Venturing abroad takes courage. But in this day and age, it is a necessity for businesses to expand their market reach. Businesses in Singapore, for example, do not just stay in Singapore! In 2018, Singapore exported US$ 411.7 billion around the world, with the top export being electronic equipment. Businesses can’t keep within their shores if they want to expand and grow to be a market leader. Let’s have a look at the ten ASEAN countries. In 2017, businesses based in ASEAN exported within the ASEAN region (average being 25% of their exports), but many exported to countries outside the ASEAN region too.
Venturing abroad, however, brings forth various challenges, including trademark-related challenges. How does one take their trademark abroad? Is there a universal trademark protection? What are the risks? Are trademark laws in other ASEAN countries similar or harmonised? Read on for key tips one needs to know before venturing abroad with their trademark.
Firstly, why bother with trademark registration?
This is a question that we are often faced with. Valid one too. The answer is threefold: (i) Protection, (ii) Money, and (iii) Adds value to your brand.
Protection. Think of insurance. Why does one get various types of insurance? For protection. Against fire, burglary, critical illnesses and so on.
Akin to insurance, trademark registration affords the trademark owner better protection against a third party that copies their trademark on identical or similar goods/services. It affords protection against anyone that tries to steal their market share.
Money. By this, we mean “Commercialisation Opportunity”. A trademark is your property, and registration would allow you to licence your trademark to others in a licence or franchise agreement, earning royalty fees. That is your passive income.
Adds value to your brand. Once registered, you can put the ® symbol next to the brand and the impression you give your clients and customers is that this brand is worth being associated with – it is so important that the brand owner has taken the initiative to protect the brand.
So, is there a Universal Trademark Registration?
This is every businessman’s dream! Sadly, there is no universal trademark registration. Trademarks (and all other IP rights) are territorial in nature and this means that if trademark protection is sought in five countries, individual applications need to be executed in those five countries.
However, there are two regions that allow one trademark registration for their member countries, that being EU and OAPI (an organisation dealing with trademark matters in French-speaking African countries).
If it is territorial, what do YOU need to know about entering ASEAN?
1. You may be trespassing third party rights
As trademarks are territorial, you may be using trademarks that are identical or substantially similar to registered trademarks in the jurisdictions you are venturing into. This may result in you facing legal battles once you launch your products or services in that new market. We had a client who had to rebrand the restaurant they were franchising abroad as another company had already registered the trademark.
The pain in rebranding, reprinting marketing material, changing signage, educating the public once more through new advertisements and so on, was a pain that client (who came to us only after receiving the Cease and Desist Letter) will never forget!
To avoid this, a trademark clearance search must be embarked on in countries you are venturing into, to ensure that there are no identical or substantially similar marks that will restrict the entrance of your trademark into that new territory.
2. You may be offending the locals
BUNDH is a trademark created by a British food manufacturer for curry sauce and after launching the product in the UK, the manufacturer received complaints from the Punjabi community as BUNDH meant buttocks.
Ford’s PINTO model in Brazil received poor response from the Brazilians when newly launched and Ford later discovered that PINTO means male genital that is small in size. Ford later changed its trademark to CORCEL.
In ASEAN, there are about 20-25 languages that are spoken, including Khmer (Cambodia), Lao (Laos), Vietnamese (Vietnam), Thai (Thailand), Tagalog (Philippines), Bahasa Indonesia (Indonesia), Bahasa Melayu (Malaysia, Singapore), Mandarin (Malaysia, Singapore), Tamil (Malaysia, Singapore) and of course, English (many of the capital cities of the ASEAN countries). The risk with venturing into ASEAN countries with a new trademark is that the trademark may offend someone due to the brand’s negative connotations when spoken in the local language or dialect.
So, the second tip is for linguistic checks to be conducted. This can be done during the clearance search. This will avoid any possible blunder in foreign markets which may cost poor sales or tarnish the image of the trademark. We can all learn from IKEA who took four years to analyse all of their trademarks for their products before launching their first store in Bangkok. Thai linguists and translators were consulted and modifications were made to the trademarks that had negative connotations. Ironically, many of IKEA’s products had trademarks with sexual connotations behind them. Take IKEA’s Redalen bed for instance. Although Redalen refers to a Norwegian town, in the Thai language, Redalen sounds like the Thai word for getting to third base. IKEA also had to rename Jattebra for their plant box as it sounded like sex in the Thai language.
3. The First-to-File Rule
Some ASEAN countries practice the First-to-File Rule. Basically, what this means is that, the first party to file the trademark in that country is, as a general rule, considered the true owner of the mark. Owners of trademarks who fail to register their trademarks, or registered their trademarks late, do not possess rights over their trademarks in that country.
In countries such as these, it will be an uphill battle to secure your trademark even though you were the first to enter that market and first to use your mark there.
Myanmar, Indonesia, Vietnam, Cambodia, Laos, Philippines and Thailand, are the ASEAN countries that practice the “first-to-file” principle.
Singapore, Malaysia and Brunei practice the “first-to-use” principle, and this gives security of some sort as priority is given to the party that used their mark first rather than the party that filed their mark first at the Intellectual Property Office.
Venturing abroad does take courage. However, courage is strengthened with sufficient preparation, research and advice. Businesses should not be deterred from venturing into the ASEAN region. It is after all one of the fastest growing economies in the world. Instead, businesses should just seek advice from the experts in the IP field.
If you are interested to apply for trademark protection aboard or to learn more about protecting your intellectual property (IP) please visit our partner, KASS, a leading Southeast Asian IP boutique firm.
This article is written by Geetha K, a Director of KASS International and is reproduced with permission.
The view expressed in this article is intended to provide a general guide to the subject matter and does not constitute professional legal advice. You are advised to seek proper legal advice for your specific situation.