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WHAT’S YOUR IP STRATEGY?

 

Like many company lawyers you’re thinking about IP, but are you thinking about it in the right way?
GC meets with IP expert Toe Su Aung to discuss what legal departments should be focusing on.


L E G A L     P E R S P E C T I V E S

Intellectual property is a critical issue for every company these days, whether they’re looking at traditional IP issues like patents and copyright, or emerging IP issues around employee knowledge. However, one experienced in-house IP lawyer argues that companies are not doing enough to adopt a proactive position in protecting and advancing their IP rights. In fact, Toe Su Aung, who led corporate affairs and legal teams on IP protection and policy at British American Tobacco, feels so strongly about this that she has made it her business. Earlier this year, together with former Microsoft in-houser Chris Oldknow, she formed Elipe - a consultancy focusing on providing IP-related government relations and corporate affairs advice.

Toe Su tells GC that most companies do a great job in embedding themselves early with their inventors and marketing teams - clearing, registering and enforcing IP in a strategic and timely way. Yet companies do not get involved in more systemic and long-term IP issues in the same way that they would with regulatory issues in their industry. For example, most companies from transport to waste management study regulation in their respective sectors, not just to comply with these laws, but also to understand the implications of policy on their business, and predict future trends. Forewarned is forearmed when it comes to explaining a position to politicians. Yet many companies do not do the same with IP issues - even if IP is the company’s main asset.

But how can in-house counsel predict when IP will rear its head? And what does ‘proactive’ really mean?

The early bird

Toe Su contends that companies need to get involved in the IP lifecycle much earlier and engage with those who determine laws globally. ‘As an in-house lawyer,’ she says, ‘I was fortunate to be working for a company that saw these issues, and actually had a remit for IP policy and engagement with governments on a strategic level. Importantly, we also had the head count to do it.’ And Elipe co-founder Chris had a similar remit at Microsoft, she adds: ‘We were both very involved with trade associations, both broad multi-issue business groups like CBI and the US Chamber of Commerce, as well as more focused IP groups, notably Business Action to Stop Counterfeiting and Piracy (BASCAP) and the International Trade Mark Association (INTA).’

It was Toe Su’s membership - and eventual tenure as president - of INTA that opened her eyes to how unusual her experience at BAT was compared to many of her in-house peers. She noticed that many companies see the need to connect strategically with policymakers, but don’t quite know how to do it. Many of them also do not have the right structure: lots have large government relations departments, but IP is not positioned as a priority. Government relations teams often face issues around technical expertise in the IP field, so it is left to the legal department to deal with - but many legal departments have limited experience in interacting with government departments. It is slipping through the cracks. ‘There isn’t really a lot of external support either,’ Toe Su explains. ‘Law firms are not really set up to do lobbying work and engage globally with governments on policy. Dedicated political lobbying firms will have that policy expertise, but many do not have the technical IP focus.’

Top Tips: Developing a proactive IP strategy

We asked Toe Su to outline her top tips for companies looking to get more involved in IP at a strategic level.

A unified strategy

‘You can start by examining the connection between your key IP issues and cross-referencing these with your wider corporate objectives including your sustainability, governmental and public relations plans. This will identify the common issues and synergies.’ Once you have worked out the synergies, decide how critical these issues are, and research which bodies are best to approach.’

Governmental engagement

‘Negotiations, co-operation and dialogues between countries relating to trade agreements (such as the ASEAN Economic Community, the Russian Customs Union and the Trans-Pacific Partnership agreement) cover IP. They have an impact on anti-counterfeiting enforcement and can lead to changes in domestic laws. All these trade agreements have an IP chapter. So the first step is to engage with your own government and then through them find the best channels to convey your concerns to the governments involved in these various trade agreements.’

IP litigation strategy

Many companies are spending significant resources on litigation around the world. If litigation is unavoidable, companies can still engage with policymakers to maximise the outcome – whatever the result:

  • ‘Craft a plan for what you want to achieve out of the case if you lose or win. Sit down and tell policymakers about the case, highlighting what you want to achieve in the event you win or lose. If you lose and the only solution is to seek change in legislation, you will have prepared the ground early by talking to officials and other companies.’
  • ‘Make sure you prepare for any publicity around the case by sending out clear messages and answering FAQs. There are advantages and disadvantages in engaging with the media, but it can be a useful tool in getting your policy message out.’
  • ‘Telling government officials outside the country of litigation will also be useful in making sure that attention is focused on the case and that the matter does not take too long or worse, disappear.’

‘Law firms are not really set up
to do lobbying work and engage globally
with governments on policy.’

New digital frontiers

IP is everywhere and nowhere. IP laws created in the analogue age are now under reform, globally, in the digital age. Patent, trade secret and copyright regulations are all in the process of being re-examined. Toe Su warns that ‘if IP is in any way important to your company, it is vital to be part of the debate so that you’re not just trying to put your square IP issues into the round hole of the emerging legal framework. This is really the key time to make your voice heard, as the rules of the digital marketplace are being shaped. If you don’t, other voices may take over the debate.’

Other voices

Who might these other voices be?

Tech, media and telecoms companies already rooted in the digital space are busy shaping digital policy, raising IP issues that may also affect non-digital companies. As a brand owner, you are probably already marketing and selling online, but are you also engaging with tech policy? Data flows and ownership, IP rights and competition issues all jostle for the attention of those operating in the digital space. It is important for companies that traditionally do not think of themselves as digital players to be clued up and ensure that tech issues fit into their corporate narratives. What does this mean in real terms? A company selling mustard would traditionally see an obvious connection with factors shaping the immediate business climate – perhaps anything related to food, logistics or packaging. ‘We are arguing that in that same vein, companies should see issues relating to the digital marketplace as key points for engagement, as they will define markets for years to come,’ says Toe Su. As an illustration, companies will soon be able to register and manage their own generic top-level domain names such as ‘.shampoo’. It’s impossible to predict how such developments will affect commerce or brand recognition. But those with their ears close to the ground will be in a unique position to direct those developments to their own benefit.

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Education, education, education

Often the policymakers don’t quite get it, according to Toe Su. ‘There’s certainly an opportunity for companies to take a big educational role.’ When Jean-Claude Juncker recently announced the priorities for his term as President of the European Commission, one was a desire to create growth and jobs in Europe by means of a digital single market for consumers and businesses. However, he also advocates removing national siloes in copyright and data protection legislation. Toe Su worries that the IP implications might be getting ignored as policymakers create laws in the digital space. For example, how will a digital squeeze on copyright affect brand owners in more conventional spaces? There is an opportunity for more traditional companies to interact with the European Commission to publicise this issue, as the laws are being formulated.

It’s not just IP

‘Regulatory changes outside the field of IP can also have an impact on it.’ Toe Su explains. She cites the example of the ICANN (International Corporation for Assigned Names and Numbers) generic top level domain name programme (gTLD), which allows for expansion of the dotcom suffix at the end of domain name addresses. Other significant developments include compulsory licensing and public procurement preferences requiring IP transfer to local partners, the use of local workers, or setting specific rules about the way that the IP is licensed. The plain packaging law in Australia targeting the tobacco industry will have obvious ramifications for brand recognition, marketing and counterfeit activity. POM v Coca-Cola is an interesting US case, where Coca-Cola had obtained FDA approval of a new drink product. POM filed for deceptive labelling under the Lanham Act, which empowers private parties to sue competitors on a case by case basis. The Supreme Court ruled in June that the FDA approval was distinct from any potential consumer confusion around ingredients. Toe Su holds that this an example of IP colliding with other legislation in a business critical case.

Ultimately companies need to map their IP issues with their business priorities and broader corporate engagement plans, and then identify the key issues to focus on.

‘Don’t just deal with a problem in China as a problem in China. Get help from the EU or the US, because that’s where you as a company may be most directly affected.’

International co-operation

Global IP policymakers are currently focused on inter-country and inter-agency co-operation. Toe Su advises companies to be particularly heedful of China’s IP policies. ‘China has recently adopted a revised trade mark law, is reviewing its copyright and unfair competition systems and Chinese Customs is working with the EU on a joint project covering over 20 ports to seize and check for counterfeit goods. IP and law enforcement attachés from several countries are facilitating joint enforcement operations on specific cases with Chinese authorities.’ This all signals a much tougher and more collaborative stance in-line with a greater focus on the digital space. The Chinese have also released a new online paper setting out their thinking on online infringers of IP rights in China. ‘This is basically figuring out how they deal with counterfeit websites,’ Toe Su explains. ‘While many counterfeit websites might have a life in the EU or US, they will originate in China, so the PRC is looking for input on how to tackle the problem. This is a good opportunity for companies to feed in their views, especially as PRC is engaging in a lot of bilateral dialogue with the EU and other countries on IP issues generally.

The UK has an IP attaché in China to liaise with the government and the authorities, but also to act as a resource for British companies with IP issues in, or originating from, China. France also has an attaché, as does the US, Japan, and others (see box-out). ‘There is a lot of informal dialogue as well as formal dialogue,’ Toe Su points out. ‘What can be really useful is to inject the perspective of companies outside China into the debate on the ground. If you are a European company you can try and input directly with the Chinese government, but you can also call up the French or UK IP attaché in Beijing and they can help involve the Chinese government in your practical problem.’ The important thing to remember, says Toe Su, is to think globally. Dealing directly with the Chinese government may be daunting for companies who don’t have a footprint there. ‘Don’t just deal with a problem in China as a problem in China,’ advises Toe Su. ‘Get help from the EU or the US, because that’s where you as a company may be most directly affected. The focused IP attachés will have all the right contacts and know the right avenues to pursue.’

How an IP strategy can really make a difference:
ACID and the UK’s Intellectual Property Act

‘That’s great, but I don’t think this applies to me –we’re not a multinational, and I don’t have a huge legal team, or a really well-oiled and connected government relations department.’

 

If this is you, think again. We spoke to Dids MacDonald, CEO of Anti Copying in Design (ACID) - a trade body for lone, micro and small design companies - about their successful grassroots campaign to get design recognised as a category in the UK’s new IP Act.

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‘A lot of the issues about infringement stem from our own backyard: big retailers who copy what small designers do, make minor changes to the original and then send it to China to be mass produced. The majority of designers are small or micro-businesses so it’s a David and Goliath issue.

The starting point was to ask ourselves: in what ways could we influence policy makers? First of all it was getting people to listen. I had endless meetings at the Intellectual Property Office (IPO), putting the case for small designers.

Our strategy was grassroots up and key influencer down. For the drafting and legal aspects of clauses, I relied heavily on legal advisers working pro bono to give me information. We don’t have a public affairs or PR department - I’m it! And I learnt about it on the go. The first step involved talking to as many key people as possible. We got in front of the IPO and just repeatedly told the story. The IPO was completely impenetrable at the beginning, but over the years you get more access as people start to take you seriously. If you can provide case studies, that helps your cause immeasurably. Historically the Hargreaves review of the IP laws wasn’t intended to include anything about design. As vice chair of the Alliance for IP, I was actually able to sit next to Professor Ian Hargreaves (chair of the review) at an industry dinner and make our case to him.

In order to get resonance with ministers and MPs, part of our grassroots campaign focused on the very real risk of job certainty being damaged due to IP infringement. Case studies were key. It was those case studies which were compelling enough to submit to the Hargreaves consultation that resulted in the Prime Minister making design one of only ten areas for IP focus and reform. Professor Hargreaves said that design policy had been neglected in the UK up until now. This was a significant milestone for us through a focused strategic campaign, because we are a small not-for-profit industry body and don’t have the international lobbying clout of many big companies - such as record companies, film studios and games manufacturers.

It’s a partial victory, however, as the majority of UK and EU designers rely on unregistered rights, and the new IP Act only covers registered designs. Designers are prolific in the UK and it costs on average £60 per design to register it. If you consider that the average wage for designers is £14-£19 per hour this doesn’t make registering their designs economically viable for many of them. And you still have to logohave money to enforce your rights.

What we are really hoping the introduction of criminal sanctions for intentional registered design infringement in the Act will do is send a strong deterrent message, because individual board members are liable if companies are found guilty of design infringement. The bottom line is that as soon as one successful case is heard, it will send a chill across a few boardrooms. It’s all part of our mission in raising awareness of the value of original design. Design has been an unsung hero which is incredible given the fact that the UK’s 350,000 designers produce £33.5 billion GDP.’

IP Attachés

One useful tip for becoming more proactive in promoting your IP agenda is to make use of the growing international network of governmental IP attachés. We identify attachés for major governments in key jurisdictions:

 

Contact details:

Based in China

Tom Duke (Beijing): tom.duke2@fco.gov.uk (UK)
Joel Blank (Beijing): joel.blank@trade.gov (USA)
Timothy Browning (Guangzhou): timothy.browning@trade.gov (USA)
Michael Mangelson (Shanghai): michael.mangelson@trade.gov (USA)
Jean-Baptiste Barbier (Beijing): jean-baptiste.barbier@dgtresor.gouv.fr (France)

Based in India

Anshika Jha: anshika.jha@fco.gov.uk (UK)
Kalpana Reddy: kalpana.reddy@trade.gov (USA)

Based in South East Asia

Christabel Koh: christabel.koh@fco.gov.uk (UK)

Based in Middle East & North Africa

Aisha Salem: aisha.salem@trade.gov (USA)

Based in Latin America

Michael Lewis (Mexico, Central America & the Caribbean): michael.lewis@trade.gov (USA)
Albert Keyack (South America): albert.keyack@trade.gov (USA)
Sheila Alves (Brazil): sheila.alves@fco.gov.uk (UK)

Based in Europe

Kristine Schlegmilch: schlegK@state.gov (USA)

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