The Electronic Retailing Association

Article: Intellectual Property - Six Important Questions you should be asking which are still so underestimated

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Tina Osojnik, LL.M., M.B.A.

 

Tina Osojnik, Master of Law, EMBA, has long been actively present in the field of intellectual property rights.

She gained her first experience at the Office for Intellectual Property, where she advised many companies and individuals on the subject of protection, defence and exploitation of intellectual property rights. She then moved to the private sector where she led the Intellectual Property & Brand Protection department at Studio Moderna Group – that included a leading multi-channel e-commerce and direct-to-consumer platform in Central & Eastern Europe with a vertically-integrated network reaching more than 400 million consumers across 21 countries.

Tina was primarily active in the area of strategic advertising and effective protection and enforcement of Intellectual Property rights, including contractual relationships and due-diligence matters. Currently, she is partner in a boutique firm, where she covers strategic intellectual property and international law and offers consultancy services to various international clients.

Past projects have included strategic management of brands, patents, information technology, trade secrets in U.S., Chinese, Russian and EU markets. She is also an Expert and Business coach at EASME, active lecturer at faculties and international conferences and is a mentor to many start-ups in Slovenia.

Since I have been working as a business/legal consultant and EASME coach in the field of strategic intellectual property management and international business law, I have come across many challenges companies face and it is irrelevant whether a company is a start up or multi-national corporation.

Six essential questions

Whenever a company invents some new product or service, their first aim of course is to sell. This is perfectly fine, however there are six questions a company should ask itself:

#1: Is this product/service providing me with competitive advantage?

#2: Where do I want to sell?

#3: Have we checked whether our core markets are free of potential infringement from us?

#4: What is my business model?

#5: Do we have relevant contracts in place?

#6: Are we prepared to enforce our intellectual property rights when it comes to infringement?

The Impact on Revenue and Brand Value

These questions may seem time consuming and irrelevant, however, they are more important than you may think. Why? Because each of these questions make you think about your strategy and the results of your strategic thinking always result in either win or loss... of course we are talking about money and brand value.

Prevent third parties from copying and leaving you without revenues.

The first question is very important already in the development stage. Are you developing something that someone has already done? If the answer is yes, then you lose any chance to be first and competitive and also, you risk being exposed to lawsuits which can of course be very stressful and costly. So, in the development phase, be sure you are developing something that is so inventive that it does not infringe third party rights. If you are so inventive then you can protect your rights and even if not licensing them, at least you have a chance to prevent third parties from copying and leaving you without revenues.

Establish core markets

If you are clear to go, then you need to establish your core markets. Why? Because it is utopic to expect to register rights all over the world and then monitor the whole world - it is impossible, incredibly expensive and it can make you go crazy. You have to be very strategic and decide on core markets and then focus on them, both in terms of registering and in terms of enforcing.

Prevent copying

Then the important step is to decide on a business model. Why? Because with the right business model and relevant contract in place, (and of course by registered intellectual property rights), you have so many options in terms of higher prices and clauses that prevent stealing/copying. Both aspects are equally important from the revenue point of view. By registered intellectual property rights you have a right to increase prices (consequently brand value increases) and also you prevent copying which also has positive impact on your financial sheets and brand value.

Avoid unnecessary losses due to poor contract management

It is so important that a company is aware of contract relevance and that it takes all necessary measures to have contracts that suit national legislations, because while intellectual property law is international, enforcing is still national. As contracts for USA are not the same as for China or EU, no USA non-disclosure agreeement fits Chinese legislation on this matter. Contracts must always think upfront in case of potential breach. I know companies do not like to spend too much time on that part, however experience shows a lot of unnecessary losses due to poor contract management and drafting.

Trust is fine, control is better

I know that lawyers may sometimes seem business stoppers and business may think we are slowing you down, however whilst trust is fine, control in this case is definitely better. We usually build a long term business relationship based on trust, however, we should always think: what if? What if, for example, your distributor ends the relationship and you do not have the right intellectual property clauses in place? He may copy you, own your domains, or social media profiles in one market and then you have to negotiate with him which takes a lot of energy, time and money and of course, the market is closed for that time period - no other distributor will want to start business with you until you have all disputes solved. Or, what if your manufacturer is in China? Are you aware of legal restrictions in the intellectual property field and in the field of confidential data protection? And even if he is not in China, do you restrict the use of your intellectual property rights? Do you have them protected in his territory, so you can at anytime enforce them or find new manufacturer without any fear of being copied by old one?

Monitor markets and partners

When you have taken all the above steps and you manage your risks, you have to be prepared also to monitor markets and partners, so budgeting for that part is also important, otherwise all previous investment in development, registration and contracts is useless. Again, monitoring of only the crucial and biggest markets is optimal, however there it should be consistent and timely. Today it is not so hard to enforce, since international legislation allows quick actions against infringers, especially online, and of course companies should always focus on the biggest infringers because whatever action a company takes, it costs money. So, strategic thinking in all steps is necessary and worth it. This is also very important for your customers, because you protect them from illegal and low quality counterfeits and knock offs, and by that you build also their trust and loyalty.

It is important to keep in mind that the brand is only as strong as it can be legally enforced through registered rights and contracts. This is very relevant for investors, strategic partners, mergers and acquisitions. Every due dilligence consists also of the legal/IP part and if rights are not protected in order to provide the investor with exclusivity and the option to protect this exclusivity, they will not enter the agreement. And so you see, there are many benefits in taking a strategic approach to protecting your knowledge, know how and inventiveness - the result is always the same - a strong brand, a valued company and happy customers.

TINA OSOJNIK, LL.M. MBA