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Steps to Protecting Intellectual Property During Production

Wednesday, 15th August 2012

In Australia, the protection of Intellectual Property during production is fairly straightforward. When you manufacture overseas however, you run the very real risk of having your product appear on the market with somebody else’s logo on it.

China in particular is a growing problem for offshore manufacturers. While China has regulations in place to protect infringements, their enforcement is often hampered by local government bureaucracy and a widely held belief that counterfeiting is more of a highly skilled craft than a criminal act.

With that in mind, here are a few basic steps you should take to protect your Intellectual Property overseas.


Register your trademark

Do this in the country you intend to manufacture in as soon as possible (before you begin manufacturing). If someone else beats you to it then, in China at least, the ‘first to file’ law applies and they can effectively prevent you from manufacturing and block your exports.

A case in point is Apple’s iPad, which Apple is unable to sell in China because another company, Proview, registered the iPad trademark there first.

An Australian patent or trademark is only valid in Australia, so register your trademark ASAP in the country in which you intend to manufacture.

Know the law

It is in your interests to know how the legal system operates in the country you intend to manufacture in. Learn the laws and then formulate a strategy that will best protect your rights under those laws.

Know your contacts by enlisting agents

If you are dealing directly with a manufacturer, make sure you check them out thoroughly. Are they a legitimate company? Do they have any black marks against them for previous IP infringements? Can they be trusted with your product? The best way to do this is to have a representative on the ground in that country, such as an import agent; someone who knows the laws, the culture and all the main players.

Do the paperwork

Never rely on verbal agreements or promises. Have everything in writing and make your contracts watertight. Make sure they are signed by all parties and include agreement that an English version takes precedence over any other language. Make sure they include an arbitration clause.

Be discreet; agents can again be useful in this regard

To minimise the possibility of someone walking off with your ideas, only tell those who need to know, keep all documents secure and obtain non-disclosure agreements from your business partners. Also, have your local import agents monitor production to make sure your product is only being manufactured in the quantities that were agreed upon.

While this may all sound somewhat cloak and dagger, industrial espionage is big business and very much a part of today’s world. The cost of taking these basic steps is nothing compared to the cost of losing your rights to a product you may have spent years developing.

If your IP rights are violated, you may find yourself spending all the money you planned to save by manufacturing overseas on fighting innumerable court battles to try and retrieve what, in any other circumstances, would have been rightfully yours.

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