Are you managing your intellectual property?
In order to maintain your edge in the overseas market, it is essential that you go through the necessary registration and rights acquisition processes (e.g. patents, trademark, design, etc.) not only in Japan, but also in the country you are exporting to or expanding into.
Introduction
Have you given up on preventing imitations of your company’s products being sold overseas?
If you neglect this issue, the counterfeit may take on the name of the authentic product, and you may face a lawsuit claiming your product is the counterfeit.
Not doing anything about imitations of your product being sold overseas would be fatal to your business.
The top priority is to prevent conflict however, just in case, you must follow global standards and be thoroughly ready to fight in the event that your products are imitated.
Who should I talk to about patents, trademarks, and design for my overseas business?
Where possible, the best people to talk to are;
- A qualified patent lawyer or patent lawyer who works at a law firm
- Someone who deals with overseas companies more than Japanese companies,
- Someone who can offer advice on how to obtain rights which give you an advantage when expanding internationally.Meanwhile, you should do your upmost to avoid
- A law firm mainly handling application work with minimal experience in strategy proposal.
One way to spot the difference is whether or not the advising party also informs you about the business risks that could potentially arise by securing rights.
For example, advice like “It is possible to obtain rights however you can’t utilize them in the way you anticipate for such-and-such a reason,” or “There’s a hole in this application but if we try to compensate the scope will broaden and your stance will be weakened, so we should do such-and-such instead.”
Obtaining intellectual property rights are the key to your business’s foundation. An advisor that will start the application if you request but leave everything else up to you after that, including how to utilize such rights, will not be a powerful ally when you attempt international expansion.
Another method is making a direct request with an overseas law firm. However, you would need to have organized the moot points to a certain extent yourself, otherwise this method may be highly expensive due to a time-based fee system. Moreover, sometimes the service does not include after-care (notices about updates, etc.) therefore, if you are attempting IP management for the first time, you may feel more secure about first consulting a Japanese patent law firm.
What kind of IP related trouble can arise in the context of international expansion?
In the case of trademark registration, the following trouble may arise;
- Despite increasing exports and investments, due to a delay in trademark registration application, the company is unable to secure rights in the target country as there is already a similar trademark in the same category. Despite the company’s products being in demand in the target country, the company has to change the name of all of its products and services.
- A company is told in an advance study that there are no similar trademarks in the target country, however after applying for trademark registration, the company is rejected consecutively, and it takes considerable time and money until the registration process is successful. The company is given an explanation of the reason for the delay by the patent lawyer, however can’t really understand the reason, nor why it couldn’t have been avoided in advance.
- A company receives a complaint from a foreign company with a trademark that cannot be considered as similar to its own, and is then slammed with approximately 1.5 million yen in legal costs on top of not being able to register its trademark. Eventually, the company was able to register its trademark, however couldn’t produce a budget for overseas sales activities due to unforeseen expenses and pitfalls, therefore withdrew from the locality after a couple of years.
In the case of patent application, the following trouble may arise;
- Patent acquisition means disclosing a company’s technology and, even if other companies don’t follow immediately, they may surpass the company in a short period of time if it doesn’t seem like the company is capable of further technical innovation.
- In an investigation prior to patent application, even if it is discovered there are no equivalent patents in the target country it is still too early for a company to think it would have the advantage in the market of that country. By spending a few hundred thousand yen, it would be possible to confirm whether or not the same technology was patented in the country, however an investigation to confirm whether that patent had market competitiveness in the business context would be difficult, and may result in exorbitant costs. It would be risky to feel reassured by the former of the two investigations mentioned above, however the latter may lead to excessive expenditure. Also, depending on the result, the company’s business plan may be thrown off course.
- Even if it’s possible to apply for patents in multiple countries at once, there would be costs involved in patent application, registration, entry, and maintenance. Effective rights obtainment grasping competition trends of overseas markets requires considerable ability to gather information and formulate strategy in advance. Moreover, due to the fact that it may take several years for rights to be confirmed, it may not be easy for a company attempting international expansion for the first time to identify the best time to make a request for examination.
How much does it cost to apply for patents overseas and how long does it take?
Trademark registration begins from 500,000 yen and patent application begins from 2.2 million yen. The former would take at least one and a half years, while the latter would take around three years. If costs such as handling of rejection, translation, and annual maintenance fee after registration are added for each country in which the above rights are registered, ultimately, the total cost could add up to several million yen (across multiple countries).
At Paccloa, we often hear from companies that they can’t spend money on something at a stage where they don’t know if their product will sell or not, or, that they first want to begin the process after exhibiting at a fair so they know their product will definitely sell. However, unveiling your product at a fair, etc. significantly increases the risk of imitation.
In reality, there are many cases whereby companies begin the process of obtaining trademark and patent rights gradually from the country where they currently sell their products, or predict their products will sell. Be sure to develop a solid strategy with an expert prior to beginning the process.
*Every year for 2 to 3 weeks between April and June, companies can apply for a grant under the Project to Support International Expansion by SMEs. Half of the related expenses will be covered by the Japanese government, so do remember to regularly check the Patent Office’s website.
Now I know exactly how to protect my intellectual property.
I’m going to set up solid countermeasures and sell, sell, sell my product!
Great for you!
But remember, slow and steady wins the race.
Meanwhile, do you know about import and export regulations/standards?
Pardon??
You need to comply with all the regulations/standards to export from Japan and import into another country, otherwise your product won’t be allowed into your customer’s country, even if they have already purchased it.
Um..
Let’s just keep going for the time being, okay?
01-04 Do you know about import/export regulations/standards?
