For Australian businesses, exporting presents an attractive opportunity for growth, providing access to new and potentially bigger or more lucrative markets around the world. But some small businesses are reluctant to expose their business to the global market, fearing that their products and designs will be copied, reducing their ability to compete against local players.
While a new business may protect its IP in Australia as a matter of course, this can provide little protection beyond Australian borders. Although international protocols mean it may be possible to protect and enforce IP rights with trading partners, unless small businesses protect their IP in each market they enter, they may leave themselves open to IP theft.
Small businesses may be tempted to try to protect every element of their IP in every possible market, but this isn’t practical for most businesses. Aside from the cost of filing registrations in multiple countries, IP rights will also need to be asserted and maintained – which can lead to significant legal, administrative and translation costs.
The most cost efficient approach to protecting IP for small businesses is to develop a considered IP strategy, which maximises protection while minimising costs. Small businesses can do so in five simple steps.
Consider your export strategy
Small businesses should ask themselves which markets offer the best potential for their products and services. The answers may depend on the macro factors like population and national wealth, or finding the right cultural fit could be more important for some businesses. Hegs pegs inventor Scott Boocock says a combination of factors helped him decide which 44 countries to export to.
“Our strategy for export was to choose countries with over 20 million people, and which had a level of GDP where people would go to the supermarket and actually spend money to buy Hegs pegs.”
“We choose countries that are already selling, buying and using pegs, but they have a minimum of 20 million people just so we can ship the right volumes over. We didn’t want to send boxes or pallets, we wanted to send shipping containers to them.”
Once you’ve identified which countries you’re interested in exporting to, look into the IP arrangements that apply in the jurisdiction.
Do your research
While protecting your own IP is a first priority for any small business, you also need to ensure that by exporting to a new country, you aren’t breaching someone else’s IP. Your product or brand may be unique in Australia, but you’ll need to ensure you’re protected from costly legal challenges from potential competitors. IP specialists, such as IP attorneys, can provide comprehensive searches, but by doing their own research first, small businesses can shape their own export strategy and ensure no nasty surprises.
Once you file applications to protect your IP, foreign IP offices will send you an examination report if it finds deficiencies in your application or that your claimed IP rights conflict with others.
Choose your solutions
Most small businesses will need to decide which elements of their product to cover with IP protection. Examples include the design of a product, its technical features, your brand or a combination of all three.
According to Scott Boocock, small businesses should think broadly when protecting IP. “We also protected the brand, and trade marked the stylised ‘H’. I find that even more valuable than the patents, personally, because your brand is everything. People buy because of the brand; they buy it because of the products. They don’t buy because of the patents. That’s just an extra protection to prevent people from copying the Heg peg.”
Understand the costs
For small businesses, protecting IP across multiple markets can be an expensive exercise, especially if you’re protecting more than one element of your product. This is where you need to be clear where the value of your product lies. If it’s inherent in the IP, then you need to take appropriate steps to protect it in the markets you care about most.
Monique File, co-owner of b.box baby goods, says that deciding where to protect your IP comes down to a commercial decision. For b.box, even though they invest a lot in IP protection, commercially it didn’t make sense for them to register trade marks in every market. “For a new business starting out with limited funds, it becomes a question of ‘what do you invest in – protecting your IP or developing your products.
“I think if we started again, we would probably have protected more upfront or potentially gone straight to China to register there. If we did that, we may still be in the same position as we are today, but we may have gotten there sooner.”
Enlist expert help
The final piece of the IP puzzle for small businesses is to seek expert help. Finding the right IP strategy can be complex, and no matter how much research you do, it’s likely that you will still benefit from professional IP advice.
Professionals who specialise in international IP protection can offer solutions that you haven’t yet considers and can also give you access to the benefit of their experience. As such, it’s recommended that small businesses consult the professionals to help ensure their strategy offers the protection they need, and sets their business up for export success.
By Andrew Watson, Executive Director, Export Finance, Efic