www.ragtrader.com.au
legal eye
june 2014 Help! How do I go global?
Legal firm K&L Gates answers your pressing questions.
D
ear K&L Gates Agony Aunt,
Over the past three years, my handbags
and accessories label has taken off. I’ve
signed distribution agreements with both major and boutique retailers, I operate my own
boutique stores in Melbourne, Sydney, Brisbane and online and I’m enjoying fantastic
media coverage. My dream is to launch a store
overseas. It is a pretty serious investment for
me, can you give me any advice?
– NextBigThing
Dear NextBigThing,
Congratulations! You’re clearly doing something right in today’s competitive retail environment. Launching your brand internationally is a significant business decision. Our top
tips for things to consider before making the
move internationally are below.
stock of your business,
1Take
and test your strategy
Now is the time to make sure that your business is in good running order. You should
maintain quality financial reports that tell you
whether you’re producing stock at the right
rate (that is, always having enough to meet
demand, without ending up with too much
unsold stock taking up warehouse space) and
whether you have the cash flow to comfortably meet your business’ operating costs. Your
business plans need to be adaptable to changes
in the Australian marketplace, such as the stiff
competition created by the current influx of
northern hemisphere brands. The cost of running your business can be impacted by the legal structure you have adopted and the terms
of the contracts you have with suppliers and
retailers. Now is a good time to review these
matters to make sure that your business isn’t at
risk if the market dramatically changes.
It is also crucial that your strategy is dynamic enough to successfully adapt to an overseas
debut. This is particularly true with online
sales overseas. It is infuriating for customers to
order and pay for your products, only to have
to pay high shipping costs or wait for weeks to
receive their purchases because you don’t have
efficient warehousing and shipping operations.
Make sure that you will be able to service your
overseas clientele with the same level of attentiveness as your customers back home.
2Know your new market
No matter where you are, it is the quality
of your products that will set you apart and
build your customer base overseas. Never underestimate the value of researching new markets. Your competition on Fifth Avenue, New
York will be completely different to brands
jostling for space in Harajuku, Tokyo, and it
is important not to set out with a one-size-fitsall approach. This might mean you need to
be discriminating about where you want your
products sold, and although it is flattering to
receive attention overseas, not every approach
might be a good fit for your brand.
You also need to consider the legal ramifications of selling overseas. Each country will
have different legal requirements, from taxes
to company laws, safety regulations and employee entitlements. You will need specific
legal advice about operating in each country
from lawyers familiar with that jurisdiction.
If you’re starting out by entering into distribution agreements with retailers in another country, it is important to do your research. A lawyer can assist you to negotiate
a favourable agreement with an overseas retailer, and advise you about your rights if you
are unhappy with how the retailer is marketing and selling your products.
3Protect your label and designs
It is also crucial that your label and designs are protected from potential imitators in
your new market, and that you’re not at risk
of being accused of copying another designer’s work or brand in that country. Registered
Australian trade marks and designs are only
enforceable in Australia, but you can register
your trade marks in individual countries, or
in multiple countries, in many cases, based
on your Australian registrations. In some
countries you can also register your copyright
(such as fabric prints) and your designs (such
as the shape and look of distinctive products).
Your name, logo and key elements of your
branding should always be protected by trade
marks, which cost relatively little to register in
most countries. Remember that the more distinctive your branding, the easier it will be to protect,
so you should seek advice from an intellectual
property lawyer about protecting important aspects of your branding. It is critical to do this before you start trading overseas, so that you don’t
have the nasty surprise of finding that a copycat
has registered your trade marks in their own name
overseas. Brand hijacking is unfortunately becoming increasingly common in some countries. This
is also true of overseas manufacturers registering
the brands of the businesses that engage them.
We also recommend registering variations
of your domain name covering important extensions, not just the principal one you have
registered. Registering a domain name does
not give you any property rights (unlike a trade
mark), but prevents competitors or counterfeiters from using similar domain names for
profit or to mislead the public. Ultimately,
your branding and designs are your most valuable assets, so it is important that you protect
these wherever you are selling your products.
Above all, maintain good communication
with your international agents, stockists and
customers so you get a true picture of how
your brand is performing – good luck! ■
Authors: Lisa Egan, Caroline Cossio and
Jacqui Pitt – K&L Gates
For legal advice about protecting your brand or expanding your business in Australia or overseas, please contact
Lisa Egan, Partner, K&L Gates or Caroline Cossio, Senior
Associate, K&L Gates – 03 9205 2000; lisa.egan@
klgates.com, caroline.cossio@klgates.com
27