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When it comes to protecting patents in foreign markets, "a small business can't simply put its head in the sand and hope that the market takes care of itself," says Bob Siminski, a patent, trademark and copyright law attorney and principal at Harness Dickey, an intellectual property legal firm in Detroit, Mich.
Here are four ways business owners can protect their patents when they export a product to a foreign market.
When enforcing a patent, it's critical for business owners to retain legal counsel that has a deep knowledge of an individual country's intellectual property (IP) laws.
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"You need to engage an intellectual property rights attorney who is at least familiar with IP rights laws in the countries of consideration, and who has a network of respected attorneys in the same countries," Siminski says.
To ensure compliance with intellectual property laws, a business owner's domestic IP attorney will have to work in tandem with IP attorneys in the countries where products will be distributed or manufactured. These legal services often begin with an initial consultation, which can cost anywhere from $200 to $2,000. From there, a good IP attorney may cost between $300 and $600 per hour, depending on the attorney's experience level.
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In most cases, an IP attorney can help a business protect overseas patents by drafting an agreement with the business's foreign manufacturer. This is an important step since many knockoffs have their origins in the manufacturing process. The contract should have at least three components: ownership of the product, how the product is distributed and penalties for breach of contract, Siminski says.
If a business owner wants to export a product to other foreign markets, the product should have patents in each of those countries, Siminski says. "Let's say you're a sporting goods company, and the product needs to bear your trademark," he says. "Well, you need to register that trademark in the country where the product is going to be manufactured so that if someone is making knockoff products, you have an opportunity to enforce your rights."
Even if a business owner has both of these safeguards in place, he or she should be financially prepared to cover international legal expenses incurred by protecting a product in a foreign market. In the best case scenario, Siminski says, a patent dispute can be resolved within a few days by a court issuing an injunction on the offending party and stopping the distribution of the knockoff. But many times, it can take anywhere from 30 days to six months to get a decision injunction, resulting in legal expenses that can range from $15,000 to $25,000 for a product of moderate complexity, such as a power tool, Siminski says. The more complex the product, the more complicated the intellectual property rights - and the more costly the litigation, he adds.
For some business owners, it's not always feasible or efficient to chase down and stamp out every violation of intellectual property rights, as a larger company might, Siminski says. "You might not be able to approach this the way a multinational firm would, but there are strategies you can employ to obtain a certain amount of intellectual property rights," he says.
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