In 2010, U.S. companies exported more than $1.2 trillion worth of goods and services to every corner of the globe. For most of those companies, a strong brand represents the value behind their goods and services.
Sadly, many companies take huge risks with their brand when they export. In the process, they confuse customers and reduce their potential returns from selling to overseas markets.
By checking the list below, you can avoid eleven costly mistakes that will weaken your brand, and ultimately cost you money and customers. Don’t be among the exporters who fall prey to these:
MISTAKE # 1: Assuming that a U.S. Trademark Is Protected Everywhere
Of course you’ve registered your brand (your trademark, your logo, your tagline) with the U.S Patent and Trademark Office. That registration gives you essential legal rights to prevent others from using the goodwill that you’ve invested to create. But your U.S. trademark registration isn’t valid in other countries. If a company in another country starts using your trademark (or already uses a similar trademark), your U.S. registration is virtually useless to stop them. Instead, think ahead and register your trademark in each country where you’re doing significant business.
MISTAKE # 2: Failing to Use Contract Language to Protect Your Brand
Whenever you sign an export-related agreement, remember to protect your intellectual property assets. Include a contract clause that prohibits resellers or distributors from registering your trademark or domain names in other countries. Obligate them to transfer any related trademark rights to you. Whether or not your trademark is registered in other countries, enforcing a contract can give you extra legal protection beyond what local trademark laws provide.
MISTAKE #3: Failing to Take Advantage of ccTLDs
Everyone uses the Internet to locate businesses and products. While the most popular top-level domain name is .com, each country also has a separate “country-code” top level domain (a ccTLD). For example, Germany uses .de, Australia uses .au, and Italy uses .it. You can register your brands as ccTLDs in countries where you do business. A ccTLD tells local consumers that you’re interested in their business, and prevents cybersquatters from grabbing your brand. Plus, all of the domain names can point to your main web site.
MISTAKE #4: Assuming that Brands, Packaging, and Products are Cross-Cultural
Everyone talks about globalization, but people still differ from place to place. As a result, product names, advertising messages, and other marketing efforts can go wildly wrong when transferred to another culture. To increase your chances of success, invest in local reviews to determine if your message is offensive, insensitive, or unintentionally comic. Ideally, use a marketing professional who is a native speaker and who has current contact with the target market. Relying on your brother-in-law who was an exchange student in 1983 is asking for trouble.
MISTAKE #5: Failing to Do a Trademark Search
If someone in another country is already using a brand that’s similar to yours, they could accuse you of trademark infringement when you start selling in their country. Even if you’re not trying to steal their brand, you could confuse their customers. So before you extend your brand into other countries, hire a trademark searching firm to determine if any similar brands are already in use. Making a required change in your marketing plans could be expensive, but it could cost less than dealing with trademark litigation in a foreign court.
MISTAKE #6: Failing to Fully Protect Your Trademarks
When you register your trademark (in the U.S. and in each country where you plan to do business), consider registering both the “plain word” used in your trademark (for example, COCA COLA), and also the graphical logo form of your brand. The plain word mark gives the broadest possible protection against anyone using any similar words for products or services that are similar to yours; registering the graphical form of your brand can provide extra protection for times when someone actually intends to steal your goodwill by creating counterfeit goods.
MISTAKE #7: Trying to Do Everything Yourself
Exporting can open up new markets with huge potential for growth. You already know that taking advantage of that potential requires investment. But some exporters are loath to invest in professional help to navigate new markets, new cultures, and new regulations. Your brand may be the single most valuable asset that your company owns. But your brand can rapidly lose value if it isn’t well cared for. Don’t try to do everything yourself. Find experienced help to guide you through the steps to protect your brand overseas.
MISTAKE #8: Using an Attorney Who Is Not Familiar with Trademark Law
When looking for professional guidance on international branding issues, some exporters assume that their business law firm can handle international trademark registrations, domain name issues, and related matters. If you use a large law firm that has an experienced trademark department, that’s certainly true. But don’t assume that any good corporate lawyer can handle foreign trademark registrations. That’s like asking your employment lawyer to handle an offering of corporate bonds. It’s a bad idea. You may end up weakening your brand or make it impossible to defeat a trademark infringement case overseas.
The same applies to patent lawyers. Patents are focused on your technology. Trademarks are focused on your brands and how your customers perceive you. Many attorneys have experience with both patents and trademarks. Make sure yours has the right experience to help you.
MISTAKE #9: Failing to Take Advantage of Trademark Treaties
There are two treaties that give you extra protection when you register your trademark outside the U.S.
The Paris Convention lets you wait up to six months after you file a trademark application in the U.S. before you file for the same trademark in another country, but you still get the same “priority date” as your U.S. application. That means if someone in another country heard about your business and tried to register your trademark, but you file during that special 6-month window, you still win.
The Madrid Protocol lets you file trademark applications in many countries at a much lower cost than traditional methods using foreign attorneys. There are some trade-offs, and not every trademark is suited for the Madrid Protocol. An experienced trademark lawyer can advise you on your specific situation.
MISTAKE #10: Failing to Protect Your Brand at the Border
Once you have a U.S. registered trademark, the U.S. Customs Service will help you protect your brand by confiscating goods that infringe your trademark as they try to enter the U.S. The Customs Service can keep out gray-market goods as well as counterfeits produced overseas.
To take advantage of this benefit, you must inform the U.S. Customs Service that you have a registered trademark. You’ll also want to let them know the details of suspected infringing products, since they don’t automatically check every package that comes into the country.
MISTAKE #11: Failing to Protect Your Brand After Your Trademark is Registered
A registered trademark gives you certain legal rights. But the best way to protect your brand is not to take people to court. The best way is to pro-actively monitor for activity that is objectionable, and try to stop it before it gets a foothold in your market.
You can pay a small fee for a “watch service” that notifies you or your attorney anytime a trademark application is filed that is similar to your brand. For example, if you registered the trademark, GLOBAL CHOICE for a research service, a watch service can notify you whenever a new trademark application anywhere in the world includes the word GLOBAL or the word CHOICE for services similar to yours.
By using a watch service, you catch potential problems early, when they may be much easier to resolve.