Despite the fact that international trade is more streamlined and interconnected than ever before, there are still a number of issues prevalent in the industry right now. These issues are creating problems and making things more difficult for supply chains around the world to function at optimal levels. Here is a look at three of the most important issues that are affecting global trade right now.

1. Rising tariffs

As the world’s largest economy, the United States has a lot of economic power and influence. However, under President Trump, the United States has decided to engage in a series of trade wars, using tariffs as its main weapon. Throughout his campaign, Donald Trump repeatedly stated that he believed that the United States was suffering from a series of bad trade deals and currency manipulation tactics from nations such as China.

Once he got into office, President Trump started imposing several different tariffs on imported goods. He justified them as an attempt to make trade conditions more favorable for the United States.  In the past two years, Trump has put 10-25 % tariffs on hundreds of billions of dollars’ worth of Chinese goods. These goods include solar panels, steel, aluminum, and many others.

In response to these tariffs, China has also put tariffs on hundreds of billions of dollars’ worth of American imports. Currently, the United States has more tariffs on Chinese goods than China has on U.S. goods. However, this tit-for-tat trade war seems to have no end in sight. Now China has put a ban on buying U.S. agricultural products and has also devalued its currency as a further attempt to win the trade war with the United States.

This protracted trade war is disrupting the free flow of trade between the world’s two largest economies. This trade war and its consequences will be felt around the world for some time to come. The levels of trade that exist between the two nations will impact many other countries.

2. Intellectual property theft and counterfeiting

This issue also is primarily between China and the United States. President Trump has accused the Chinese of participating in rampant intellectual property theft via cyberattacks and forced technology transfers. Many different parties have accused the Chinese of counterfeiting numerous brands and products.

The continuous theft of intellectual property by Chinese companies is a very serious issue. Even China’s President Xi Jinping has spoken out against it and expressed his belief that stronger punishments for infringement and violators are needed. The Federal Reserve Bank of Minneapolis conducted a study in 2015 that determined that roughly half of all of the technology owned by Chinese companies was obtained by foreign companies.

IP theft is a major global trade issue because companies are unlawfully profiting from breakthroughs made by other companies. The incentive for business to innovate reduces and often leaves markets flooded with counterfeit products. This increases competition, thus reducing prices for businesses who spent the initial research and development money to improve their products. These businesses should therefore be able to charge more to recoup those costs of development.

When nations believe that other nations are stealing their trade secrets, the consequences can be severe. For example, President Trump claimed that one of the primary reasons why he levied such strong tariffs on China was to get back some of the money that American companies lost through intellectual property theft by Chinese corporations.

Despite the growing awareness around the issue and actions being taken to deal with it, intellectual property theft continues to be a major issue. In fact, multiple Chinese citizens working for Apple as engineers were recently arrested for attempting to steal trade secrets from Apple regarding the company’s upcoming autonomous vehicles.

3. Governments confiscating shipments

Although international trade companies have long been forced to worry about pirates from places like Somalia interfering with shipments on the oceans, governments are now actively intercepting vessels and their cargo on a much larger scale. For example, the nation of Iran has recently seized three oil tankers in the Persian Gulf.

Iran is doing this as a retaliation for the strict sanctions that the United States government has placed on it. Trump’s sanctions are an attempt to choke off Iran’s oil sales, which are the backbone of its economy. President Trump has long criticized the 2015 nuclear deal that was struck between the two nations, and is using the sanctions to try to pressure Iran to renegotiate the deal.

The recent seizures made by Iran have irritated President Trump. As a result, he has appealed to the United States’ Western allies to create a military force that can guard vessels passing through the Strait of Hormuz and other dangerous Middle Eastern waterways. Some of these allies, such as Germany, have said no.

It appears that many nations do not want to partake in the conflict between the United States and Iran.  Considering the fact the United States’ previous long, drawn-out conflicts with Middle Eastern nations were extremely unpopular with many nations, it is not a surprise that countries are not rushing to join the United States in a military conflict with Iran. This is especially true considering the fact that nuclear weapons are at the heart of the conflict.

There’s still lots of hope for the future of trade, despite current tensions

Thanks to increases in modern technology, international trade is still thriving. However, the extensive amount of rising tariffs, counterfeiting and intellectual property theft, and government seizures of vessels are all creating problems for global trade right now. These problems appear to revolve mostly around three nations: the United States, China, and Iran. All three of these nations have vastly different political ideologies and all three are very powerful.

It is unclear how the three nations will resolve the tension in the future. However, for people around the world who work in and depend on global trade, export numbers continue to grow worldwide. With new trade deals signed regularly, the hope will be that current problems can be solved quickly and peacefully.

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When selecting an intellectual property (IP) protection mechanism, it is important to determine what is necessary to protect the product and what it will cost to enforce that protection. A trademark or patent only means something in a market if its holder is prepared to defend it against infringements. In some markets, that may not be feasible.

Intellectual property (IP) protection mechanisms are only effective if evidence of infringement is monitored. A lack of surveillance for IP infringement can lead to a loss of patent or trademark protection, for example:

• Laches: When a patentee waits too long to lodge a complaint.
• Equitable estoppel: When a presumed infringer, relying on actions or communications from the patentee, reasonably believes they can continue to practise the patented production process.

How are patents and trademarks infringed upon?

It is important that patent and brand holders are proactive about patent and trademark protection. There are several types of infringement:

• Literal infringement: Where each and every element of a patent claim is found in the alleged infringing product or process.
• Doctrine of equivalents infringement: Where the alleged infringing product or process is substantially the same as the patented product or process.
• Contributory infringement: Where a party contributes to infringement of a patent by selling a component that has no other use but as part of a patented product.
• Inducement to infringement: Where one actively and knowing aids and abets another who is directly infringing a patent.

IP infringement monitoring is also an important function in the prevention of counterfeiting. Counterfeiting of products can lead to millions of dollars of losses, depending on the product and how long it persists without being detected and acted upon.

It also has the potential to be dangerous for consumers. Industries such as the pharmaceutical industry invest significant resources to prevent counterfeiting, which has the potential for disastrous results. Additionally, counterfeiting can undermine an organization’s reputation and brand image.

Want to learn more about mitigating potential IP risks? Check out the FITTskills Product Development online workshop!

Your next steps in patent and trademark protection

Monitoring for IP infringement requires establishing surveillance protocols that can assist in detecting infringement as well as counterfeiting. Organizations have a wide variety of internal practices and monitoring of external indicators that they can use.

Internal protocols could include:

• Ensuring the claim and scope of patent or trademark registration is sufficiently broad to claim clear economic potential
• Reviewing licence agreements on a regular basis
• Acting quickly to contact infringing parties
• Monitoring internal processes
• Following security protocols for shipping and traceability, e.g. RFID tags, container seals, UPC bar codes
• Employing product protection techniques, such as hologram labels, and other identifiers that cannot be copied
• Monitoring waste/scraps to prevent use of legitimate proprietary materials to produce unapproved, unlicenced products
• Training employees throughout organization on importance of IP protection and potential leakage points

External protocols could include:

• Employing infringement monitoring services or designating in-house personnel to monitor key relevant web and media sites to watch for potential infringement
• Ensuring suppliers are delivering authentic components to prevent risk of sub-standard or counterfeit components
• Qualifying distributors to ensure counterfeits have not infiltrated legitimate goods
• Checking in with licensees and distributors if they complain of infringements
• Educating retailers to recognize legitimate products
• Conducting audits of product on retail shelves
• Working with law enforcement agencies, including border control agencies, and assisting to identify seized products
• Employing appropriate legal counsel to follow up with infringement and counterfeiting claims

Diligent surveillance for infringement and the prevention of counterfeiting is important for organizations to recoup their investment in research and product and brand/image development. While monitoring for infringement in the global market is complex, it is important for organizations and investors to ensure their investment is protected and that international trade operates in a fair and equitable manner.

Implementing intellectual property protection strategies

Organizations involved in international trade in any capacity, whether licencing, off-shore manufacturing or exporting, must ensure that they identify and protect the IP that underlies their competitive advantage. It is imperative that they research and understand the IP protection environment in each country where they are involved.

Organizations need to determine if patent and trademark protection is viable by asking themselves “what is the cost of losing ownership of specific IP?” Then if their IP is worth protecting the next questions are “what is necessary to protect our product?” and “what will it cost to enforce that protection?” Employing due diligence to properly assess the costs and risks to IP before entering a market is a smart, proactive business strategy.

Organizations willing to make a commitment to protect their IP should:

• Select a method of protection.
• Monitor the use of their IP.
• Ensure proper contractual agreements are in place for all international trade activities.
• Obtain qualified legal advice.

A lack of patent and trademark protection can cost organizations millions of dollars in lost sales if IP is not properly assessed and valued by organizations.

Furthermore, it risks losing millions of dollars—of resource investment in research and development, acquisition of facilities and equipment, training and the building of corporate brands and images—to unscrupulous competitors who do not share the burden of those initial product development activities, and take advantage of the lack of IP protection.

IP protection is an important aspect of business activities that is integral to the position of an organization and its products, in the international marketplace.

The post How to develop effective international patent and trademark protection appeared first on Trade Ready.

The greatest inventions, political and social advancements and maximum profit-making endeavours in human history have originated in the minds of people. They all start in the same place: as an intangible idea.

Intellectual Property (IP) is an essential and valued resource. From patents and copyrights to industrial designs and trade secrets, IP can be the distinguishing factor and main driver of revenue for an organization.

It is critical for organizations to recognize IP as a valuable corporate asset and to mitigate potential risks associated with IP infringement in order to ensure business viability within both the domestic and international target markets. 

Intellectual Property is a general term for the set of intangible assets owned and legally protected by a company from outside use or implementation without consent.

The World Intellectual Property Organization (WIPO)—the UN agency mandated to advance the development and protection of IP internationally— defines IP as: “…creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce”.

The owners of IP rights may use, sell or license them to others.

IP is traded every day between people, nations and industries to the benefit of the global economy. Every effort must be made to protect their owners’ rights while simultaneously advancing their shared accessibility.

Overseas, products are counterfeited on a mammoth scale or re-engineered with small changes and then patented as if they were new inventions. Because much of the theft is not counted, estimates of the total vary. In 2010, the commander of the U.S. Cyber Command and director of the National Security Agency, General Keith Alexander, stated that, “our Intellectual Property here is about USD 5 trillion. Of that, approximately USD 300 billion [6%] is stolen over the networks per year.” He later called the theft “the greatest transfer of wealth in history”. However, IP that is stolen over the Internet constitutes only a portion of total IP theft.

Want to learn more about mitigate possible risks by developing and implementing strategies and activities to monitor and manage them? Check out the FITTskills Feasibility of International Trade online course!

Develop Options and Select Strategies

For those ventures that contain significant IP risk, the organization will develop strategies to reduce or transfer this risk. In many cases, organizations will want to access or hire specialists in this area who can assist them in identifying current and workable strategies for their IP protection needs.

1. Registering Copyrights/Trademarks and Applying for Patents

Organizations may need to register any relevant copyrights/trademarks and apply for relevant patents in the target market(s). Every target market will have its own rules and processes. For more information on how to register copyrights/ trademarks and apply for patents in a particular market, organizations may engage a trademark or patent agent or the Intellectual Property office of the target market. Once a market has been chosen, the timing of these applications can be critical, so the application process should be initiated as soon as possible.

2. Establishing Contractual Security

Organizations may seek to protect their IP through carefully constructed legal contracts. Contracts that protect IP include the following features:

• Non-disclosure agreements (NDAs), ensures that employment agreements, licenses, sales contracts and technology transfer agreements protect IP from the onset
• Clauses covering IP, such as a clear ownership clause

Once the contracts are established, organizations should regularly engage with their business partners to emphasize the importance of those clauses to the ongoing business relationship, and to ensure that partners fully understand what those obligations mean for both parties.

3. Implementing Security Measures

Organizations may want or need to strengthen their security procedures when getting involved in a new international venture. This can help to quickly identify unauthorized or malicious activities by internal and external parties. Security strengthening practices can include the following examples:

• Conducting background checks on key personnel/partners
• Restricting IP access to essential parties, contractors or supply chain partners
• Prohibiting unauthorized copies of IP, e.g. on USB devices, shared network drives
• Encrypting all IP that is transmitted digitally and electronically
• Physically locking areas where IP is stored

4. Acquiring Insurance

Organizations may want to transfer some of their IP risk by acquiring insurance. Intellectual Property Insurance typically protects against the significant legal costs that will need to be paid if an organization pursues its IP claims through the court system. It can cover both enforcing and defending claims:

• Enforcing claims against infringers who breach the organization’s IP: Legal costs relating to IP breaches includes damages, such as loss of profits or reputation and settlements to any IP right domestically or internationally.
• Defending infringement claims made against the organization: This includes infringement claims against the organization as well as claims made against its customers or licensees. Infringement claims often refer to a violation of a copyright or some other type of IP theft. The claims are often based on plagiarism, meaning someone steals the creative work of another person.

The post 4 ways to protect your intellectual property in foreign markets appeared first on Trade Ready.

Service providers often deal with confidential and proprietary customer information. Depending on the type of services being offered, the ability to maintain the confidence of customers is essential to a service provider’s competitive advantage and reputation.

It is also important to ensure information security and confidentiality to prevent breach of contract that could result in litigation procedures from customers.

Service providers need to ensure that contracts or service agreements clearly specify these 8 key aspects:

1. Security measures to protect customer’s private and proprietary information.

For example, service providers must work and store all private customer information in a secure online site.

2. Licence agreements for third-party intellectual property being used by the service provider and the limitations of those agreements for customers.

For example, if a service provider has a licence to use Microsoft or Adobe applications to provide their service, it must be sure what the conditions of those agreements are, especially if the applications are accessed by customers.

3. Licence agreements with third-party intellectual property being used by customers and the limitation of those agreements with service providers.

For example, service providers must be aware of the agreements that customers have with any other service providers to ensure they are legally allowed to access and use any programs their customers use.

4. Allowable use of licensed intellectual property and the number of licences permitted (e.g. software programs) over the lifetime of the contract.

For service providers using proprietary applications, it is important to stipulate what the customers or licensees are allowed to use the applications for, how many can use the application at any given time, and for how long.

Interested in a broader look at adapting your business to an international market? Then the FITTskills Products and Services for a Global Market course is for you!

5. Copyright ownership over material produced by the service provider for the customer.

This could include statistics, data and any information that has been produced based on proprietary information. For example, a consultant may produce a report for a customer that is copyright protected and owned by the customer, or an educational consultant might provide workbooks for a course that are property of, and copyright protected by, the service provider.

6. Copyright ownership over material produced collaboratively as an outcome of the service contract with the customer and the service provider.

This is especially important to stipulate in contracts where research, development and testing services are being provided. The share of ownership needs to be negotiated when there are potentially profitable outcomes.

7. Share of patent protection for processes or materials produced collaboratively as an outcome of the service contract with the customer and the service provider.

This is generally negotiated in advance where there are potentially profitable outcomes.

8. Sales and territorial restrictions for service licensees.

Licensing agreements can differ depending on market conditions in other jurisdictions and potential licensees. These agreements are important to mitigate conflict between licence holders.

Whether a service provider patents their service, or plans to operate under the open source philosophy, it is necessary to have a complete understanding of their service, the mode of delivery, their target markets, their competition, the regulatory environment and their intellectual assets in order to make decisions about how to best protect intellectual assets and customers in target markets.

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Did you have a computer in your house 25 years ago?

Odds are, the answer to that question is no. In the years since, however, computers have become omnipresent, and our phones are rarely further than a couple of feet away from us. With so many devices connected to the internet, buying and selling goods and services online has transformed from a revolutionary new idea to an unremarkable daily occurrence.

The problem is that NAFTA, the largest regional multilateral free trade agreement, originally negotiated 25 years ago, hasn’t been updated to reflect these modern realities. So what should be done about that, and how will it affect the lives of international trade professionals and consumers?

Why is it so important to take NAFTA into the 21^st century?

On November 29, Canada 2020 hosted the NAFTA Goes Digital seminar to discuss these important questions and provide some answers.

The seminar was moderated by Heather Scoffield, Ottawa Bureau Chief for the Canadian Press.

The panelists were:

• Peter Clark, President of Grey, Clark, Shih and Associates and experienced Canadian trade advisor and commentator
• Laura Dawson, Director of the Wilson Center’s Canada Institute in Washington, DC
• Ari Giovenco, Director of Trade and International Policy for the Internet Association in Washington, DC

One of the earliest questions addressed why this digital chapter will be important for so many businesses.

“There’s been a prevailing idea that we can put a bubble around a national economy for goods, to control what goes in or out, and provide incentives or affect prices in other ways,” Dawson argued. “But now, we have a totally different digital economy without that bubble. Until this chapter is completed, we’re trying to apply old rules to a new situation that doesn’t fit them.”

Giovenco then explained that this chapter will affect any business using e-commerce that allows sales beyond domestic borders, whether they’re intentionally going after international customers or not.

“The internet is a borderless medium, so companies can go international without ever intending to do so. Since this is the case, how do you know things are going where they need and that people have the access they want? What are the rules about advertising on social media, monitoring and controlling the flow of data, copyright legislation, or customs and tariffs that can be added to products purchased through e-commerce?”

Dawson explained that most digital issues discussed in the NAFTA talks fall under one of four categories: freedom to move data across borders and prohibiting data localization, technology service provider freedoms, protecting IP (copyright, source codes), and customs facilitation and digital supply chains.

When could we start to see changes come into effect?

The prevailing consensus among the group of experts was that most of the pressing digital issues had already been addressed during the TPP negotiations. While that agreement was never put into effect, the decisions were easily transferable from the original TPP text, with small modifications to reflect the specific NATFA context as well as changes in the digital realm since those negotiations took place in 2012.

“Many of the negotiators on the digital chapter of NAFTA are the same people who had negotiated these issues in the TPP, and can essentially continue the same debate,” explained Giovenco. “There’s a lot of goodwill because everyone realizes how many companies are affected.”

Clark added that liability issues for service providers is the only major issue still without resolution, and that there should be an agreement in the near future.

Dawson countered that there are so many potential liability issues to tackle, from legal to financial and others, which may still prove a challenge for negotiators.

Despite the fact that negotiators of the digital chapter are aligned on most issues, its place within the larger NAFTA framework may delay its implementation. There are also certain topics such as service exports and finances, that need to be updated before aspects of the digital chapter can be finalized.

Who benefits most, and what may change?

One important change that may be coming, according to the panelists, is an increase to Canada’s de minimis threshold, or the value of goods Canadians can bring back into the country without paying duties. While the U.S. de minimis is set at $800, Canada’s is just $20, one of the lowest in the industrialized world.

The U.S. has advocated for Canada to increase their de minimis to at least $200, and studies have shown that Canada currently spends more to enforce this regulation than it reaps in duties.

“Canada will not want to be forced by the U.S. into giving too much,” Dawson explained. “Along with dairy access, de minimis is one area where Canada has not moved so far, but has room to do so.”

Clark agreed, and predicted it would move to somewhere between $200-300 by the end of negotiations. This would facilitate an increase in duty-free online shopping for Canadians from American websites, a popular demand from consumers across the country.

Giovenco offered that finalizing the digital chapter is crucial for many companies and would serve to foster further innovation and technological development.

“About 425,000 jobs and billions of dollars’ worth of business are affected by laws governing safe harbours for IP and copyright. Canada and the U.S. have different laws governing these issues, while Mexico has very few in place, so it’s essential to unify these laws in order to drive innovation and open the three markets to companies.”

While the U.S. or other parties may prove to be short-term winners, there was unanimous agreement that this chapter would be a win for everyone in the long-term, especially service providers and exporters in Canada, the U.S. and Mexico.

One final lingering concern is the way that major global corporations like Google or Netflix may or may not be regulated. Giovenco was most concerned with opening access, while Dawson focused on how to protect user data or prevent such companies from erasing Canadian culture.

It’s safe to say that NAFTA’s digital chapter will have a major impact on North American trade. By enacting a framework that aligns with the 21^st century realities of digital trade, and deals with major issues like liability, digital privacy and IP protection, companies will have a clear path to digital expansion and expanding their businesses across the NAFTA region.

The post NAFTA will soon have new digital trade rules – how will they affect you? appeared first on Trade Ready.

When it comes to exporting services, even the smallest of details can make a major difference. For those businesses willing to put in the time and effort to customize some of these details for global customers, the benefits can lead to huge returns in the long run.

With this in mind, here’s some advice from the case studies from the FITTskills Products and Services for a Global Market course that will help lead you towards the results you want.

1. See what potential new customers want – and give it to them

You may have refined your service offerings over the course of several years in your domestic market, but once you move internationally, it’s almost like you’re starting the process over from scratch. It’s important not to waste time, money and effort promoting a feature of your service that your new customers may not want or deem important. At the same time, ask yourself if there are aspects of your service that new customers may value more than your current client base. Are there ‘easy to add’ additions your new market will love?

The only way to find out is market research. What are your potential competitors doing, and how can you learn from them?

Talk to potential customers however possible – focus groups, surveys, response forms, etc. – to get the feedback you need to customize your offerings.

The results may lead to a simple tweak, such as emphasizing one benefit seen to be more valuable than another, or something larger, like adding or subtracting from your service offerings. Whatever it may be, if it will draw new customers without overextending your time or money, it will be a worthwhile endeavour.

2. Speak their language – both literally and figuratively

As we’ve discussed in other articles, translation can be a vital step towards attracting customers. This includes your website and any other marketing or written material.

Equally important is having the staff capacity to speak the local language. Whether your service is offered in-person, remotely by individuals, or otherwise, customers will likely want to interact with a person at some point, even if only for customer service. Do you already have staff capable of speaking fluently to new customers, or will you need to make some new hires to ensure those competencies are met?

Beyond language, there are also entire fields of specialized professional vocabulary, idioms, and cultural references to consider.

Does the language in your new market already have pre-determined words to describe everything you do, or will you be required to find new terms or ways of translating?

If the latter, you may want to consult multiple translators, as well as locals, to ensure your meaning won’t be lost.

Are there any references or phrases that may not make sense to customers in your new market because of cultural differences? It can be hard enough to avoid such confusion even within the same language: after all, if a person from Liverpool tells you to “get the brolly from the boot”, do you know what they’re asking for?

If a reference to snow, cold or winter won’t make as much sense to a customer in a warmer climate, find something else that will fit. Instead of using a stock image with the New York or Toronto skyline in the background, find one with local landmarks people will recognize, and may even see out their windows or during their commute. Once you’re in that mindset, finding other ways to tailor language and references to new customers will come easily.

3. Don’t get on the wrong side of the law

Whether you’ll have people locally on the ground or not, there’s a host of legal questions to consider. These range from privacy, anti-spam and IP laws to rental or service agreements, competition laws, labour laws and travel regulations.

If you’re big enough to have a legal team, putting them to work is a good start. If not, you may want to consult legal help to guide you through each issue.

Beyond that, speaking with other companies who have successfully entered that market or with trade advisors who assist companies with market entry issues on a regular basis are also productive approaches.

When in doubt, it’s often best to err on the side of caution and speak to a lawyer or government official to see if any changes may need to be made.

4. You won’t know how much you love it until it’s gone

Think about the last time you had a free trial for something – maybe it was Netflix, a gym membership, a new software or an extra feature to a service. Did you let it go when the free trial ended? Or did you pay to keep it?

If you’re in the latter camp, you’re far from alone. With that in mind, consider if that may be a strategy you can afford to try with your service exports.

While not an option for every business, giving customers a free trial can be a helpful way to introduce your offerings to them, get them used to your services, and reveal how beneficial they can be to their everyday lives.

Once they have access to a new service, it’s common for people to pay to keep what they already have, rather than allowing them to end.

The trick is to time the free trial to maximize your ROI – run it too long, and customers will become accustomed to not having to pay for your service, and then value it accordingly. The end of the trial then feels more like a price increase, and many customers will balk at paying for it. If you don’t run it long enough, customers may not be adequately attached to your service to pay for it. A 30-day trial is common, but it’s up to you to find that happy balance.

If you already have one service in a market and want to introduce another, bundling your new service for free with the existing one for a limited time can be an effective variant on that strategy. This strategy is often successful because you are offering a new service to customers who already have an established relationship with your company, and are therefore more likely to have an interest in your new offering.

Go the extra mile to make your customers happy

Any steps that can be taken to customize your service export offerings for international markets could have a major impact. When customers see what they want presented in a way they’re familiar with, they’ll be more likely to warm up to your brand and take the next step in their customer journey. Before too long, those little changes will add up to big results, and you’ll be glad you took the time to make them!

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It’s not always easy to protect intellectual property

Failure to consider intellectual property (IP) issues can result in large or fatal losses when pursuing international markets. The consequences of being unprepared should not be underestimated—setting up joint ventures, distribution networks and other strategic alliances represents a significant undertaking when protecting one’s IP.

Yet protection from potential partners and in-country representatives provides no safeguard from the entire realm of pirates, counterfeiters and other dubious characters that have made it their business to profit at someone else’s expense.

It is a phenomenon that goes far beyond losses for right-owners or individual companies but extends to the well-being and survival of entire sectors and national economies.

Much is said about pirated music, TV shows and movies, but the problem of counterfeiting and piracy extends to, for instance, aircraft parts, fashion, food, pesticides and medicines, just to mention a few.

The information technology sector is particularly vulnerable to this problem. Indeed, according to the Business Software Alliance, more than half of the world’s personal computer users—57 percent—admit they pirate software (which includes 31 percent who say they do it “all of the time” or “most of the time”). These findings are from a survey of approximately 15,000 computer users in 33 countries which make up 82 percent of the global PC market.

Global traders need to invest time and resources into protecting intellectual property. One option is to seek protection in individual countries separately by applying directly to national industrial/intellectual property offices. Each application may have to be translated into a prescribed language, which is usually the national language.

National applications fees need to be paid, and it may be necessary to engage an IP agent or lawyer to ensure the application meets national requirements. Some countries have established regional agreements for obtaining IP protection for an entire region with a single application.

Examples of regional IP offices include the European Patent Office, the Office for Harmonization in the International Market and the Eurasian Patent Office.

For more information on protection of intellectual property, refer to the World Intellectual Property Organization (WIPO).

When protecting intellectual property extends too far

Although the theft of intellectual property represents a real problem in some sectors (e.g. music, motion pictures, software, etc.), the extension of protecting intellectual property rights into other important sectors, such as food and medicine, has become a highly controversial issue.

The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) negotiated in the 1986–94 Uruguay Round, introduced intellectual property rules into the multilateral trading system for the first time that require member nations to respect intellectual property rules. While it may sound straightforward, this rule set is quickly creating ethical challenges that are threatening too many less developed nations.

For example, it is argued that some countries, such as the United States, issue patents too quickly without much research on whether or not the invention is truly novel (i.e. if it is really the first instance of this idea).

In effect, if a patent that has been issued is challenged, it is left to the courts to decide whether or not the patent should have been issued in the first place.

This led to a bizarre situation a few years ago where the United States Patent and Trademark Office (USPTO) granted a Texas-based company a series of patents on Basmati rice (i.e. strains of rice that have been grown in India and Pakistan for centuries). Eventually, after a lengthy series of challenges, most often these patents were revoked, but the implications of a system that focuses on protecting intellectual property rights on food are considered too ominous for many.

Indeed, as higher yielding cereal crops are being created through genetic modifications, intellectual property claims are being made on the very foundations of sustenance in many countries. Lower-yielding strains of plant are effectively rendered uncompetitive, and small farmers are being pushed out of business or are forced to adopt crop strains that are regulated by the monopolistic structures inherent to patented products.

Farmers are then unable to save seed from one year to the next (an age-old practice), leading to extreme vulnerability from a food-security standpoint (i.e. in hard times, farmers may not be able to afford seed).

Medicine another area of concern in IP cases

Similarly, in the area of medicine, multinational companies have been aggressively identifying the active ingredients in indigenous species of plants worldwide (in particular, those known for their healing potential) and filing patent claims on the chemical structures (or analogues of their chemical structures) in these plants to secure monopolistic rights for the resulting medicines. It has been argued that this is a form of unwarranted bio-piracy that capitalizes on public knowledge and the lack of technical sophistication in many countries.

For example, a patent claim was granted a few years ago to the University of Mississippi Medical Center for the use of turmeric, an Indian spice, for wound healing (U.S. Patent Number 5,401,504). This was extraordinary because turmeric has been commonly used for this purpose in India for centuries.

However, under U.S. law, it is necessary to find adequate evidence (i.e. printed or published information) that can establish precedence before a patent can be revoked. Fortunately, in this case, an adequate number of references were found, and when challenged, the USPTO revoked the patent.

However, in many countries where literacy rates are low, such evidence could be difficult to locate. And again, the rights are first asserted, and then those who are potentially harmed by those rights must fight to nullify the claim. Given the costs and complexity of litigation and the time involved in undertaking such a challenge, the uniform application of these rights across national boundaries creates a situation that leaves the most impoverished nations at an extreme disadvantage.

Accordingly, those engaged in international trade need to understand the nuances of these situations to ensure that corporate claims on intellectual property are not impinging on well-established rights.

The post Protecting intellectual property: the good, the bad and the ugly appeared first on Trade Ready.

3D Printing is a manufacturing process used to create a three-dimensional object by producing successive layers of material under computer control from a digital 3D model.

This still-developing technology has endless applications that are still being explored in sectors such as the auto industry, health care, manufacturing, construction, robotics, education, and modern art. Many have argued that 3D Printing technology and the greater category of replicator technology is ushering in a fourth industrial revolution.

We asked our panel of supply chain experts how this new technology is already revolutionizing the way products are manufactured, moved and sourced, and what they see for the future of this fascinating industry.

Moderator: Audrey Ross (@tresAudrey), Logistics & Customs Specialist at Orchard International Inc., based out of Toronto, ON.

Panelists: 

Dr. Steve Brady (@SCMProfessor), CEO and Founder of Supply Chain Innovations Today, based out of Williamsport, PA.

Sarah Barnes, CITP|FIBP (@ICECORPlog), Director of Marketing & Strategic Sales at ICECORP Logistics, based out of Ottawa, ON.

Denise Montrose (@SmallWorldLLC), Managing Director for logistics and supply chain recruiting firm Small World Recruiting, based in Cleveland, OH.

Who is using 3D technology and printing right now?

A1 defense. Auto industry. Aviation. It’s really everywhere. #tradeelite

— Steve (@SCMProfessor) September 8, 2016

@tresAudrey @FITTNews who isn’t? My favourite is @aspectbiosys in @UBC who are printing human lung tissue. Used for drug testing #tradeelite

— Chris Begley (@BegleyChris) September 8, 2016

What industries would you want to see use 3D Printing who are not currently doing so?

A2 honestly I am not sure who isn’t. Historians are. Food is. The real question isn’t adoption in industry but speed and scope #tradeelite

— Steve (@SCMProfessor) September 8, 2016

We all think 3D technology is the best thing since sliced bread, but is there any downside to it?

Q3 environmental concerns due to energy consumption to run the printers & the dependecy on plastic & then resp of manufacturers #TradeElite

— ICECORP Logistics (@icecorplog) September 8, 2016

How is 3D Printing technology affecting operations? What processes and products are we going to shed?

A4 rapid prototyping. Localized printing could transform 3PL and shipping. Renewed “local” or reshoring. #TradeElite

— Steve (@SCMProfessor) September 8, 2016

Will this technology lead us to lose our appreciation for handcrafted goods in favour of speed and convenience?

A5 it is just another form of “handcrafted” goods, there r still ideas & design behind the products printed 3D #TradeElite #changeofmindset

— ICECORP Logistics (@icecorplog) September 8, 2016

A5 I don’t think we will ever lose our appreciation for handcrafted goods. Still appreciated in the world of mass-production #tradeelite

— Pam Hyatt (@lyricsbypam) September 8, 2016

With all this innovation and customization going on, how will intellectual property rights exist?

A6. I think as w/ all new tech, Governments & regulators are struggling to keep up! #TradeElite

— audrey ross (@tresAudrey) September 8, 2016

3D printing has been called the third industrial revolution, staggering numbers on infograph: https://t.co/Xh7GVI2zQ8 #TradeElite #3D

— ICECORP Logistics (@icecorplog) September 8, 2016

Be honest, is the profitability of 3D Printing going to change your career path or business strategy?

its going to be everywhere, forecasters think 3D printing will show revenues of 21B by 2020 #TradeElite #3Dprinting

— ICECORP Logistics (@icecorplog) September 8, 2016

A6. If Law students are looking to the future, degrees in technology #IP & #patents are going to be the ones to get! #TradeElite

— audrey ross (@tresAudrey) September 8, 2016

@SCMProfessor Good point on workforce as it one of the fastest growing segments for hiring in our industry #tradeelite

— Small World (@SmallWorldLLC) September 8, 2016

Read the rest of the chat and follow future discussions by following the #TradeElite hashtag.

Stay tuned for the next #TradeElite chat, coming up Thursday, October 13 at 2:30-3:30PM ET.

The post Is 3D Printing revolutionizing the supply chain industry? appeared first on Trade Ready.

As Canadian businesses increasingly enter new international markets, effective intellectual property protection should become a top priority.

IP is often a company’s most valuable asset – it can strengthen your position in export markets and increase enterprise value. As such, properly protecting those assets prior to foreign market entry is crucial.

Don’t wait until you are faced with a possible issue before thinking about protecting your IP rights. Be proactive and plan ahead!

Failing to properly research and understand IP rules and regulations in the markets where you conduct business could expose you to unnecessary costs and risks that may ultimately have a detrimental impact on your bottom line.

IP rights are territorial

One of the most important things for businesses to know about IP in international markets is that rights protection is not universal.  One of the most common mistakes entrepreneurs make is assuming that their registered intellectual property rights in Canada protect those same rights in other countries.

Registration of your IP rights in a particular country will typically only grant you protection within those national borders. Therefore, national IP offices can only grant protection for their respective national jurisdictions.

For instance, if you register a patent in Canada, your patent rights will only be protected in Canada. If you are operating in multiple jurisdictions, failure to properly register your IP beyond Canada’s borders could be a costly mistake.

So, how do you protect your trademarks, patents, designs and trade secrets in multiple international markets?

Typically, there are two main options: multiple individual national applications; and streamlined international applications.

1. National Applications – This route requires the applicant to seek IP protection in each individual country in which they plan to conduct business, according to each country’s domestic laws and regulations, by applying directly to the respective national Industrial/Intellectual Property Offices.

This route is often quite lengthy and can become extremely costly. It requires payment of application fees for each individual country, translation of application documents into the requisite language, and often an obligation to hire an IP agent to submit applications.

2. International Applications- There are international organizations, such as the World Intellectual Property Organization (WIPO) that allow for simultaneous IP rights registration in multiple foreign markets.

The international application route streamlines the process of applying for IP protection in multiple countries. In this case an applicant only needs to file one application, in one language, accompanied by the payment of a single application fee.

It’s always a good idea to have a quick look at whether the foreign market you will be conducting business in is part of any international conventions or agreements with your home country that would allow for a streamlined application process to avoid having to register individually in every country.

Tips to help you protect your IP internationally and avoid common pitfalls:

1. Do your homework. Make sure you know about the basic IP rights legal framework in your target markets and identify any potential trade agreements or conventions that would allow for multijurisdictional protection of those rights.

2. Make sure you know the value of your IP rights by conducting an IP audit. Intellectual property is often undervalued and the opportunities it creates for future profit, such as generation of income through licensing or sale, is often underestimated.

3. Develop a tailored IP strategy for your business with policies and procedures to address how your rights are protected and dealt with in international markets.

4. Make sure you search IP databases in your target markets to avoid infringement or potential conflicts with existing rights holders in that jurisdiction.

5. Register your IP – either in each individual jurisdiction where you will conduct business, or through multijurisdictional applications under WIPO or conventions and trade agreements. It is important to file applications and begin the registration procedures as early in the process as possible.

6. Monitor the market on an ongoing basis to promote early detection of any IP infringement.

Complete IP protection for your business on an international scale can often seem to be a daunting task. Taking the time to conduct proper due diligence and consult with experts, when necessary, can help you avoid common pitfalls, costly mistakes and oversights.

Take advantage of the great online resources available, such as WIPO and make sure to have a strategy in place that deals specifically with your business IP.

The post Is your IP vulnerable? How to protect your company’s rights in multiple international markets appeared first on Trade Ready.

Facing a global economic slump and a sharply devaluating loonie, the government of Canada has strategically turned its attention on growing international markets with the goal of tapping into the economic benefits of global trade.

Prime Minister Justin Trudeau has demonstrated his desire to strengthen international trade ties by planning a major trade mission to China and India.

He has also invited former Australian Prime Minister Kevin Rudd into discussions with senior Canadian business leaders to seek a free trade deal with China, similar to that negotiated by Australia.

Despite the fact that there are currently no free trade negotiations between China and Canada, both countries have demonstrated a willingness to strengthen their trade relationships and promote foreign investments.

According to Sylvain Charbonneau, CITP®|FIBP®, an international trade professional with over 15 years of experience and an instructor at Ashton College in Vancouver, there are two sides to this discussion. He noted:

A Canada-China free-trade agreement should be beneficial for Canadians, but it could also bring challenges and risks of negative impacts in some areas.

This article explores the primary issues with regard to the establishment of free trade between the two countries.

Canada-China trade presents major challenges

There are several things to consider when it comes to trading with China. International trade agreements create ties of influence between the countries that can extend beyond import-export affairs. The Chinese government has different values and priorities when it comes to the issues of law, politics and human rights, amongst others.

Moreover increasing competition for Canadian companies and economic pressures have international trade experts concerned.

The most pressing challenges can be outlined as being:

China’s human rights record: It is hard to deny the fact that China has a well-known history of human rights violation and systematic repression of certain minority groups. One of the biggest concerns about opening a free trade agreement with China is whether Canadian export products might become involved in oppressive situations. Of course, we are not talking about an arms trade, but this is an important consideration nonetheless.

Intellectual property protection: Canada values the protection of intellectual property for owners, producers and creators of various products, goods and services. Reported cases of intellectual property violations in China, and the possibility of forged products circulating in the market, have been raised as another point of conflict.

Economic incompatibility: Ron Austin, an instructor in the International Trade department at Ashton College, points to the difficulty of aligning the two economic systems of both countries.

Trying to integrate two economies with such different economic conditions – which is what free trade agreements essentially accomplish – can be challenging.

“If we look at the European Union, for example, we see countries like Greece or Italy clashing with Germany and Sweden; countries which have greater capital and higher taxes. We would not want that to happen in a Canada-China trade relationship.”

Competition: Charbonneau points to concerns over competition from Chinese companies, noting that an increase here “could cause difficulties for many Canadian businesses if they can’t continue to innovate on an ongoing basis. This could also have an impact on the employment landscape in Canada”.

Trade with China could have huge positive impact

There is certainly another side to this story. A strong economic (and even political) relationship between Canada and China could bring real opportunities for Canadians. Most predictions foresee great benefits for Canadian exports as a result of a potential Canada-China free trade agreement.

Among the key advantages are the following:

Economic benefits: Even though China’s economy is slowing, its purchasing power cannot be ignored. There are several key areas in which Canada could diversify in China and increase exports.

According to Charbonneau:

Trade with China could represent great business opportunities for Canadian exporters of consumer products, equipment and machineries – especially with its growing middle class generating an increasing demand for commercial goods.

“The agriculture industry should see an increase in demand for such products as meat, canola, fish and seafood. The trade deal could also be favourable for the forestry industry, metals and minerals”.

Bringing Canadian services to China: The rapid rise of the Chinese middle class has created opportunities for Canada, from the possibility of offering pension funds and insurance in China, to the expansion of Canada’s infrastructure sector and services.

Charbonneau has pointed out engineering, financial services, information technologies and architecture as the key industries to benefit from the export of services. There is even a potential to expand Canada’s influence in the areas of green technology and natural resources.

Improving the Canada-China relationship: According to Trudeau, cooperation with China could bring benefits to both countries. Strengthening Canada-China relationships could go beyond economic ties, leading to political connections (an important tie, given China’s growing influence) and cultural exchange, including travel and education.

So what happens next?

Although concerns and hesitations about establishing free trade between Canada and China certainly exist, the general consensus is that the benefits outweigh the challenges. However, this does not mean those concerns should be disregarded.

Austin states:

I believe the key is to introduce trade agreements that would reinforce environmental protection and positive working conditions of the cooperating countries.

Indeed, careful negotiation is needed to ensure that any economic benefits are also aligned with Canada’s political and humanistic objectives.

Although concerns and hesitations about establishing free trade between Canada and China certainly exist, the general consensus is that the benefits outweigh the challenges.

However, this does not mean those concerns should be disregarded.

“I believe the key is to introduce trade agreements that would reinforce the environmental protection and positive working conditions of the cooperating countries,” states Austin.

Certainly careful agreements have to be established to ensure that economic benefits are also aligned with Canada’s political and humanistic objectives.

Do you think it’s a good idea for Canada to pursue a stronger trading relationship with China? Do the challenges in human rights and IP present too much risk to Canadian trade?

The post Do the rewards outweigh the risks when it comes to trade with China? appeared first on Trade Ready.