Chapter 10:KEY ISSUES RELATED TO IP RIGHTS INTERNATIONALLY

CHAPTER 10

Key Issues Related to IP Rights Internationally

Societal Recognition of IP Rights

A prime reason that IP laws vary from country to country is that the concepts of property have developed differently among the societies of the world in two respects: recognition of intangible property rights and recognition of individual property rights.

Initially, recognition of intangible property rights occurred primarily in Europe, the Americas, and countries and territories under their influence. The laws of many countries have therefore failed until the modern era to protect property rights in intellectual works. Even today, some countries are more progressive than others in expanding their IP laws to cover new types of works.

In countries ruled under socialist or communist law, the political philosophy disfavors individual property rights in favor of communal rights. Although these countries have and are developing modern IP laws, enforcement of IP rights is often difficult because the populace has been educated to understand that property rights are common to all.

An international trader will therefore find more protection and ready enforcement of IP rights in some countries and regions of the world than in others. If a trader is operating in countries with minimal IP protection, the trader may need to take his or her own measures to protect IP from infringement as much as possible.

CULTURAL ISSUES RELATED TO DEVELOPMENT OF IP Cultural differences will affect the value, meaning, and acceptance of your IP in foreign markets. The IP you choose to market or to use in connection with your products or services will be successful in capturing a significant market share only if you have taken into account cultural differences. You must be sufficiently flexible in developing and using your IP to ensure that the culture of your customers is respected. The success of your business depends on it. In a commercial context, culture is a set of conventions that indicate the preferences of a society in relation to marketplace. These conventions suggest the etiquette, traditions, values, and living styles of a group of people. When trading internationally, you must be aware of and sensitive to other cultures, and you must adapt your IP to the preferences of the foreign market. Culture applies to people, not to nations. Although it may be possible to identify an overall culture for a particular country, many subcultures are likely to exist. Once you have identified the foreign countries where you intend to market your IP and have learned the cultural rules that you think might apply, you should avoid clinging to the rules as preconceived notions. Flexibility and adaptation are extremely important, particularly in the fast pace of today’s world where people

are on the move, cultures are crossing country borders, and cultural rules are constantly evolving.

In researching and testing markets for your IP, you will need to follow some initial cultural guidelines to ensure successful acceptance of your IP. It will be important to determine whether a general protocol tends to be applied throughout the country or whether many subcultures are present. You will need to consider the size of your market in terms of these subcultures, and the means by which you can adjust your IP to appeal cross-culturally.

If you are meeting foreign traders interested in your IP, you will also need to be aware of the cultural protocol that is likely to arise at the first contact. Cultural issues include greetings, courtesies, business ethics, decision making, gender, meeting formalities, and business attire. Be certain that you approach these cultural issues with the proper attitude. Cultural missteps are inevitable and will be made on both sides. Humor will ease a tense situation, and respect and awareness are likely to bring acceptance.

Trends Toward Globalization and Uniformity

The treatment of IP rights has been long recognized as an indirect barrier to trade. Beginning in the 1800s, multilateral trade agreements related to IP rights have been adopted, two of the most famous being the Berne and Paris Conventions. Over the decades, these Conventions and many other agreements have come into effect and been strengthened by periodic amendments.

In the 1990s, giant steps were made toward globalization and uniformity in commercial practices worldwide, including the registration and protection of various types of IP rights. The Uruguay Round of the General Agreement on Tariffs and Trade (GATT), signed by 117 nations in 1993, took effect in 1995, resulting in creation of the World Trade Organization (WTO) and implementation of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS). Regional agreements encouraging trade and the protection of IP rights have included the North American Free Trade Agreement (NAFTA) of 1993 and the United States Andean Trade Preference Act (ATPA) of 1991.

Multilateral agreements specific to IP rights have also proliferated in recent years. The Trademark Law Treaty was adopted in 1994, and the Madrid Protocol was adopted in 1989 to amend and strengthen the Madrid Agreement, by which IP rights can be registered centrally for all member countries.

When you begin developing a global IP strategy, you will need to consider the expansion now underway in reducing trade barriers. Although some countries continue a self-imposed isolation, most have come to recognize that development and refinement of a global economic strategy is important to the growth and maintenance of a strong economy. Uniformity among countries facilitates the registration and protection of IP rights, and your global IP strategy should take advantage of the regional and international systems of protection being created.

At the same time, it is essential to take into account the limitations of the crossborder systems and the national differences that remain. Many of the international

Cultural Do’s and Don’ts

WHEN YOU DEVELOP YOUR IP DO consider whether it will be universally acceptable and desirable to consumers from different cultural backgrounds, including moral, religious, educational, historical, and geographical factors. Try to develop IP that can be easily modified to account for cultural differences. Be responsible for the creation of IP that has a positive influence on society. DON’T try to please all people everywhere, because your R&D costs will be exorbitant. Avoid developing IP that has core features that are so rigid or restricted that they cannot be changed without great labor and expense. Do not cling to preconceived notions and generalities, but instead recognize subcultures within cultures.

WHEN YOU FIRST MEET A FOREIGN TRADER DO use a title to show respect. Wait for the other party to initiate informality. Reply to inquiries immediately. Be friendly and enthusiastic but not overbearing. Allow the other trader equal speaking time. Confirm your understanding and the other trader’s understanding, and be watchful of language barriers that affect mutual comprehension. DON’T be in a hurry. Determine in advance whether it is common business practice in the other party’s country to develop deals over time.

If not, make your deal. If so, plan to establish a professional relationship before you sign any contracts. If you are seeking more than a one-time deal, you may need months or even a year to reach a long-term arrangement.

WHEN YOU SOCIALIZE TO ENCOURAGE BUSINESS DO accept an invitation if your host graciously extends it. Go prepared with several conversational topics that might interest your host other than the business at hand. Research the cultural norms of gift exchanging, and consider a gift that represents your country. DON’T offer to socialize if your host sticks to business or is constrained by time during meetings. Avoid criticism of your host’s country and government, and do not raise sensitive topics such as politics, religion, or personal issues. Do not consume alcohol in excess.

and regional systems are new, and older ones are being amended periodically, so that the effect on IP rights is not always certain. In accepting and modifying national laws to comply with international agreements, each country is moving at its own pace, with its own preferences, and in accordance with its own priorities and agenda. Your IP strategy must be sufficiently flexible to allow for the varied and changing international IP scene.

Role of Politics

Political events have a major impact on the economy of a country, and therefore on the value of IP rights within that country. Government instability can devastate a country’s markets, while a stable government can be a great asset. A strong and growing economy in turn tends to have a calming effect on political turmoil. Although some would argue that politicians should take less of a role in regulating the commercial affairs of private traders, the influence of politics will no doubt always be a major factor because these two forces are so entwined.

International trade plays such a significant role in a country’s economy that governments throughout history have used direct and indirect trade barriers to force changes in the governments and policies of other countries. Trade barriers include boycotts, quotas, tariffs, import and export prohibitions, licenses, consumer and labeling requirements, and environmental regulations. A country’s failure to adequately protect the IP rights of foreign traders is an indirect trade barrier. Foreign countries often use trade sanctions to influence another country’s domestic and foreign policies and practices, and favorable trade preferences to reward countries that implement changes thought to be desirable in the international community.

As a global trader, you must stay in touch with political trends. Your IP strategy should reflect the political situation in various countries. You will need to decide whether you have a market for IP there, whether and how you can protect your IP there, and whether you might lose some value in your IP if you fail to protect it despite present difficulties. TIP : Do not erase a country or region permanently from your list. Watch for laws and the political climate to change and look for new opportunities as trade barriers are relaxed. Before committing to do business in a particular market, you should consider whether the country’s political past and current political climate are conducive to your trade. However, the past is not necessarily the deciding factor. Given international pressures toward peaceful encouragement of commercial exchange, your markets are more likely to expand than to be limited by historical disturbances.

Regulatory Laws

In any country where you use or exploit your IP rights, you are responsible for knowing the law. In many countries, IP law is bound tightly with unfair competition laws, and acts of unfair competition and infringement are often punished as crimes. Means of enforcing IP rights, including settlement negotiation, civil suits, and criminal prosecutions, are all subject to regulatory laws.

Regulatory laws relating to IP rights are in a state of flux throughout the world today. Many countries are conforming their laws and regulations to uniform international standards. New forms of intellectual property—particularly those related to computers and electronics—have given rise to new legal issues, requiring the development of new regulatory laws to set standards and provide protection.

It is essential that you know and understand the legal implications and boundaries of commerce in your own country and abroad. An attorney with

international legal experience can advise you on the issues that you should know. You should select an attorney who will keep you advised of changes in domestic and foreign laws and practices that are likely to affect your IP rights.

Internet Issues

In the realm of IP rights, the Internet poses some thorny issues for global traders. Hundreds of thousands of business-related websites have been created, and thousands more are created every week. Top-level domain names (such as “.com”,“.org” and “.net”) are also multiplying, including top-level domain names for national networks. Small and large business alike are creating websites and reserving primary and secondary domain names. They are, however, plagued by “cybersquatters” who register names likely to be used by both start-up companies and established brands.

The Internet’s potential for reaching markets with relative ease and minimal expense is exciting, but the protection of IP rights on the Internet is particularly difficult. A person can digitize, compress, upload, download, copy and distribute IP to thousands and millions of users in different countries at a time. Protected materials—writings, sounds, graphics, photographs, and so forth—can be stored on a network and delivered quickly and cheaply through cyberspace. The opportunities are immense, but enforcement of IP rights, ensuring appropriate usage of IP, and collecting compensation for the creators are tremendous challenges. To add to the problem, international and national IP laws and practices have not kept up with technology.

The Internet is a public domain, and therefore individual rights in IP can be lost if the IP is not protected before being placed on the Internet. Most countries that recognize IP rights are applying their existing laws protecting trademarks and copyrights to IP on the Internet. However, the laws and regulations are far from settled, and they were developed while IP law was based on a territorial concept of marks that were primarily used locally or within a nation. Consumer confusion across borders was minimal and could be dealt with if and when it arose. On the World Wide Web, IP conflicts are no longer limited in geographical terms, and national laws do not necessary address the issues relevant to conflicts in cyberspace.

Global traders are well-advised to protect their IP by ensuring its registration prior to release on the Internet, registering their names and trademarks as domain names worldwide, and employing monitoring services for secure delivery and collection of compensation owed.