We need to talk about international trade. Here are 5 things that can really help you and that you REALLY need to know

13 October 2020


In practical terms it has never been easier to trade internationally. Yet we’re increasingly finding that many of our clients get “caught out” by one thing or another. Here are 5 things you really should do:

  1. Make sure you have a good set of contracts. If you are dealing with a wholesaler then this may be a distribution contract that sets out how much stock they hold, when and how they will pay you and provisions that require them to forecast demand or sales. If you’re dealing with the public and you’re selling directly, then the devil can be in the detail – for example, when and how can someone return the goods from overseas? What happens if your contract for the supply of services online falls through when it is part delivered?
  1. Make sure you have proper trade mark cover. Sadly, this is the one that we pick up time and again. If you want to sell your goods in the USA, China or globally then make sure you’re the one who registers the trade marks first – and use a professional who knows exactly what they’re doing from the start. We regularly find that people fall foul of international trade mark registration for the following reasons:

a. They’ve not properly registered a trade mark in the UK or EU to start with. For example, the trade mark doesn’t cover all the goods and services it needs to – online retailing is frequently missed off when people file their own marks as they think about the goods or services only, not how these are delivered, for example by online delivery.

b. They have too broad a specification of goods registered – some clients cover goods and services that are just irrelevant to their business by using the cut and paste tool at the trade mark office. This means their marks are opposed by third parties or can’t be registered in the first place in certain markets. The examiners of US trade marks regularly reject broad trade mark specifications.

c. Many people don’t do a proper search before filing. Whilst on the surface of it many registries are online and so a direct search shows no conflict, the truth is that competing marks aren’t that easy to spot unless you have access to the right databases, information and know trade mark law in the countries in which you wish to trade.

d. We frequently see clients who’ve had a chat with someone in China or elsewhere or been at a trade fair and that person has then gone off and registered key trade marks and domain names locally. Yes, it happens! In fact, it happens A LOT! Indeed in the Far East lots of companies effectively steal IP as they register other peoples patents, designs as well as their brands.

e. We’ve also come across situations where an interested party files a blocking trade mark. In the USA they call these trolls and much like the mythical creatures, they provoke and cause chaos! We even seen trade mark applications in the USA where a party has filed as US mark deliberately to block a legitimate application to use a trade mark by someone else. This kind of blocking strategy can close off a whole market to a supplier and is done deliberately to stop such trade. Trolls generally block access to big markets such as the USA and China.

  1. Check local legislation. Consumer regulation can vary a great deal from place to place. What is seen as acceptable in one country may be completely rejected in another. For example, safety legislation varies a great deal. A fire test or toxicity test in one country may well not be acceptable elsewhere. It is up to you to find out how you can comply with the regulations. You will almost certainly have to provide things such as safety data or instructions in a local language. Don’t assume that just because your product passes test in the UK that the same standards are applicable in Germany or the USA.
  1. Check your insurance cover. Does your insurance cover you in the countries in which you trade? Product liability insurance for the USA can be complicated and expensive to obtain for example.
  1. Exchange rates can vary a great deal – especially in times of turmoil and that certainly applies now with Brexit and the pandemic. Make sure you get paid exactly what you require in YOUR local currency. If you are going to carry some level of exchange rate risk then you can forward buy currency and fix the rate, or contractually implement some kind of payment type that means both parties bear the cost of fluctuating exchange rates.

Stuck in a muddle and need help on these issues?

Contact Liz Ward on liz@virtuosolegal.com


Kindly supplied by Virtuoso Legal


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