Branching out: how to protect your business in new territories
The Coronavirus pandemic and Brexit may have caused an, albeit temporary, double whammy of business uncertainty, but important commercial opportunities have also been created. Significant, lucrative, markets such as Asia and Australasia are almost operating normally. If you are considering tapping into these markets, either as a way to expand your business, or as a means of countering revenue reduction in your traditional marketplace, you still need to consider your Intellectual Property (IP) and make sure it is protecting your brand. After all, you wouldn’t travel abroad without taking out travel insurance, so why would you launch your brand in a new market without IP protection?
It really doesn’t matter what industry you are operating in, the key message is: just because you have been able to secure IP in the UK, it doesn’t automatically follow through that you can take your brand into new geographic markets. Likewise, just because you may have used a certain brand name in the UK (without obtaining registered protection) does not mean you have the right to use the brand in other territories.
Let’s take an everyday product such as a hand cream as a working example. In an ideal world, that hand cream would be protected by possibly two layers of trade mark protection: one being the main house brand; and the second being the possible sub-brand specific to the hand cream and therefore different to the sub-brand on, say, a body wash. If the hand cream had particularly creative packaging, there may also be registered design rights at play. But for the purpose of this illustration, let’s just assume that the only IP is the brand name. You have been operating successfully in the UK and the time feels right to consider export opportunities; either as a direct result of increased orders to your website from outside the UK, or because a specific opportunity has arisen to distribute the product in Australia for example.
The starting point before committing to any new market which you are specifically targeting, for example Australia, is a local clearance search. The purpose of the search is to confirm that you are not going to collide with any local rights and that you are indeed in a position to secure the mark for yourself in that territory. The last thing you want is to commercially commit yourself to a local distributor which could result in both you and them being on the receiving end of an infringement action. Even if you do not pursue a registration, best practice should always be to undertake clearance searches to ensure you are at least free to use the mark.
It is also worth ensuring that your brand does not have any unfortunate or undesirable local meanings; there are several examples of high profile brands which got this wrong; the Vauxhall Nova car did not sell well in any Spanish language country – not surprising when ‘nova’ translates as ‘no go’.
Similarly depending on the market, does the brand need a transliteration? Will it be used in English or in the local script? Depending on the answer, further clearance searches may be needed around both versions. If we go back to the hand cream example, remember that aside from IP issues, there could be other barriers to entry such as compliance with local regulations around product testing and base ingredients, so again, local intel and research is key.
If your business has got to the point of international expansion, it is often better to consider the five or even ten year growth plan in terms of target territories as this often enables a more cost effective IP registration package. If you have a UK trade mark registration this can provide an excellent spring board to use the Madrid Protocol filing system which essentially allows you to cherry pick from the 90-plusMember countries in the system, which countries you want to secure registered trade mark rights in.
If you have been operating in the UK without having secured registered rights but also have plans to expand geographically, it is well worth securing your position in the UK market first, with a trade mark registration before you look overseas. Remember, the mere act of expanding your geographical footprint can put your brand on the radar in a way which may have not been the case before.
Unfortunately, as practitioners we all have at least one example of a client which had not secured its position in the home market before embarking on expansion plans and ended up having to fight to retain and regain the home ground, sometimes at the cost of having to withdraw from securing rights in ‘new’ markets.
As with most things in business, planning is crucial and ensuring that you have IP protection which supports the business drivers is often a key factor between those who make the transition easily and those who don’t.
We have a wealth of experience in helping companies take that next step, whether expanding to a specific market or using e-commerce platforms to facilitate global distribution.
So, in short: to have confidence in your expansion plans you need to understand and manage the associated risks. This is achieved by securing the brand in your home market; identify your target markets; at a minimum, run clearance searches for new key markets; consider if local intel is needed to navigate transliteration or translation issues, and protect your brand with registrations. Only then can you go forth and conquer the world!
If you would like to talk about expanding your IP protection, please do not hesitate to contact the author or your usual Barker Brettell attorney.
