Imperial guard if you want a global empire, you'll have to tackle international trademark protection

Entrepreneur, Feb, 2003 by Steven C. Bahls, Jane Easter Bahls

LAST MONTH, WE DISCUSSED STRATEGIC planning for protecting your intellectual property. This month, let's take a look at one aspect of that planning: making sure your trademark is protected in whatever countries you do business.

Your trademark is a valuable asset because that's how customers recognize your product or service. But in many countries, trademark protection belongs to the first company to register a trademark, not the first to use it.

"Companies that have been using a mark for a long time sometimes don't bother with a search until there's a problem," says attorney Kara Cenar of the intellectual property firm Welsh & Katz in Chicago. But that approach could lead into trouble. "You [might] find that some other company has rushed to the trademark office and registered your mark," she says. The company might be trying to extract payment for the legal rights to your own mark, or it may want to hitch a ride on your reputation.

Just as it is in the United States, it's important to conduct a trademark search by hiring a firm that specializes in it, then to register your mark and defend it. There's no way to search all countries simultaneously. You have to do one at a time. A U.S.-only trademark search costs $400 to $500. It comes back in a thick bound report, telling which businesses have used your trade name for which products or services, and who has trademarks similar to yours. But you'd do well to have an experienced intellectual property lawyer formulate the search in the first place, to make sure you're not missing crucial elements, and then examine the results with an expert eye. Even if a given company lets its rights to your trade name lapse, it might still have common law rights to the name in a given state. You don't want to have to stay away from that state or operate there under a different name. The lawyer's time for all this typically costs $500 to $1,500--or even more.

Now multiply that by the world's 190 jurisdictions, and imagine the cost. That's why Cenar recommends a strategic approach to global trademarks. First, she says, consider which trademarks are most important. You might have several trademarks, but you only plan to use one of them overseas in the near future.

Then decide where you want trademark protection first. Because the NAFTA treaty (North American Free Trade Agreement) makes North America one single market, first international registrations should be in Canada and Mexico. Then you'll want a Community Trademark, which covers the 15 countries of the European Union. After that, you may expand to other countries a few at a time, depending on your marketing plans. If the firm that handles your intellectual property has a relationship with a firm in that country, a few calls may be all that's needed.

Registering your business's trademark in another country doesn't necessarily give you all the rights you enjoy here at home. How your trademark is regulated depends on the laws of that country. But intellectual property law is broadly similar around the world, Cenar says. So with some strategic planning and investment in legal services, before long you can use your trademarks worldwide without unpleasant surprises.

STEVEN C BAHLS, dean of Capital University Law School in Columbus, Ohio, teaches entrepreneurship law Freelance writer JANE EASTER BAHLS specializes in business and legal topics