Wen Xie, partner at Global IP Advisors, LLP in Washington DC.
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Coca-Cola originated in Atlanta in 1886 and became available in every US state by 1895. It then expanded to Canada, Cuba and Europe, but international bottling operations did not begin until the 1970s Philippines in 1912. For modern companies, globalization means that cross-border collaboration can be necessary even in the earliest stages of a business model.
While the global supply chain can bring efficiencies, it can also pose dangers to IP and brand enforcement as your business relies on foreign subsidiaries and distributors to bring a product to market. Here are some insights from my work as an IP attorney that brands should consider.
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Your distributor’s role in patenting your goods
Imagine you are a company based in country A and looking to contract with distributor Y to take your goods to country B. You discuss the basics with Distributor Y: their relationships with retailers, their ability to provide logistics or warehousing support, and costs, of course. When negotiating contracts with your prospective distributors, consider both country B’s patent marking requirements and distributor Y’s role in helping to enforce your patents abroad.
If country B is the US and you have successfully obtained US patents for your goods, you must mark your goods in order to recover the full amount of monetary damages for infringement. This means marking the patented product with the word “Patent” or the abbreviation “Pat.” followed by a list of the applicable patent numbers to properly and constructively inform your competitors. In this way, if your patent is infringed, you can claim monetary damages up to the maximum period six years before the date on which you learn of the infringement. Without proper marking, your damages will only begin to accrue after the alleged infringer has actually been notified (e.g. via a letter of cancellation) of your patent, which can take years after the infringement has begun.
What do your chain partners have to do with this? Maybe you need them to mark your products for you. This usually happens when you haven’t gotten a patent yet when you enter a new market, but you get a patent after the business has already started. At that point you will need your distributor or other partners to mark your finished products for you because you are in another country.
If you assume this is an easy fix since you can just call and ask for a favor, think again. I’ve seen partners and suppliers refuse because it means more work for them. This is an issue you should talk about at the beginning of your business dealings rather than waiting for you to suffer monetary damage.
When you need a foreign export license
An export license is a government license to conduct a specific export transaction (including the export of technology). You may need a foreign export license if any of the following apply to you (this is not an exhaustive list, by the way).
• You have foreign subsidiaries for research and development purposes.
• You have production facilities abroad.
• You have entered into a joint research and development agreement with a foreign-based company or entity.
Export licenses are not required for all types of products, but they are can apply to specific technologies, including those related to navigation, information security, telecommunications and specialized electronics.
Let’s take an example of a situation where an export license may be required: a foreign laser company with a 100% subsidiary in the US The US subsidiary is developing a new type of laser and wants to send the specifications to the mother ship abroad. Depending on the circumstances, the subsidiary may need to seek approval from the Bureau for Industry and Security to do this.
Ecommerce platforms are essential for global brand enforcement
If your company makes consumer goods, you should pay attention to e-commerce platforms, especially the big players like Amazon and eBay. Basically, if you create something that can be sold on Amazon, your goods can be sold on any or all of the online marketplaces. Therefore, you should check all these platforms regularly.
Since selling over the internet nowadays means selling worldwide, you should also pay attention to e-commerce platforms in other countries. Some of the main ones are Alibaba, Meituan, and Pinduoduo, all of which are based in China. If you know that your goods are being sold on these sites, you should familiarize yourself with their respective takedown procedures and take advantage of them. These procedures are platform specific and allow an IP owner to make internal requests to remove entries they believe are infringing their IP.
In general, you need a registered IP address to submit a takedown request for any ecommerce platform. And if the platform is based abroad, you will probably need to register your IP abroad as well. The good news is that you don’t need a patent to file a takedown request on these sites. Usually, trademarks and copyrights work just as well to remove a listing as long as you prove they relate to the product being sold.
Remember that deleting a listing is only a temporary solution. Even if they are penalized by the platform, sellers can create a new account and relist the infringing product. So it is important to keep a close eye on these marketplaces.
Final thoughts
Thinking about your company’s global IP strategy may not seem like such a pressing issue since you’re overseeing an international business expansion, but doing this from the start can save you costs, damages, and major controversy. Since many IP issues require timely legal action, it is important to understand the IP strategy early on in order to avoid unwitting waiver of rights.
The information provided here is not legal advice, is not intended to replace legal advice on any specific matter, and does not create an attorney-client relationship.
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