| The importance of securing and protecting intellectual | | | | ruled in their favour at the end of the two year legal |
| property (IP) rights often only becomes apparent for | | | | battle. |
| Malaysian exporters when it is too late, i.e. when | | | | Exporters need to carry out appropriate research |
| faced with an infringer or when an infringement suit | | | | before creating a mark for the overseas market. A |
| has been filed against them. Such problems usually | | | | mark which is not descriptive of the products it |
| arise because of the lack of awareness of the value | | | | applies to in one country may be descriptive in |
| and importance of IP rights and the role they play in | | | | another country. Whether a mark is descriptive |
| modern day commerce. When planning their export | | | | depends on how the term is understood by the |
| strategy, many exporters either omit the step of | | | | traders in the same course of business or consumers |
| protecting their IP rights abroad or list it as the last | | | | of the specified products. A recent case in Spain is an |
| step in their strategy. | | | | apt example of this. There, the mark 'MATRATZEN' |
| This article intends to raise awareness among | | | | was allowed registration for mattresses and related |
| Malaysian exporters on the methods and importance | | | | products despite the fact that the word 'Matratzen' |
| of securing their IP rights abroad, how to ensure | | | | means mattresses in German and was not allowed |
| exporters' products do not infringe the IP rights of | | | | registration in Germany. |
| third parties and how exporters can even gain | | | | PROTECTION OF COPYRIGHTS |
| additional revenue streams by exporting their IP | | | | There is an almost global protection for copyright |
| without the accompanying product. | | | | work. In most countries, including Malaysia, |
| DO NOT UNDERESTIMATE THE IP RIGHTS IN | | | | registration is typically not required and copyright |
| YOUR PRODUCT | | | | subsists in the work in its expressed form. Ultimately, |
| IP subsists in almost every aspect of a product. | | | | copyright protection depends on national law. Before |
| There is IP in the packaging of the product, in the | | | | publishing a work abroad, one should investigate the |
| know-how and technology behind the design and | | | | scope of protection available, as well as the specific |
| manufacture of the product and in the labels and | | | | legal requirements for copyright protection in |
| booklets accompanying the product. If these IP rights | | | | countries in which protection is desired. |
| subsisting in the product and the trade name are not | | | | IP RIGHTS IN LICENSING, FRANCHISING & |
| protected, unnecessary costs and risks could | | | | JOINT VENTURES |
| threaten the company's survival or the sales of the | | | | Securing IP rights abroad enables the owner to |
| product in the overseas market. | | | | generate more income from the IP. This is done |
| TIMELY ACTION REQUIRED | | | | through the execution of licensing, franchising and |
| If the product is successful abroad, it is likely that | | | | joint venture agreements, which gives rise to the |
| another party would manufacture a similar or identical | | | | owner authorizing a third party to either use their |
| one and try to make a profit. Or if the exporter | | | | registered trademark/service marks or allow them to |
| advertises extensively abroad and their trade name | | | | manufacture and distribute their products for a |
| becomes well known among the locals, another party | | | | royalty fee. As a result, companies earn additional |
| may attach the exact or similar name onto their | | | | profit while retaining ownership over their inventions, |
| products, thus taking an unfair ride on the reputation | | | | innovative designs, creative works or trademarks. |
| of the trade name. Without IP protection, it would be | | | | Owning IP rights also gives greater leverage and |
| time-consuming and more costly to stop these | | | | bargaining power to companies in negotiating deals |
| offending acts, if at all possible. In some cases, it | | | | with other companies or individuals. |
| may be too late. For instance, when an invention is | | | | OWNERSHIP OF THE IP RIGHTS |
| exhibited or sold abroad prior to any application for | | | | Another important aspect of securing IP rights |
| patent rights in that country, the early disclosure | | | | overseas is the issue of ownership of IP rights in a |
| results in loss of novelty, one of the criteria for | | | | country, which is often overlooked. The importer, |
| patentability of an invention. This would render the | | | | distributor, joint venture partner or franchisee often |
| invention non-patentable and the exporter would | | | | registers the IP rights under their own name as |
| have lost 20 years of potential monopoly on that | | | | though they own the IP rights. Care should be taken |
| invention. Exporters should adopt the golden rule in IP | | | | in all agreements with foreign parties to ensure all IP |
| - apply for IP rights before the product is introduced | | | | rights subsisting in the product and any |
| into the market and NOT when the product is | | | | improvements/innovation in the product belongs to |
| successful and infringers have appeared. | | | | the Malaysian owner. Exporters need to ensure that |
| To avoid the possibility of infringing the rights of | | | | their IP rights are not 'hijacked' by their foreign |
| other parties abroad, exporters can conduct a search | | | | distributor, franchisee or joint venture partner. The |
| on the database of registered trademarks, patents | | | | Author is personally aware of a case whereby one |
| and industrial designs in the country they intend to | | | | of the Malaysian distributors of an Indonesian |
| export their products to. A search for trademarks, | | | | manufacturing company had applied to register the |
| industrial designs and patents will reveal whether a | | | | manufacturer's mark in Malaysia despite the fact that |
| similar brand name, industrial design or invention | | | | ownership in the mark belonged to the Indonesian |
| exists. As IP rights are strictly territorial, a search | | | | manufacturer. |
| should be done in the national IP office or the | | | | ENFORCEMENT OF IP RIGHTS |
| regional IP office, if the country has one. The search | | | | Mere attainment of IP rights in a foreign company |
| report from the IP office assists in determining the | | | | alone is not sufficient. Third parties may often adopt |
| availability and registrability of a trademark and | | | | the IP rights without the consent of the owner. |
| industrial design and the patentability of a product. | | | | Therefore Malaysian exporters need to put in place |
| If there is a similar trademark, the exporter can | | | | appropriate measures or extract obligations from |
| change his mark and then distribute his products to | | | | their distributors to ensure that there is close |
| the overseas market. For patents, if there is a similar | | | | surveillance on any infringement or misappropriation |
| granted patent or industrial design registered, the | | | | of IP rights in the market place. Bear in mind, mere |
| exporter should consider exporting his product to | | | | registration of trademarks, industrial designs or |
| other countries where a similar patent or industrial | | | | patents is not an end in itself. The foreign |
| design did not exist. Alternatively where possible it | | | | government is not obliged on its own to monitor any |
| should innovate upon its product further to enable it | | | | infringing acts; it provides the legal framework under |
| to be patentable or design registrable. Exporters | | | | which offending parties can be sued or prosecuted. It |
| should seek the professional advice of patent agents | | | | is ultimately the responsibility of the IP rights owner |
| in this respect, as the issues concerning the | | | | to keep surveillance in the market and take the |
| patentability of innovated products are quite complex. | | | | necessary action in a firmly manner. |
| ISSUES TO CONSIDER WHEN CREATING A | | | | Prompt action taken when the offending acts are |
| TRADEMARK | | | | first committed leads to favourable results, often |
| In the case of trademarks, care should be taken in | | | | with little costs. Delayed action can be detrimental to |
| choosing a name that is suitable in relation to the | | | | the owner of the IP rights as the offender may then |
| country the products are being exported to. What | | | | find it worthwhile to challenge the validity of the IP |
| may be a meaningless word in Malaysia may be an | | | | rights. |
| offensive word abroad. Or the word may be | | | | ESSENTIAL STEP IN EXPORT PLAN |
| unpronounceable to the people of that country. | | | | The recognition of IP rights subsisting in a product |
| Also worth considering is whether you should register | | | | and planned efforts to secure valid IP rights in foreign |
| your trademark in its translated version, i.e. in the | | | | countries are necessary to obtain enforceable rights. |
| local language as a preemptive measure against the | | | | The selection of countries and identification of IP |
| infringement of your trademark. A good example | | | | rights to secure must be an integral part of a |
| would be one global giant in the beverage industry | | | | company's production, marketing and distribution |
| registering "ke kou ke le", the Chinese version of | | | | strategies. It should not be an afterthought or last |
| their famous trademark in China, while Nestlé | | | | ditch marketing effort. Unfortunately, the laws of all |
| has a Chinese version of the "KIT KAT" mark. | | | | countries do not give the advantage of testing the |
| Starbucks could have avoided unnecessary legal | | | | market before applying for IP rights, so instead, the |
| expenditure had they registered the Chinese version | | | | application of IP rights has to be done at the |
| of their world famous trademark. Their mark was | | | | beginning of the export strategy or even earlier. |
| infringed in China by a local coffee chain, which was | | | | Note: The trademarks identified in the article belong |
| using the mark "XINGBAKE". The word "XING" means | | | | to their respective owners. The Author does not |
| "star" in Chinese and the word "BAKE" sounds like | | | | claim any proprietary right whatsoever; they are |
| "Buck". Fortunately for Starbucks, the Chinese courts | | | | used merely for educational purposes. |