Are you considering approaching a global market with your business?

Expanding into a global market can seem daunting at first but it can provide your business with the opportunity to grow.

Before entering a global market, consider how protecting your intellectual property (IP) forms the basis of establishing your market position. It is also important to ensure you are not infringing the rights of others in your countries of choice.

How do I decide if a global market is right for my business?

There are many factors to consider when looking at a global market and assessing the resources needed to commercialise outside Australia. Analysing your resources will help to determine whether you are better off establishing your business in a domestic market first, or if approaching a global market at the same time is right for you.

You may wish to consider your:

• financial position
• target markets
• local regulatory requirements
• manufacturing capabilities
• distribution channels and partnerships outside Australia

How do I decide what kind of IP protection I need overseas?

It is important to know that registration in Australia does not automatically grant IP rights protection overseas. IP protection overseas will need to be obtained separately.  Ensuring you are covered in all the markets you intend to enter is important.

Consider whether you need:

• Patent protection overseas
• Trade mark protection overseas
• Design protection overseas

Navigating IP protection can be complex. IP Australia has created a range of resources to help guide you.

If you need help specific to your business or situation, it is recommended that you seek advice from an IP professional.

Where can I find out more?

To learn more about how best to approach a global market with your IP, visit IP Australia’s website.

If you need help specific to your business or situation, it is recommended that you seek advice from an IP professional.

Trade marks: improving export entry and performance

For Australian businesses, exporting is an attractive option for a growing business. Opening up new and potentially larger markets around the world. In a global economy, business value and intellectual property are becoming increasingly connected. But what can we learn from trade mark activity?

IP Australia recently released the 2021 Australian Intellectual Property (IP) Report. The report features their latest research into trade mark activity and how it can be an indicator of export entry and performance.

The research indicates that after a business files a trade mark, the likelihood of them entering a global market increases. It also estimates that if a business moves from 1 registered trade mark to 2 in an export market, it is 25% more likely to export to that country, compared to businesses that did not. For exporters with 6 or more years of continual activity in the market, filing an additional trade mark can generate a 30% increase in export revenue.

Before entering a global market, consider establishing a portfolio of IP rights. This could help protect your business assets and give you a greater chance of success in foreign markets.

Where can I find out more?

You can read more in the 2021 IP Report, or visit IP Australia to learn more about approaching a global market.

If you need help specific to your business or situation, it is recommended you seek advice from an IP professional.

Intellectual Property: the complete protection for your business

Going global opens you up to new and potentially larger markets, building and growing your business.

Intellectual Property (IP) protection can help you establish your market position and avoid infringing on existing IP in other countries.

Inventia Life Science is an Australian company established in Sydney in 2013. They focus on the development, manufacture and sale of equipment and reagents for advanced medical research assays by means of 3D bioprinting. Their mission is to inspire scientific progress towards better health by re-engineering biology.

Inventia has used a combination of IP rights to protect their business in their commercialisation journey, filing for their first patent in 2015. They then went on to file recently granted patents in the United States and Europe and have also obtained a design right to ensure that the look and shape of their product is protected. The final piece – a trade mark for complete protection, to distinguish their goods and services from other businesses.

You can hear more from Julio and Aidan from Inventia about their journey to commercialisation and the benefits of IP protection on the IP Australia website.

Where can I find out more?

You can visit IP Australia’s website to learn more about taking your business global. You can also read more about the common challenges for exports and what considerations you should take when it comes to IP protection overseas.

If you need help specific to your business or situation, it is recommended you seek advice from an IP professional.

Intellectual Property: Protect your great ideas when going global

Intellectual Property (IP) protection can help you establish your position when entering markets around the world. Research into trade mark activity tells us that businesses with a trade mark are more likely to become exporters, and, after filing a trade mark in an export market, they perform better, That’s why IP should be considered early to protect your business and your products.

Take Huskee for example. Huskee is a designer of reusable coffee cups and has created an innovative, reusable product that is changing the way take-away coffee and disposable cups work. Huskee’s intention is to enable sustainability within their industry, not just through the product they create but within the systems used to create it.

The product is made primarily from recycled husks of coffee beans, a by-product of processing that would otherwise be discarded by growers. This is a waste material which can only be manufactured in certain countries. ‘We’re manufactured in China, we’re designed in Australia but we are selling to over 70 countries now, so we have gone global very quickly’.

Huskee considered early on how to protect its brand and product design in overseas markets, with trade marks and design registrations.

IP is a valuable asset that can support you when doing business overseas. It’s important to remember that an Australian patent, trade mark, design or plant breeder’s right does not secure your rights outside of Australia. Like Huskee, you should consider IP protection in countries where you plan on doing business, including manufacturing and selling products online.

You can hear more from Adrian and Saxon from Huskee about their IP protection journey and how they have gone global with their products on the IP Australia website.

Where can I find out more?

Visit IP Australia’s website to learn more about taking your business global. You can also read more about the common challenges for exports and what considerations you should take when it comes to IP protection overseas.

If you need help specific to your business or situation, it is recommended you seek advice from an IP professional.

Intellectual property protection: Idea to international success

Before you think about exporting, it’s important you have a solid intellectual property (IP) foundation for your business.

Wheely Bug have been in operation since 1995. The Australian designers created the multi award winning ride on toy for children and toddlers at the cusp of walking. The bright and friendly designs are unique and promote gross motor skills.

Considering IP early was an important part of the businesses strategy, to protect its designs and products. The businesses instant success in a domestic market encouraged them to start exporting in 2000. The business expanded into a workshop with 5 employees in order to make 1000 ride on toys per month. By 2004 demand was so high that they expanded their manufacturing overseas to a US owned Chinese factory. Despite this global success, their headquarters remain in Cairns.

‘I think to have an I think to have early and well-protected strategy for your own designs is very important because that’s what you have. This is your product.’

It’s important to remember that an Australian patent, trade mark, design or plant breeder’s right does not secure your rights outside of Australia. You should consider IP protection in countries where you plan on doing business, including manufacturing and selling products online. It’s also important to ensure you are not infringing the IP rights of others in your countries of choice.

Discover more about Wheely Bug and its IP and exporting journey on the IP Australia website.

Where can I find out more about IP and exporting?

Visit IP Australia’s website to learn more about taking your business global. You can also read more about the common challenges for exports and what considerations you should take when it comes to IP protection overseas.

If you need help specific to your business or situation, it is recommended you seek advice from an IP professional.

Commercial agreements with commercial partners

When you trade beyond the borders of your country, you will encounter issues that are unique to the global trading landscape. Taking a proactive approach, particularly considering the types of commercial agreements that will need to be put in place with your international partners, can put you one step ahead. Each business and each commercial transaction is unique. This section introduces the different types of commercial agreements that may suit your business needs.

What is an agreement?

An agreement or a contract is essentially an understanding or arrangement between two or more parties (either individuals or entities) that sets out the respective rights and obligations of each party within the transaction.

Agreements form the backbone of business arrangements and transactions. The key to getting an agreement right is to ensure that the agreed position is clearly documented and suits your business needs (e.g. does it allow your business to do what your business wishes to do) and to control or minimise your risks (e.g. which party will cover claims and losses when things go wrong).

Setting out or negotiating these details at the outset are crucial as they can make or break a deal. It is also important that the terms are set out clearly and in an unambiguous way so that each party clearly understands their rights and obligations as well as the expectations of the other party.

There usually isn’t a one size fits all agreement, and it is generally recommended that each agreement be specifically drafted and tailored to your particular circumstances and transactions.

Types of Commercial Agreements

There are several types of commercial agreements, and each serves a different purpose.

Confidentiality Agreements

If you are planning to discuss confidential information with potential business partners, investors, manufacturers or customers, it would be prudent to enter into a confidentiality agreement (or non-disclosure agreement) with them prior to the disclosure. A confidentiality agreement may be unilateral (where the confidentiality obligation is on one party) or mutual (where both parties are required to keep the disclosed information confidential). Confidential agreements can be particularly important in circumstances where trade secrets, new technologies and commercially sensitive information (such as client lists) are disclosed.

In preparing confidentiality agreements, it is important to clearly define the confidential information that is to be disclosed and how it may be used by the other party.

Manufacturing Agreements

Manufacturing of products are often outsourced to a third party given that businesses often do not have the capacity or funds to manufacture in-house. In these circumstances, having a manufacturing agreement in place which clearly defines the rights and obligations of the manufacturer is crucial. Manufacturing agreements can often be complex but should cover all aspects of the transaction from product specifications and material procurement to payment and delivery. It should also include terms in relation to consequences of product defects or failure. It is also essential to include terms which govern and restrict the use of a particular design or IP.

Supply and Distribution Agreements

Supply and distribution agreements commonly arise in circumstances where a supplier or manufacturer engages a distributor to sell their products at a wholesale or retail level. This often involves the distributor purchasing products from the supplier or manufacturer and reselling these products. Such agreements can be exclusive (where a distributor is granted the right to be the only seller of the products) or non-exclusive (where there are multiple distributors of the same products), and be restricted to a particular geographical area or customer channel. For exclusive supply and distribution agreements, it is particularly important to include key performance indicators and the consequences of not reaching those targets, such as termination, or conversion of the granted rights to non-exclusive.

Intellectual Property Assignment and Licence

If you have purchased or sold a business with IP assets, or engaged someone to create a product or certain material for you, an IP assignment may be needed. An IP assignment is used to transfer ownership of IP rights (such as trade marks, copyright, designs and patents) from one party to another.

If, however you have permitted someone to use or exploit your IP but not transferred the ownership of your rights, a licence agreement may be appropriate so that you remain in control of your IP. For example, provisions of trade mark licences will often be included in manufacturing or distribution agreements to allow the manufacturer or distributor to use the trade marks to manufacture or promote products. However, ownership of the trade marks will remain with the original owner.

Consultancy Agreement

Businesses often engage consultants with specialist knowledge or skills to assist with a particular project or business need. This arrangement can be formalised through a consultancy agreement which covers, amongst other things, the scope of services, deliverables and IP property created by the consultant. If this aspect is not covered, under the laws of some countries (such as Australia) ownership of such IP will stay with the consultant.

Importance of a Written Agreement

While agreements can be verbal or written, it is best practice to have a written agreement in place for certainty. A written agreement will clearly outline what has been agreed to and the obligations of each party. A written agreement would also give you something concrete to rely on should a contractual dispute arise.

Enforceability and Local Requirements

If your business arrangements extend beyond Australia, it is important that your dealings and agreements also comply with the local laws and regulations of the foreign jurisdiction. It is recommended that local advice is sought given that local laws and regulations between each country are often quite different to Australia. Legal issues regarding import/export controls, IP and tax law are especially important.

Conclusion

Having appropriate commercial agreements, especially with international business partners, will help you run your export business smoothly and with more certainty. Putting an agreement in place prompts you to consider the specific details of your commercial arrangements and assist with risk management.

This article is written by Sylvie Tso, Principal at Spruson & Ferguson.