Describe the guidelines for protecting intellectual property.
Chapter 16
Licensing, Franchising, and Other Contractual Strategies
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International Business: The New Realities, Global
Edition, 3e (Cavusgil)
Cavusgil, 3edition, Licensing Franchising
and Other Contractual Strategies, Licensing, Franchising, Franchise, Chapter16
Answer: In advanced economies, intellectual property is usually protected within established legal systems and methods of recourse. A firm can initiate legal action against someone who infringes on its intellectual assets and will usually achieve a satisfactory remedy. Experienced firms devise sophisticated approaches to reduce the likelihood of intellectual property violations and help avoid their adverse effects, especially in countries with weak property rights.
ReplyDeleteBefore undertaking contractual entry strategies abroad, management needs to understand local intellectual property laws and enforcement procedures, particularly when exposed assets are valuable. The firm should register patents, trademarks, trade secrets, and copyrights with local governments, especially in countries with weak anti-piracy laws. Some companies lobby national governments and international organizations for stronger intellectual property laws and more vigilant enforcement, albeit with limited success.
Management must ensure that licensing and franchising agreements provide for oversight to ensure intellectual property is used as intended. Licensing contracts should include provisions that require the licensee to share improvements or technological developments on the licensed asset with the licensor. Noncompete clauses in employee contracts help prevent employees from serving competitors for some years after leaving the firm.
Monitoring franchisee, distribution, and marketing channels for asset infringements helps avoid problems. The firm should monitor the activities of local business partners for potential leaks of vital information and assets. Trade secrets must be guarded closely. Using password based security systems, surveillance, and firewalls limits access to intellectual property. Intel and Microsoft release only limited information about key technologies to partner firms. The firm can deter much potential piracy by aggressively pursuing criminal prosecution or litigation against those who pilfer its logos, proprietary processes, and other key assets.