Ajankohtaista IPR-alalta

Securing the investments in your brand

31.03.2010

The article was originally published in Managing Business Risk, 7th edition (2010), by KoganPage. Author: Ari-Pekka Launne, IP Lawyer, Kolster Oy Ab.

The changing brand landscape

The modern world and the new ways of communication and transport have resulted in more and more companies facing the need to go global. It is no more only a question of how to do it but also a huge challenge with multiple risks. To survive, companies must pay close attention to the changes in the environment, in demand and in new innovations. The amount of information available is massive, and much effort is required to winnow out the unnecessary.

In the good old days the main focus of companies regarding their IP was on registration of the rights, mainly intended to secure the companies’ possibilities to use technologies they had developed, as well as marks and designs of their own. Since the market was more local the system based on territorial protection was sufficient. Co-existing rights in different lands did not affect the business in the ways it may now. Now the globalization is a fact and new thinking is needed.

New risks have evolved and the remedies available are not always efficient. In fact, it appears that companies must put more and more effort to minimizing the risks beforehand instead relaying on actions that are possible at the time of need. Although all risks cannot be completely ruled out with planning, however carefully one plans, a lot can be done to avoid certain situations in which companies on the global market may easily find themselves.

To be able to plan an effective IP strategy it helps if one understands the life span of the rights as well as the life span of the product. The similarities are obvious. In principle, there are three phases and each of them plays a role in the overall success. These phases are planning, securing and follow-up. In the following each is discussed in more detail.

The planning or pre-registration phase

The old saying ‘well-begun is half done’ gives advice that applies to the protection of IP rights and also brands. Most companies are familiar with conducting searches and investigations to reveal bars against the use or registration of their marks, to secure their freedom to operate and to help them in foreseeing risks related to certain market areas. With globalization, these actions are coming more and more important and should therefore be routine for all serious players.

Therefore, the next step to be taken in this phase should not be so difficult. It is simply setting up a framework for carrying out these searches and investigations in an integrated and timely manner, and looking for information regarded as necessary. The needs of companies vary depending on several things, resulting in the individualization of the planning phase for each company. This is why advice on these matters also needs to be on an individual basis.

It is necessary to understand that the planning or pre-registration phase relates not only to registration of rights but also to all matters relevant to the IPR of the company. Naturally, when discussing, for example, the registration of a single trademark in a limited amount of countries some planning is needed too, but considering the whole IP strategy of the company, wider insight is needed. Therefore, the following questions need to be addressed.

• Decisions on attitude towards others: competitors, imitators, copycats, infringers; to be an active or passive player; to avoid infringing others or to act in the grey zone? If necessary, can this attitude vary depending on the other party and if so, how?
• Geographical issues, relating to the planned market areas and the company’s position in that market: where to register, where to enforce, where to attack others and where to defend their own rights.
• Registration systems, relating to the different possibilities for obtaining protection for IPR: when to apply for national registrations; when to use international registration systems; how to combine the different forms of IP to maximize the protection; and how to avoid unnecessary registrations and costs.
• Working processes and actions in the pre-registration and registration phase of a single right: when to search; what to search for; how to put to use the results; optional ways of trying to overcome bars that have been revealed; and when to drop the case and start with another?
• Working processes in the enforcement and maintenance of the rights.
• Who makes the decisions: (a person, a department, just to name some possibilities); in-house or outsourcing?
• Budget issues relating to IPR. These go hand in hand with the overall IPR strategy, but it is worth while to pay some attention to these matters as well in the course of making decisions on the above issues.

Once these questions have been addressed, the company is well on its way in concluding the task of creating their IPR strategy. While it may have taken some time and effort to prepare, and while it may need to be amended from time to time, it will surely make life easier for those responsible for these matters. Experience has shown that both working hours and money can be saved later when this phase has been completed with care.

If possible, it would be a good idea to have this IP strategy in writing, preferably as a company handbook to IP related issues. First of all, collecting such a manual means that things need to be considered more carefully. It is also easier to insist that the IP strategy and the accompanying processes are followed by the personnel, when such a manual is available. New technical possibilities to have this document available, for example on the company intranet, make updating easy and facilitate distribution to those involved.

Securing the rights

As mentioned above, when plans are clear and the guidelines that were set up are followed, the actual registration of rights would not seem to be too complicated. After all, in a case where the company uses a network of attorneys the majority of work done in this phase is sending instructions and receiving reports. Since the process of making decisions and responsibilities are clear, all kinds of unnecessary communication can be avoided, which of course also means money saved.

It is, of course, necessary that the company itself also keeps records on their IPR. Depending on the partners chosen and the amount of attorneys involved as well as on the decisions relating to the responsible bodies in the registration phase, it may be inevitable that no one is aware of each and every registration or application. This is a risk and may result in loss of rights and complications later. To decrease this risk it is necessary to choose a limited number of persons to be in charge (preferably one) and to create a network that supports efforts to manage the portfolios.

Once again, the needs and practices of companies are different depending on the size of the company, the amount of their IPR and the chosen strategy. Therefore the practices that are found to work should be put in use and those that do not not should be developed further or disregarded.

Follow-up and enforcement

The third phase is likely to be the trickiest. It can be divided into some subcategories as follows:

• Actions needed to keep the registrations valid and in force: this may include not only the payment of the annual fees or renewal fees but also the proper use of the marks.
• Watching the registers so as to be able to take action against competitors and third party applications in time, to avoid limitations to own IPR and, possibly, to also collect information on competitors or potential competitors.
• Actions against copying and counterfeiting.
• Actions against infringements of own IPR.
• Actions to defend own rights when accused of infringement and to open more space for own IPR by clearing bars against use or registration (cancellation actions, counter claims).
• Entering into agreements relating to the use and registration of IPR with others. Actions needed to maintain and enforce such agreements.
• Educating and increasing the awareness of employees in IPR related issues and company policies.
• Collecting information and feedback useful for amending strategies when needed.

When working on global business one soon discovers that in spite of all needs and efforts to harmonize the laws, rules and regulations that have an effect in IPR, there are a number of variations of this simple theme. This fact calls for constant updating of information on what kind of evidence is needed in this or that case, what is generally accepted and what is particular for a certain country or area. It is quite common that companies do not prepare themselves in this respect but tend to begin the collecting of evidence only at the time of actual need. While this is understandable, and maybe even the most convenient way of doing it, (since possibly one never needs to actually do it), in many cases it proves to be the cause for failure in an action and results in limitations to or, in the worst case, complete loss of rights. This risk too can be decreased by planning and being consistent in sticking to the plans.

Special attention should be paid to using local aid and specialists in foreign jurisdictions to be able to enforce the company’s IPR in full. While it involvers more costs, at the same time it secures the skills and knowhow on the legislation and procedures of that particular country. Risks in choosing the local representative can be decreased by networking with those who have a good reputation and have been recommended by those you know.

And the other way around…

One cannot completely avoid situations in which legal advice and the help of lawyers is needed, however carefully one tries to build a strategy to allow operations without interference of others. The competition sometimes calls for actions against competitors, and some competitors may be more eager than others to attack for the least of reasons. In such cases, a company may finditself being the defendant, even if it did everything according to the book. Luckily, good planning aids in this case too.

Actions brought on the basis of non-use can be met with confidence if material supporting one’s case has been collected in time. In these cases, the risk is managed by regularly giving out information on use to the public as well as documenting the use by collecting leaflets and advertisement material from time to time. When acting globally, this also needs to be done globally. The wider the market area, the more material is needed to cover it. As stated above, it is easy to note in this case too that such collecting of evidence may be an extremely hard task if done only in the case ofimmediate need.

To lessen the risks of being sued for infringement of the rights of others one needs to be well aware of what rights others might have. Once again, searches and investigations are needed and may also reveal information that is useful in other respects, such as spotting changes in the strategies of competitors or finding out about new possible competitors.

If and when disputes arise, the resolutions come to play important part in the life of the company. These may be judgments, decisions of administrative bodies or settlement agreements. They may limit the future possibilities to expand the scope of protection, geographical scope of actions or the use of some rights in some particular respect. All the same, effort should be put into following these and to implement the stipulations in everyday activities – to avoid being in breach with them and thus liable for damages or compensations. At the same time, these kinds of documents are equally valuable as certificates of registration, as they may indeed define some rights and obligations that otherwise would not be recognized or that would be unsafe, to say the least.

Conclusions

There are always risks that a company faces in the course of business, and some of these relate closely to IPR. These risks should never be underestimated or downgraded. They do depend on the company’s field of activity, geographical issues, their nature or the competition and so on, but the risks are always there. The companies must do what they can to avoid them and the best they can to overcome the situation when the risks become reality.

Careful planning of a company’s IP strategy, consistent securing of its rights by registrations and available supplementary means to enforce those rights against competitors and other players in the field results in the best outcome. This all means consistent work that seems endless, but it pays back in the form of helping the company to maintain the high value of its brand.