Intellectual Property Issues for Exporters

‘Globalization’ of the economy has led to increased business opportunities abroad for many individuals and companies.  Expansion of markets for products and services outside of Canada also, however, raises additional issues for exporters interested in securing or maintaining protection over their intellectual property in other countries.  The purpose of this article is to point out some of the intellectual property issues which need to be considered by exporters.

Intellectual property takes many forms, some of which exporters may or may not have experience or familiarity with.  Statutory protection measures in Canada includes patents, trademarks, copyright and industrial designs, for example.  Other proprietary information may be held as trade secrets or protected as confidential business information.  It is essential for businesses seeking to export knowledge or technology to be cognizant of international protection issues in advance of commencement of export, since an attempt to maintain or secure protection after the fact may be too late.

With respect to patents there are several issues.  For example, patents only protect the patentee in the jurisdiction for which they are issued.  As such while an issuer may have patent protection in place or pending in Canada, a Canadian patent will not protect the exporter in the United States or elsewhere.  Patents would be required in those other jurisdictions, if it was desired to exercise the same statutory monopoly outside of Canada.  The necessity for these patents to be in place in other jurisdictions is further complicated by the possibility that it may be too late to apply for patent protection outside of Canada, depending on the timeline for the particular project and what has happened to date.  Patentability requirements also vary to some extent between countries, and some countries have different types of patent protection available within their individual country.  In any event, the construction of a patent portfolio for a particular invention or piece of technology is an issue to which the entrepreneur engaged in exporting or planning to export should at least address themselves to early enough in the process to be able to make the decisions with their options relatively open.

What is a patentable invention also varies by country or region.  An exporter may be able to uncover hidden value in their business by filing patent applications selectively in countries where protection is available, even if patent protection for the particular invention is not available in the home jurisdiction.  For example, business methods have been held to be patentable in the United States, while the issue is still up for grabs elsewhere, but the potential availability of business method patent protection in the United States is now an issue of interest to exporters, especially in the area of Internet or software companies but also in other fields.

Exporters may also find themselves in a position where they are licensing the use of other people’s patents for use in their own products.  There are a number of due diligence steps which can be taken in a licensing or other transactional situation to ensure that problems do not arise later.  For example, exporters may wish to seek an opinion as to whether their Canadian technology would infringe any patents or particular patents in a potential export country, or they may wish to have an opinion as to validity issues associated with various patents existing in a target country.  Issues as simple as verifying the registered ownership of various intellectual property rights might arise and merit some attention in the course of completing an export or licensing transaction.

Some exporters may also do business in areas where patent protection is not such a large issue or concern but trademarks and other types of protection are required.  In the consumer products or food industries, for example, while a patent may not be available or desirable, it is likely that exporters will want to expand their brand or use their trademarks in the new target countries, or alternatively develop new brands for use on a regional basis.  It is preferable in those cases, before large resources or time are devoted to the launch of a brand in a market, to conduct the necessary due diligence to ensure that the trademark is not already in use by someone else, or something else similar is not in use which might dilute the power of the brand.  It would also be preferable to know in advance if there is the possibility that the use of a trademark in another country might infringe someone else’s already registered trademark.  It may then also be the case that it is desired to seek protection for these trademarks in other countries.  Trademark filing strategies should be considered at the same time that marketing or brand launch plans are made, again so that hurdles do not arise later which create problems for the protection, exploitation or enforcement of your intellectual property rights in your trademarks, copyrights or otherwise.  Another issue which is not always considered is that of ‘regionalization’ of a brand – for example, local counsel may advise that a trademark which is fine for use in North America is in some fashion offensive or otherwise problematic in another market region.  Knowing this information in advance of launch can lead to a better positioning of the product at market entry.

While this short summary has focused on patents and trademarks, it is merely intended to illustrate the vast number of intellectual property issues which can arise for consideration in the development of an export strategy.  Some of the issues can be addressed as they arise, and some – patentability, for example – need to be addressed at an early stage to ensure that action is not taken which negates the existence of intellectual property rights which it is desired to protect.  Exporters should address themselves to these intellectual property issues as a part of the remaining planning of an international market or expansion.  Even if it is decided that no protective measures or action are required, addressing these issues sooner rather than later can strengthen any international business plan.

¹ Trade-marks Act, RSC 1985, c. T-13, s. 12(1)(b).

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