Copyright and market consequences

At the recent IGI International Wallcovering Manufacturers Association held in Monte Carlo, Dids Macdonald opened the keynote session on intellectual property by outlining the scale of IP theft in the global economy. In the US, for example, companies lose between $200-$250 billion a year and roughly 750,000 jobs to date have been lost as a direct result of IP theft in one form or another. In the UK, for example, the figure is 10 billion. Nearly all industries including wall coverings are being affected, from apparel to drugs, from high-tech industrial goods to cosmetics. No sector is safe! To put this in context, approximately 7% of world trade is counterfeit and on the increase, 2/3 counterfeits are intercepted en route to EU are made in China closely followed by Russia Ukraine and Turkey. In 20 years time according to the United States Chamber of Commerce markets will be seriously eroded or lost altogether.

However despite this bleak picture, designers, manufacturers and brand owners can take a proactive approach and ensure that they protect their IP. Often it is the low cost and no cost proactive measures which have the most impact like, for example, ensuring that standard terms and conditions of sale or supply include an IP statement, having an effective document management system in place, registering designs, copyright, trade marks and patents in the countries where one’s business interests lie and ensuring that there are registrations in key territories where there are identifiable risks from IP theft. Commercial savvy must dictate that an IP strategy review is essential as a sound basis for an ongoing IP policy if companies are to succeed in meeting the IP threats head on.

Most successful businesses will be underpinned by intangible assets, its people, its know-how and and its intellectual property and these need to be translated into a monetary value so that they can become a recognisable USP and key driver in mergers, acquisitions and investment, as well as a valuation when considering an exit strategy. They also need to be valued in budget planning for cost effective product and brand protection within an Intellectual Property (IP) strategy. Organisations such as ACID provide access to this type of review to ensure that products are fully protected and exploited from concept to market reality.

Clearly in order to enforce your rights organisations need to create an IP strategy. What should that include? A market evaluation identifying the threats in each country. Having completed a swot analysis and IP Strategy Review, create a budget to support your activity. There are many companies out there who have expertise in brand watching services – if your brand is at risk market intelligence is worth its weight in gold – acting quickly and decisively is key if your brand is at risk. By registering your IP rights you can engage customs effectively in interception and by working proactively with legal partners who have a global signature it is easier to identify priority territories with a proactive plan in place. Having an enforcement strategy throughout the entire supply chain both internally and externally can communicate a strong message of deterrence. Often prevention is better than the cure!

Laws, especially IP laws differ from territory to territory so it is wise to choose IP partners who have clear objectives to provide commercial solutions to your business needs. Having first hand experience in different territories will give your organisation a competitive edge in IP awareness and by identifying the rights which apply to your organisation underpinned by a basic knowledge of what they are and how strong they are is a simple first step. Having established the priority territories both for supply and those posing threats it is essential to ensure you have the right registered rights. Investment too in creating precedent agreements which will provide an effective interplay between national and international law will prove to be a sound basis to rely on if a) you need to challenge or b) if you need to defend legal challenge.

It takes years to build up a reputation in an organisation and the name by which you are known so clearly a brand protection strategy is key. Apart from national registration, one of the most effective forms of protection is the relatively new Community Trade Mark. So once one has established national, European and key international territories it is worth while considering an ongoing trade mark policy and identifying the countries with whom your national mark will have reciprocal agreements. For example as laid down in the Berne convention and the Madrid Protocol

Again, the Registered Community Design which came out in 2003 is an effective means by which designs can be protected. In the US there is no design registration only design patents, In China, for example, you can obtain a design patent. It is a monopoly right, easily obtained, cost effective and offers protection for 25 years in 27 member states. For example if you are working with China it is important to understand the main differences. There is a dual track ie litigation and administrative enforcement. Chinese law is improving but there is a wide margin between IPR and the practicalities of enforcement. Central government is resolute whilst the more remote areas are less so. Interestingly 95% of cases are now Chinese suing Chinese so now they are recognising the IPR they create. Also they are becoming more sophisticated, they actually want the real thing and there is loss of face is prosecuted. Due diligence is key – who exactly is the potential customer, supplier or partner. Maximise protection and exploitation by control of physical aspects – documents, tooling, packaging, production overruns. Penalities too have got tougher

Having a solid corporate social responsibility policy within big business today means responding appropriately to the demands of a variety of subjects, such as environmental issues. Reluctant companies are being forced to clean up their act on many aspects of commerce and there is now also considerable pressure from originators to demand respect for intellectual property rights and for Companies to declare their policy for corporate social responsibility as a minimum.

Always ensure that your own IP policy is included and whether you are adhering to an organisational Code of Conduct (for example IGI). This not only states your own policy but raises industry standard awareness. Try to ensure that those with whom you work are aware of your policy – suppliers, employees, retailers, end users and competition. ACID is an organisation which supports Mediation versus Litigation and we advise all those who have a positive CSR on IP to recommend that mediation is the first port of call as an alternative solution to legal disputes. ACID has, in 2007, initiative its own scheme Mediate to Resolve using highly trained IP mediators. Not only is this an effective means by which IP infringement can be resolved it is also a time and cost effective means by which businesses can get on with their main activities instead of lining the pockets of lawyers!

The world is ripping off each other and so long as we look the other way we are all accomplices to an unfair business practice that, bottom line can cost livelihoods and businesses. If the wall coverings industry is relying on innovative design as a market differentiator then it owes it to those within the industry, who provide excellence in design, to support it.