A good internationalisation strategy should always embed a thorough evaluation and knowledge of IP Law.
Protecting intellectual property (IP) and being aware of IP Law is crucial for SMEs aiming to expand beyond domestic borders.
IP rights—including patents, trademarks, copyrights, and trade secrets—safeguard the innovations and unique brand identities that set SMEs apart from competitors.
As SMEs navigate international markets, IP becomes a key strategic asset that helps mitigate risks like imitation and counterfeiting, while strengthening brand credibility and consumer trust.
This article explores why and how SMEs should approach IP law as a cornerstone of their internationalisation strategy. This article is taken from our latest report “IP Law: A Global Perspective”
Understanding the Basics of IP Protection
To successfully internationalise, SMEs must have a firm grasp of the IP protections available and the international frameworks supporting them.
Key types of IP include:
- Patents: Protect inventions, granting exclusive rights to produce or sell an innovative product.
- Trademarks: Protect brand names, logos, or symbols associated with the company.
- Copyrights: Protect creative works like software, literature, or music.
- Trade Secrets: Protect proprietary information, like formulas or processes, through confidentiality measures.
Each form of IP offers unique protections, and their strength can vary by country. International IP agreements, such as the World Trade Organization’s TRIPS Agreement, set minimum standards for IP protection, and treaties like the Patent Cooperation Treaty (PCT) and the Madrid Protocol allow businesses to simplify and extend IP filings across multiple jurisdictions.
However, local adaptations of these frameworks mean that SMEs must understand domestic and international laws to secure their IP effectively.
IP as a Reputation and Brand Management Tool in International Markets
Expanding into new markets can be risky if IP isn’t well-protected. IP rights play an essential role in reputation management, giving SMEs a reliable way to safeguard their brand’s integrity and signal trustworthiness to consumers and investors.
- Building Brand Trust: Registering trademarks, patents, and copyrights helps convey the quality and authenticity of a product to new markets, where consumers may be unfamiliar with the brand. Having IP protections in place reassures customers of the brand’s legitimacy and commitment to quality.
- Investor and Partner Confidence: IP rights enhance a company’s appeal to potential investors and partners by underscoring the business’s commitment to long-term growth and security. Registered IPs can also signal to investors that the business is prepared to handle competitive threats like counterfeiting and infringement, which can otherwise harm reputation and market share.
Challenges and Strategies for SMEs Managing IP Internationally
Navigating IP management on a global scale presents unique challenges for SMEs. The complexity and cost of filing for IP protection in each country can be significant, especially for smaller businesses.
Some common obstacles and effective strategies for overcoming them include:
- Legal and Financial Barriers: Filing for IP in multiple jurisdictions can be costly and time-consuming. Additionally, the unique legal landscapes of each country can complicate enforcement. SMEs can mitigate these risks by prioritising protection in key markets and seeking support from international IP protection organisations like WIPO (World Intellectual Property Organization). At Northstar, we can do this for you, having access to legal structures that may be difficult and costly for SMEs to invest in.
- Tactical IP Management:
- Licensing Agreements: Developing robust licensing agreements allows SMEs to retain control over their IP in international markets, especially in industries where partnerships are crucial for distribution or manufacturing.
- Conducting IP Audits: Conducting IP audits before entering a new market helps SMEs identify what assets require protection and where. This includes assessing whether trademarks, copyrights, or patents need to be registered in the target market and evaluating the local enforcement landscape. With our network of experts and partners, we can undertake an IP audit in over 25 countries.
Protecting IP Rights Against Counterfeiting and Infringement
Entering new markets exposes SMEs to risks like counterfeiting, which can erode both revenue and reputation. Protecting against such risks requires a proactive IP enforcement strategy.
- Counterfeiting Risks: Counterfeit goods, often sold online, can damage a brand’s reputation by associating it with lower-quality, imitation products. SMEs should monitor for potential infringement on popular e-commerce platforms and consider using advanced tracking tools to identify counterfeit goods more effectively.
- Enforcement Mechanisms: SMEs have various international enforcement options, including filing complaints with digital marketplaces, partnering with local authorities, and consulting with legal experts on effective IP monitoring. When possible, SMEs should take swift legal action to remove counterfeit products and protect their brand.
Leveraging International IP Systems for Cost-Effective Protection
For SMEs with limited resources, international IP systems like the Madrid Protocol and the PCT offer valuable options for managing IP rights in multiple jurisdictions.
- Using the Madrid System for Trademarks: The Madrid Protocol allows SMEs to register a single trademark across multiple countries with a single application, simplifying the protection process and reducing the cost of securing trademarks in each new market.
- Global Patent Protection with the PCT: The Patent Cooperation Treaty (PCT) is a useful resource for SMEs pursuing patents in international markets. The PCT provides a streamlined filing process, allowing companies to extend the period in which they decide on specific countries for patent protection. This system gives SMEs more time to evaluate which markets are worth protecting based on business goals and budget constraints.
- Regional Agreements for IP Coverage: Regional agreements like the European Union Trade Mark (EUTM) and the European Patent Convention (EPC) offer streamlined IP protections across multiple countries in Europe, reducing the administrative burden and enhancing protection across the entire EU.
Digital Transformation and IP for SMEs Expanding Globally
As more SMEs embrace digital channels to reach customers worldwide, protecting IP in the digital space has become essential.
- E-Commerce and Online IP Management: The rise of e-commerce requires SMEs to register digital trademarks and copyrights, ensuring consistency in brand identity across platforms. This includes protecting domain names and logos from unauthorized use online, particularly on widely-used platforms like Amazon, Alibaba, and Shopify.
- IP for Emerging Technologies: For tech-focused SMEs, managing IP for digital innovations like software or AI tools presents new challenges. As many digital innovations are highly replicable, securing both copyright and patent protection early can prevent imitation in fast-evolving sectors. SMEs should also be aware of evolving IP laws that pertain to digital products and software patents, which can vary significantly across countries.
Building an IP-driven International Growth Strategy
Intellectual property protection is an essential component of a successful internationalisation strategy for SMEs. By prioritising IP from the outset, SMEs can protect their unique assets, build a strong global reputation, and enhance the brand’s appeal in new markets.
NorthStar can support you all the way and give you access to an interconnected global market, maximising your internationalisation efforts.
We are well aware that intellectual property is more than just a legal formality; it is a strategic asset that can drive international growth, inspire customer trust, and secure lasting competitive advantages for SMEs.
Discover how we can help your internationalisation efforts and get in touch today!
