Various forms of intellectual property (IP) holdings benefit from protection under domestic law. Businesses can protect their trademarks by registering them with the federal government. Businesses and creators can obtain copyright protection by publishing or registering original creative works. Patents offer protection for new concepts, products or processes. Each of those forms of IP protection can be invaluable for businesses operating in the United States. Businesses may also need to consider international IP matters given the global marketplace for ideas and products.
When a brand or original work gains traction abroad, international licensing agreements may become necessary. Licensing agreements allow one party to use the intellectual property of another business. The complications outlined below are important considerations when establishing international licensing agreements.
The likelihood of violations
A company that initially licenses IP may later engage in significant IP violations. For example, some parties may attempt to exploit licensed IP by reproducing a particular product or duplicating a production process without authorization. To prevent these IP violations, businesses should include penalties for violations in the initial contract and carefully monitor the other party’s business practices. Businesses must also be mindful that the party licensing their IP could later become a competitor.
Challenges with enforcement
Depending on the location of the other party, international IP contract enforcement can be relatively challenging. Numerous countries do not offer the same robust IP protection that the United States does. Ensuring that agreements are drafted to comply with the laws of both the United States and the other country is of the utmost importance to safeguard the rights of the IP holder.
The risk of reputation damage
There are many ways that an IP licensing agreement could damage the reputation of the IP holder. For example, partnering with a business that is notorious for bad behavior or cheap products could taint the brand of the IP holder. Allowing the IP to be used in other industries or for marketing certain products could alienate some of a business’s usual customer base. Conducting thorough research into not only the international consumer behavior but also the reputation and conduct of the other company is essential when licensing IP internationally.
Having proper support when handling an international intellectual property matter is essential for protecting your interests. Intellectual property matters require careful investigation and clear contracts to ensure the protection of the party that owns the IP. Reach out to the team at Wang IP Law Group, P.C. for assistance with the research and negotiation stages of any international IP licensing matter that concerns your business.