NEWSROOM

As the nature of work has shifted from conventional and clerical to creative and technology-based, intellectual property (IP) has become more prominent. On April 26, the world commemorates World Intellectual Property Day -- which was first designated by World Intellectual Property Organization (WIPO) in 2000.

World IP Day aims to increase the general understanding of intellectual property. Today, there are still some misunderstandings regarding intellectual property, which could be detrimental for both businesses, big and small, or individual creators.

WIPO has set a theme for World Intellectual Property Day 2021, which is “IP & SMEs: Taking your ideas to market”.

Importance of IP for small business

Intellectual property is crucial for business at all scale. Not only that businesses must secure trademark for their brands or taglines, other things that distinguish one business from another might also be protected by intellectual property rights. Coca-Cola, for instance, has a trademark over the design of its curved glass bottles.

Intellectual property exists whenever someone or an organization creates something original, be it a name for your business (trademark), artwork (copyright), or new invention (patent). The failure to recognize and protect the intellectual property element in your work or business might lead to theft or legal dispute.

However, the WIPO also notes that not all creation deserves to be granted intellectual property rights. For arts, the creation has to be original. For technology, the invention has to be new, non-obvious and useful.

While copyright, patent, and trademarks are usually associated with big brands, small businesses should also understand the issues of intellectual property.

Small and medium enterprises (SMEs) generally lack awareness over the issues of intellectual property. Now that SMEs might enter foreign market thanks to international trade and the internet, the understanding over intellectual property becomes fundamental for businesses for two reasons.

First, to ensure competitiveness over others, including to prevent copycats and counterfeits. The last part is particularly relevant considering that counterfeit products often appear in digital marketplace soon after the original product gains popularity in the market. Without proper intellectual property protection, businesses cannot do anything and might even lose consumers to copycats.

Second, to make sure that the business does not violate the intellectual property rights of others. Researching the target market and competitor is a prerequisite before entering a market, especially foreign ones. Despite having secured an asset as intellectual property in origin country, a business might not be able to gain a protection over the same intellectual property asset if another business has already registered it in the target market country.

Businesses need to catalogue their intellectual property assets and protect these assets in accordance to intellectual property laws in both origin country and foreign market country. Within another scheme, business can just export the intellectual property without the product, essentially granting a license for others to use it -- for a fee. That said, businesses need to also use confidentiality agreement for such partnerships in order to secure the intellectual property.

Common intellectual property mistakes

According to WIPO, there are several intellectual property mistakes commonly made by businesses that wish to expand internationally:

1. Believing that intellectual property protection is universal, while it is actually territorial (only applied in a country or region)
2. Assuming that laws and procedures for the protection of intellectual property are the same worldwide
3. Not researching the existing market in target country, particularly whether a trademark is already registered or that there's a competitor that shares common intellectual property assets
4. Failing to secure intellectual property protection as soon as possible
5. Sharing information regarding intellectual property without a confidentiality agreement
6. Not defining issues of intellectual property ownership when outsourcing manufacturing process to foreign entities
7. Trying to gain a license in a market where such assets are not protected