Protecting Intellectual Property

HOW TO PROTECT THESE INTANGIBLE ASSETS

NAMM strongly opposes infringement of intellectual property rights and is committed to providing NAMM members with information that may help protect these rights that are an important foundation of the music products industry. NAMM cannot provide legal advice and will not be able to initiate legal actions on behalf of our members. However, NAMM encourages members to take appropriate steps to establish, protect and enforce their intellectual property rights in the United States and in other countries. The following should not be construed as legal advice. NAMM makes no representations, warranties or guarantees as to, and disclaims all responsibility for the use of the following advice by NAMM members. NAMM encourages its members to seek the advice of legal counsel in order to determine how to best protect its intellectual property.

Why should you protect your intellectual property?

According to government agencies, more than $500 billion in legitimate global sales is lost each year to counterfeit goods. You may have no legal recourse against imitations if counterfeiters are the first to register your company’s name, logo or product design, among other intellectual property, in other foreign countries. Moreover, some make it a business of registering foreign intellectual property assets including domain names for the sole purpose of selling back to the original foreign owner the rights to use that same property in overseas markets.

How should you protect your intellectual property?

NAMM members should consider the following six basic, often cost-effective, steps when securing protection for their intellectual property in domestic and foreign markets.

1. Develop an intellectual property protection strategy and utilize anti-counterfeit devices.

Filing for domestic and international protection can be expensive. However, failing to take timely action to protect your intellectual property rights could jeopardize your realization of any protection at all. Therefore, it is in your company’s best interests to develop an overall intellectual property protection strategy that is appropriate for your business. If you are a small or medium-sized American enterprise, you can request through the U.S. Department of Commerce (www.tradeinfo.doc.gov) a free, one-hour consultation with an intellectual property attorney to learn how to protect and enforce your intellectual property rights in the U.S., Brazil, Russia, India, China, Egypt, and Thailand. In addition, the U.S. government runs a hotline (866-999-HALT) to counsel businesses on how to protect their intellectual property in the U.S. and in foreign countries. Moreover, think about building anti-counterfeiting devices into your products and packaging. Examples of such tools are Radio Frequency Identification (RFID) low-cost transponder tags, security hologram seals and labels, and light-sensitive ink designs. These anti-counterfeiting devices will help you stay one step ahead of counterfeiters and can assist authorities like Customs and law enforcement officials in preventing violations of your intellectual property rights.

2. Conduct due diligence of potential foreign partners and develop detailed intellectual property provisions for licensing and subcontracting contracts.

Once you are aware of available options to protect your intellectual property, consider conducting due diligence of potential foreign partners and determine where companies similar to yours have experienced intellectual property problems. Government agencies like the U.S. Commercial Service (www.export.gov) can provide a step-by-step approach to market research and can help you evaluate potential foreign business partners. Furthermore, when establishing business relations with foreign merchants, you may want to obtain local legal counsel to assist in the drafting of contracts that include specific language regarding intellectual property rights, non-disclosure limitations and dispute settlement procedures, and any language required under the laws of international jurisdictions.

3. Register defensively your intellectual property in key foreign markets including in countries where infringement is common.

If you do or foresee doing business in foreign markets, especially in countries where intellectual property violations are common, you should strongly consider filing your patents and trademarks and their relevant translations with the appropriate government agency in each country where protection is sought. In some countries, the first party to file an application, even if based on a “proposed use,” can prevent others from registering and obtaining legal protections for the same patent or trademark.

Otherwise, any process to challenge another’s wrongful registration could cost significant time and money, and there are still no guarantees of a favorable resolution. The World Intellectual Property Organization (www.

wipo.int) and the Stop Fakes (www.stopfakes.gov) web sites are sources for information on how to apply for intellectual property rights in different countries around the world.

Most countries do not require that you register your copyrights before enforcing them, but registration with the appropriate government agency is strongly recommended because it provides several benefits such as proof of ownership. However, not every country provides copyright protections. The U.S. Copyright Office (www.copyright.gov) is a good resource for information about the nature of copyright laws and relations amongst the countries that do provide copyright safeguards.

4. Record your registration certificate and licenses with Customs and Border Protection Agencies and other administrative bodies.

Once the appropriate government agency approves the registration of your intellectual property, you should consider recording for a reasonable fee your registration certificate along with details of any legitimate licenses with the Customs department in every country in which your intellectual property is protected. Moreover, it may be necessary to record copies of such license agreements with other administrative bodies at both the national and local levels. In most countries, these administrative agencies have the authority to confiscate and destroy counterfeit goods and impose fines. It is recommended that you consult with local counsel to determine the applicable registration and recordation requirements in international jurisdictions.

5. Establish a physical presence to monitor your intellectual property rights.

If your company is doing a large volume of sourcing, manufacturing or selling in a foreign market, consider having at least one business representative present in that foreign country to monitor the activity in the marketplace and to conduct basic market research. Moreover, a local representative can benefit your company by establishing positive community relations that could generate political attention to your own intellectual property issues.

6. Maintain records to effectively enforce your intellectual property rights.

You will have a better chance to prevail in a dispute over intellectual property rights if you maintain sufficient, historical documentation that undoubtedly establishes your entitlement to those rights. Moreover, upon adequate proof of your intellectual property rights, government agencies in most countries will help you enforce your rights in accordance with local laws. For example, in the United States, the Office of Intellectual Property Rights in the U.S. Department of Commerce (www.usdoj.gov/oipr/) will assist businesses in the development of an enforcement strategy in the U.S. and in foreign countries.

To save time and money in the long run, NAMM members should consider establishing and maintaining files for collecting documents relating to your intellectual property, such as: (1) Records, letters, invoices, receipts and other documents related to the adoption, first use, registration, and ownership of your intellectual property; (2) copies of advertisements that use your intellectual property, dated as of their appearance, together with records of company expenses for that advertising; (3) yearly summaries of the amount of product sold that features the intellectual property; (4) records relating to any changes in the intellectual property; and (5) any demand letters to others who try to pirate your intellectual property.

Conclusion

Although national laws are becoming increasingly harmonized through the effects of international treaties, intellectual property laws including the procedures and costs of acquisition, registration and enforcement of intellectual property rights may still vary from country to country. NAMM strongly encourages members to take appropriate steps to establish, protect and enforce their intellectual property rights in the United States and in other countries.

This document is the property of NAMM. NAMM’s intellectual property materials are proprietary products of NAMM and must be referenced in their entirety.

Please do not copy or distribute portions of this document that dilute the context of the complete document intent. If you have further questions regarding NAMM’s Intellectual Property Rights policies, please contact us at Legal@namm.org.