Export Goods and Services after Protection of IP Rights
In the modern interconnected world, it is a fact beyond shadow of any doubt that, Goods and Services, collectively referred to as “Products,” are being produced and delivered, online and in physical form, within national boundaries and across borders continuously, on a 24×7 basis irrespective of pandemics or weather. Business owners and producers would be aware that there will be some form of Intellectual Property (“IP”) embedded in each of these products. Before evaluating the percentage of IP content, it is important to establish a clear and objective definition of IP.
Definition of IP
With reference to the WIPO Convention Article 2(viii):
“Intellectual property” shall include the rights relating to: literary, artistic and scientific works, performances of performing artists, phonograms, and broadcasts, inventions in all fields of human endeavour, scientific discoveries, industrial designs, trademarks, service marks, and commercial names and designations, protection against unfair competition, and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields.”
The definition above encompasses IP Rights or ownership of creation of human intellect across entire human value chain across, “industrial, scientific, literary or artistic fields,” which is quite wide. The focus point is on creation of human intellect besides normal human activity. Thus, it must be something unique to an individual creator or inventor which is not common to all persons of similar skills and knowledge at the time it is created. Whether it is in tangible form like material goods, machinery, books, art etcetera or intangible form like audio-visual, in digital form or software application.
Embedding of IP
Intellectual element is embedded in production process of all types of Products, besides labor and raw materials found in nature. The next key point to note is that not all intellectual activity is termed as Intellectual Property. One must pass certain threshold to qualify the relevant intellectual work as an intellectual property. Property as the term implies, would have an title owner as otherwise it will become public property or abandoned property. Further to follow on from the creation of an intellectual property, does not automatically entitle the creator legal rights in his creation without meeting the legal requirements under the law of the country of domicile, where it is created or registered with an appropriate legal authority to obtain legal rights called Intellectual Property Rights of its owner.
Protection of IP Rights for Online Sales
Therefore, it is essential for an IP owner to protect its IPR otherwise it will be expropriated by others and lost. The IPR are territorial in nature and are valid only in the country where it was granted to its owner. In export and import of Products, whether IPRs are also exported and imported will depend on the nature of contract or sales purchase agreement. The following is a brief list of commonly used IPRs in order of increasing complexity for securing protection internationally:
- Trade Secrets
- Copyrights and Related Rights (Written literary works, pictures, website designs, music, movies, performances, songs etcetera)
- Collective Marks
- Trade Dresses
- Geographical Indications
- Industrial Designs
- Layout-Designs (Topographies) of Integrated Circuits
- Utility Patents
- Appellation of Origin
- Protection of New Varieties of Plants
Managing IPRs in Exports
For IPR owners, it is crucial to devote sufficient resources for managing and protecting its IPRs embedded in the Products to be exported, especially in the target countries. It is no surprise that if an IPR owner did not conduct due diligence or take adequate IPR protection measures, it may not be able to export its products. On the other hand, infringing products may be imported within the home country of the IPR owner. If such a situation is allowed to continue, then IPRs granted may also be held as invalid. The examples of such situations can be:
- Trademark registered in the exporting country but not in the destination country – If a similar trademark is already registered by another entity, then the Products may be seized as infringing Products.
- Industrial Design – The look, shape, colour combination of various consumer goods is confusingly similar in the destination country where the Industrial Design is not registered, then original Products may lose market share.
- IP License Terms – If the contract of sales does not address the licensing terms or limitations of use of IPR, then there is a risk of loss of IPR. Buyers may improvise or adopt the IP and register under their own name in their respective country.
- Resale Rights – The importers in the designated countries may also repackage, relabel, or modify the Products and export to third countries, which can also have an impact on the credibility as well as profitability of the original IPR owners. It is important to be familiar with exhaustion rights and legal provisions of target countries for resale of IP embedded products.
- Online Sales – The importer of Products with IPR, may be selling the Products online if there are no specific provisions for restriction of online sale in the sales purchase agreements. Exporters and IP owners need to be extremely cautious for inserting exclusive or non-exclusive and terms of license agreements for IPRs in addition to sales agreements.
In conclusion, exporters and IPR owners would require a strategic planning in view of their IP assets and long-term view for monetizing respective IPRs.
For strategy development and IP Audits contact firstname.lastname@example.org
The above article is not a comprehensive list of considerations for IPR owners and is not to be considered as an advisory. For further details and better planning of your exports, readers must take their own professional or legal advice.