12.26.07
Posted in Intellectual Property at 11:25 pm by Administrator
So now you have your product patented, trademarked and copyrighted in the countries your are doing business in,how can you enforce your rights? Here are some strategies that I’ve seen companies use:
- Hire a local person monitor the market and report on any potential violations. This could be your agent, a local attorney or a consultant. They should look at advertisements, ask for promotional and technical literature from competitors, and as appropriate drive past storefronts.
- Do your own periodic web searches on product offerings from your competitors. It’s always amazing how you can find hidden deep in a web-search. Be creative in your terminology usage and search on parts of the words (especially for your trademarks or marketing slogans) since copycats like to make it sound like the original product. Remember you can also use the translation programs to look at non-English websites (usually too literal but the translations can give you an idea if you need to look at the site further.
- If you find a potential violator, consider your options. In some cultures, a polite letter from your company can be sufficient; in others, a strongly worded letter from a law firm might be the option. If you can trust the local court system, you can ask for an injunction. (One cautionary note: Consider how your approach might look in the US. One major US film studio came down hard on a small Salvadoran producer and it was played up as David vs. Goliath in the local press.)
- If your competitor is exporting the product back to your company’s country or to a third country, you can seek to stop the product at the importing country border.
- If you’re not getting results or the cooperation from the government, bring in your Embassy. When I was in El Salvador, I intervened numerous times on behalf of US patent, trademark and copyright holders. The owner of a local franchise lost rights to the trademark but told me how he was still going to use it. After consultations with the trademark owner in the US, I asked the Salvadoran government to shut down the operation. When the operation was shut down, there was considerable press play and the Salvadoran brought suit against the Embassy and me for depriving him of his livelihood. The suit never went anywhere and in the end, the US intervention stopped the trademark infringement.
Part 3 will deal with strategies for enforcement in countries where intellectual property protection is weak or non-existent.
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12.20.07
Posted in Negotiating at 5:04 am by Administrator
I was watching a rerun of the Daily Show this evening (still suffering from the Writer’s strike) and Jon Stewart itnerviewed Presidential Hopeful and former Secretary of Energy Governor Bill Richardson. Richardson has been through some of the toughest US diplomatic negotiations, especially dealing with the North Koreans.
Richardson told of his meeting with Sadam Hussein to free two US prisoners in Iraq. Richardson started off the meeting in a relaxed manned and crossed his legs, inadvertently showing Sadam the soles of his feet — a sign of insult in the Arab world and much of the Muslim world. Sadam immediately stood up and left the room. The Foreign Minister explained what had happened and Richardson asked for the meeting to continue. Richardson didn’t apologize but he did watch his feet after that. Richardson was successful in securing the release of the US prisoners.
That incident again highlights the need to be sensitive to cultural taboos. It also highlights the need to be flexible. If you inadvertently make a faux pas, move past it.
Have you any incidents when you inadvertently insulted your host?
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12.18.07
Posted in Cross Cultural, Marketing at 10:46 pm by Administrator
One mistake that is frequently made is using the same language marketing materials for different countries. Not only are there questions of differing tastes (colors, presentation styles, etc) that differ from country to country, but there are also differences in language usage. Consider the variations in English language usage from the UK to the US to Australia to India. Some words appear comical used in different contexts– “bloody” in the US refers only to blood whereas in the UK it may be mildly impolite in some circles and in Australia a word for emphasis with no particular meaning. As an Australian diplomat remarked to me “Just because we’re both speaking English, doesn’t mean we are speaking the same language.”
The same applies in other languages. Spanish usage from Mexico to Colombia to Argentina to Spain has many colloquial differences. Words that are quite acceptable in Mexico or Spain may be swear words in Argentina. There are also differences in style. When I was in Spain, Chile and El Salvador,we would get texts of demarches (formal documents requesting support for US positions) that were translated in Washington generally by linguists from Central America. I routinely asked my locally hired staff to review the document for accuracy and we often made changes to the text to reflect local style and vocabulary.
My tip for the day: Resist the temptation to use the same marketing materials from country to country. If you are making a serious foray into the market, spend the time to have a professional from the target market look at your materials, AND listen to their suggestions.
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12.12.07
Posted in Economic Analysis, Exchange Rates at 6:36 pm by Administrator
I recommend you read Steven Pearlstein’s article in today’s Washington Post. It reiterates a point in one of my earlier blogs that we are exporting the inflationary pressures of the excess demand from the large US deficit. That is sustainable only as long as China is willing to keep an fixed exchange rate and maintain sterilization operations to limit domestic Chinese inflationary pressures. As I noted last week, many analysts are expecting contractionary policies after the Olympics. Pearlstein put is very well in the on-line discussion this morning in the Post:
“Q: how long can nations such as China tie their currencies to the dollar? It seems to me that at some point, that strategy will backfire.
Steven Pearlstein: Well, there is a limit on how long they can do it, as we now see. Without getting into the details, let’s just say that all the market turmoil you are seeing is an indirect effect of their currency manipulation all these years with the currency of a large trading partner. It causes all sorts of other distortions in market economies and financial markets, and those distortions eventually cause problems that come home to roost. These may look like our problems at the moment, not China’s. But if you look more closely, you see that China’s economy is overheating, inflation is very high and rising, there are bubbles in its real estate market and its stock market, and things are looking a bit dicey for them as well. Because they are still a controlled economy, they think they can handle this and let the steam out gradually — they raised bank capital reserve requirements to 14.5 percent the other day, which is very very high in an attempt to slow growth in credit and money. But markets have a funny way of correcting indirectly what they are not allowed to correct directly. All of which is a longwinded way of saying that the peg can’t last much longer.”
What do you think? What would be the impacts on your business strategy?
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12.11.07
Posted in Intellectual Property at 11:54 pm by Administrator
When I first came out of university and started working for the Office of the Special Trade Representative (USTR), intellectual property was a fairly mundane issue. There was one person working on it at USTR and mostly we relied on the US Patent Office attorneys for advice. It was a given that patent protection in the developing world was a lost cause and there were only technical disputes with Europe and Japan. The Tokyo round made some small improvements but it was only with the GATT becoming the World Trade Organization that a framework was established (the so-called TRIPS agreement).
Where are we now? Patent protection is required among the WTO signatories and local laws should conform to TRIPS. The signatory countries also have to provide for enforcement mechanisms (for information on TRIPS see: http://www.wto.org/english/tratop_e/trips_e/trips_e.htm
As is frequently the case, theory and application often diverge widely. Most any company will need an intellectual property strategy as part of its international marketing program. It’s not only patents, but also copyrights, trademarks and trade secrets that need to be protected. This will be the first of a several part analysis of strategies.
Let’s focus today on patents. The first step is getting the patent registered in the country of origin. In the US context, that means the US Patent and Trademark Office (www.uspto.gov). While some experienced inventors register themselves, most companies use an attorney specialized in the field. For those of you living in California, you have one publicly funded free resource, the Sawyer Center in Santa Rosa (www.santarosa.edu/sbdc). The coordinator of the center, Steve Schneider (sschneider(at)santarosa.edu) is an invaluable resource to inventors through the San Francisco Bay Area.
Once you have made the initial registration, you can apply for patents in other countries. Having a US patent does noe automatically mean it will be covered elsewhere. There is an advantage of waiting until the patent is issued because after that most countries will allow you to extend the US patent internationally in the first year. (There are always exceptions – for example the US permits genetic blueprint patents for organisms while many countries do not).
Do I need to register my product all over the world. A common strategy is to secure patent protection only in the countries in which you are selling or manufacturing. There is the loophole that someone could begin manufacturing in the unprotected country. That’s a risk you have to judge – how important is the market in the future, could the pirated material be shipped to third countries? It is precisely because of these uncertainties, you need an IP strategy in as part of the company’s overall domestic and international strategy.
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12.10.07
Posted in Cross Cultural, HR at 2:54 am by Administrator
At the German American Business Association of California (www.gaba-network.org) event this week (see previous post), the topic came up about what kept executives awake on the two continents. Gary Cole of Antares Partners pointed out a concern that I had heard about previously — the number one concern of US executives doing business with Europe is the relatively rigid system of laws around hiring and firing. The American executives hear horror stories about how it is impossible to reduce staff and fire underperforming employees. They hear stories about workers councils and panic that management would lost control to the workers.
My experience from working with US companies for nine years in Europe is that smart executives learn not only how to live with regulations but how to use them to their advantage. I haven’t come across one US company that ceased European operations because of the HR environment. To be sure, companies have shut down high-cost operations of which compensation was a major factor. Some of the most profitable operations in Europe are in high-regulation countries like France or Germany. A senior executive at Caterpillar (I spent a year on exchange from the State Department to Caterpillar’s finance company) remarked to me that his best overseas operation was in France. I asked him about the common perceptions of the employment laws and he replied that once you accept the framework, he found that the employees at the French subsidiary were hardworking and creative.
The takeaway from this discussion is that the key is accepting the system and finding good local employees who can carry your business forward. You have to understand the cross-cultural dimension and identify how you can motivate the employees in the other culture.
I invite you to post and tell about your experiences.
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12.05.07
Posted in Economic Analysis, Exchange Rates, Strategies at 8:58 pm by Administrator
At the annual Business Climate Finance Outlook of the German American Business Association of California (www.gaba-network.org), Robert Prion of Citi Private Bank noted that his bank had lowered world economic growth estimates because of the US home mortgage crisis and because of an expected slowdown in China after the Olympics.
In China, the economy remains overheated, in part due to the dollar-pegged exchange rate. Because it is a non-reserve currency and is running a huge trade surplus, the Bank of China has had to undertake major sterilization operations to stop the money supply blowing up because of potential injections of dollars into the Chinese economy. The Chinese authorities have avoided taken the necessary adjustments (allowing the Yuan Renminbi to appreciate or significantly raising interest rates). (It should be noted that the government consolidated all credit decisions last week — a good first step.) However it appears that Beijing wants to wait until after Olympics to apply the brakes.
This is very reminiscent of what happened in Spain during their Olympic year of 1992. I was the economic attaché at the US Embassy during this period. The Spanish had pegged the peseta to the Deutsch Mark in the 1980’s and pumped up the economy with a major public works program to build infrastructure for the Olympics. (Spain was one of the fastest growing countries in the world in the 1980’s.) Shortly after the Olympics finished, Felipe Gonzalez took the necessary corrective actions, which led to his losing power to Aznar.
So in terms of strategy, my advice would to be to plan for a weaker Chinese market and an appreciation of the Renminbi.
What are your thoughts?
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12.02.07
Posted in Clean Technology, Strategies at 6:26 pm by Administrator
My fellow board member on Clean Tech Bay, Olaf Groth (http://www.linkedin.com/in/olafgroth) sent around a provocative question about what would be the impact of higher auto fuel efficiency standards. One point that he made was that he felt that despite the efforts of the auto makers to fight the standards that the efforts of the Western states would lead to the higher fuel efficiency and that in any event people will drive fewer conventionally powered cars in the future.
What would be the implications for international business?
- My guess is that US car makers would be the least agile in responding to shifting market demand and that the Japanese would be come out best. The German auto makers have not responded much to higher fuel efficiency but have shown a better track record of accomodating market demands.
- With more non-conventional cars and with better fuel efficiency, oil demand will gradually drop. This will shift back again the advantage to non-oil exporting countries and allow greater consumption by consumers.
- If there are breakthroughs in electrical storage, electric cars will have a tremendous advantage – fewer parts, lighter, maybe eliminating transmissions, etc. This will eliminate the traditional barrier to entry (a expensive motor and transmission) for existing manufacturers (note each has the word motors in their company name – Ford Motors, General Motors, Toyota Motors, Bayrische Motor Werke,). With those barriers gone, we may see new entrants to the market (China, India, Google Auto? )
- For those on the venture capital side, I’d be looking for innovations in storage technology and electric motors/controls. Those won’t necessarily come from the US, but anywhere in the world.
What do you see as the implications?
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