Essential Part of Protecting Your Business; How to Avoid Exporting Your Rights to Intellectual Property

Article excerpt

rotecting your intellectual property is an essential part of protecting your business, its products and its brand. From a firm's corporate identity to the quality of its goods or services, exercising intellectual property rights enables companies to obtain significant market share and command a price premium.

Working with partners and suppliers in international markets presents a wealth of opportunities as well as challenges for owners of intellectual property assets.

China, as the world's second largest exporter of manufactured goods, is recognised as a dominant player in the global export market, but is also one of the world's largest importers and is hungry for new technologies, goods and services. The world's most populated nation presents a huge potential market for UK firms.

However emerging economies haven't been immune to the global downturn.

The latest figures from the National Bureau of Statistics show that China experienced its weakest quarterly growth in 2009 since records began in 1992, largely as a result of reduced demand for

Chinese-manufactured products in the US and Europe.

As a consequence the Chinese Government is keen to stimulate domestic demand for Chinese-manufactured products.

Being active in China offers a first-mover advantage for companies able to establish their products and services there, as well as presenting intellectual property pitfalls.

China has been notorious for its failure to protect certain aspects of intellectual property, from infringement of trademarks to problems with the quality of Chinese-manufactured goods. Counterfeiting of branded goods is common and a considered approach is needed to counteract it. Remedies are available under civil and criminal law in China for infringement of intellectual property rights, although the remedies are hard to enforce. Resources need to be targeted locally to prepare a case, as many counterfeit manufacturers will simply temporarily close down their operations whilst under investigation.

Robert Capper, head of law firm Harrison Clark's commercial department says: "Many people associate intellectual property with the mechanical aspects of creating, maintaining and protecting trademarks, copyrights and designs.

However when it comes to international trade, intellectual property covers much wider areas of business, including managing the supply chain, sales and marketing." Firms using manufacturing bases in China need to beware the risks associated with bringing new technologies into the area. Using a non-disclosure agreement before talks with potential partners begin is essential. Where possible, protect intellectual property by limiting the level of new technology that international partners are exposed to, by for instance using overseas manufacturers to produce older technologies which haven't come to market yet in those territories, or by splitting manufacture of different components across a range of suppliers.

Robert says: "Be prepared for your manufacturer to have the potential to reverse-engineer and replicate your product within days. …