Environment and Government and Technology

VOICES FROM THE INDUSTRY: What's protected in United States may not be elsewhere

November 28, 2005

Globalization

It's a buzz word and opportunity; a blessing and a curse. The shrinking global marketplace can help jump start companies that learn how to navigate the morass of regulations and potential pitfalls regarding the protection of intellectual property and personal and business information outside of the United States. But compliance with U.S. laws regarding trademark, patent, privacy and other areas does not necessarily equal compliance in other countries. Successful U.S. companies can find themselves facing uphill battles if they don't protect their inventions, information and brands, and how they use their customers' personal identifiable information elsewhere.

Privacy

When doing business, particularly in an on-line environment, companies face a number of issues regarding the collection and transfer of customer and employee personally identifiable information. At the broadest level, businesses should consider what information they collect, where they are doing business, what they do with information that is collected, and who bears the burden of complying with privacy laws, rules and regulations.

While certain rules govern the collection and use of privacy-protected information in the United States (and, perhaps not surprisingly, California's laws are some of the toughest), different rules apply in other areas (like Canada, Asia and the European Union). Some companies with global operations choose a "lowest common denominator" approach, meaning that they craft their policies to comply with the most stringent laws of the countries in which they operate. Others put the burden of compliance on the users or distributors.

Further, companies should consider whether the outsourcing of certain functions to other countries creates customer privacy issues because important competitive or personally identifiable customer information is sent outside the United States where different privacy rules apply.

Trademark

In the United States, trademark rights are based on use "in commerce." Even without a formal registration, trademark owners can protect their rights in the geographic areas in which they are the senior user of the brand name. That's not the case in other countries. It typically is a race to register the trademark with government agencies outside the United States, because they are "first to file" jurisdictions.

In high-risk jurisdictions, there even may be individuals who prey on the rights of new brand owners who have launched their products in the United States. These brand pirates file applications for those same brand names in other jurisdictions, and when the brand owner wants to do business in that particular country, they try to make a substantial profit from selling the trademark registration to its otherwise rightful owner. Early filing can avoid this negative outcome.

Technology

Technology may be granted a patent by the U.S. Patent and Trademark Office. A patent gives the patent owner exclusive rights to make, use, and sell the invention for a defined period of time (20 years from the date of application) in exchange for public disclosure of the details of the technology. Once the patent expires, the public is free to use the technology.

Other rules also can apply. For example, an invention that has a dual use (a potential national security-implicating use) may have export restrictions.

Secrecy often is the highlight to protecting new technology. Once patentable technology is disclosed to the public, the inventor has one year to file a patent application with the U.S. Patent Office. "Public disclosure" can mean a number of different things, and companies should determine whether actions they have taken could qualify as a public disclosure.

The rest of the world is not so kind, however. There are no such grace periods in countries outside of the United States. So, to obtain protection, a patent application must be on file before the invention is publicly disclosed. Without the protection of a pending patent application in those jurisdictions, the invention and technology are up for grabs.

Globalization can be an opportunity worth seizing, but success likely will come to those armed with the right tools. To take advantage of these opportunities, make sure that your company has considered the best way to protect itself.



Carter is a partner in the law firm of Baker & Daniels LLP, practicing general intellectual property law with an emphasis on trademarks, copyrights, and licensing. Views expressed here are the writer's.
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