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Welcome to the WISE newsletter, a program of
The Falcone Center for Entrepreneurship at Syracuse University

Wednesday, January 11, 2006

Intellectual Property Rights Protection for Small Businesses

This was received from the Small Business Development Center at SUNY Oswego.

Scope of the Problem
  • The World Customs Organization estimates counterfeiting accounts for 5% to 7% of global merchandise trade; this is equivalent to lost sales of as much as $512 billion in 2004.

  • In 2004, the value of counterfeit and pirated goods seized by U.S. Customs and Border Protection (CBP) increased 47% over 2003.

  • Research conducted this Spring by the U.S. Patent and Trademark Office (USPTO) indicates that only 15 percent of small businesses that do business overseas know that a U.S. patent or trademark provides protection only in the United States.

Importance for SMEs
  • Intellectual property rights (IPR) protection should be considered by all small companies – not just exporters.

  • Small and medium-sized enterprises’ (SMEs) products may be counterfeited or pirated overseas and found in the United States and other markets.

  • SMEs are particularly vulnerable because they often lack other product lines to fall back on, or the financial resources to withstand sudden, unfair competition caused by fake products.

  • Counterfeit parts can pose health and safety hazards in the finished product, and can potentially subject legitimate producers to legal liability.
  • SBA clients need to know that protecting IPR should be carefully considered as a standard and essential part of any business plan.

  • Many SMEs experience difficulty protecting their IPR abroad, including in China, as they are not aware of how to obtain and enforce rights in foreign markets. Some basic, low-cost steps SMEs should consider include:

  • Working with legal counsel to develop an overall IPR protection strategy;

  • Developing detailed IPR language for licensing and subcontracting contracts;

  • Conducting due diligence of potential foreign partners;

  • Recording their U.S.-registered trademarks and copyrights with CBP to prevent infringing imports ($190); and

  • Securing and registering patents, trademarks, and copyrights in key foreign markets, including defensively in certain countries where IPR violations are common.

Under the Administration’s Strategy Targeting Organized Piracy (STOP) initiative, the Commerce Department has established several new services specifically for SMEs, including:
  • An IPR hotline –1-866-999-HALT – and a website – StopFakes.gov – that U.S. businesses can use to learn how to protect their IPR at home and overseas or to report IPR theft.

  • IPR Toolkits for China, Korea, Mexico, Russia, and Taiwan – developed in collaboration with the State Department, the toolkits provide detailed information on the IPR protection regime and resources of each country. The toolkits are available on StopFakes.gov.

  • NEW China IPR Advisory Program – SMEs can receive a free, one-hour consultation with a volunteer attorney experienced in both IPR and the Chinese market. To request a consultation or obtain additional information regarding this program, contact Christina Heid of the American Bar Association, preferably by email at introl@staff.abanet.org, with the subject line “SME China IPR Advisory Program-Request for Assistance,” or by telephone at (202) 662-1034.

  • Business roundtables, trade risk mitigation seminars, and IPR education workshops nationwide conducted by IPR experts from the International Trade Administration and the USPTO to inform SMEs about U.S. Government resources available to them to help secure and protect their IPR.

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