Brexit adds to the uncertainty.

It is a good time for businesses to review their filing and enforcement strategies to ensure that they are adequately protected and the risks are minimised.

Claire O’Brien
Head of IP Litigation at Mills & Reeve LLP