All too often New Zealand companies launching into international markets do so with insufficient preparation, a patent law expert believes.
Tim Walden, managing partner of nation-wide law firm James & Wells, says at best this can cost a business valuable time, money and resource: "At worst it could cost someone their business."
He says preparation is vital. "The more time a company invests in developing an export strategy, the higher the probability of success; all too often we hear of New Zealand companies that have launched into international markets only to discover the hard and expensive way they weren't sufficiently prepared."
Walden's comments come as James & Wells is preparing a seminar series – Taking Your Innovation to the World – which will look at how to become "export ready". The series is to run in June with sessions in Auckland, Hamilton, Tauranga and Christchurch.
New Zealand exports reached $79 billion in 2018, 20 per cent of which went to our main trading partner China while in March this year exports hit $5.7 billion, a new record for a single month according to Stats NZ.
Walden says because exporting is not without its stress or risks, it is important companies research and understand everything they can about the markets they wish to enter – do they have the freedom to operate, what regulatory or compliance issues apply, who is the competition, how do business and cultural practices differ? Yet many come unstuck when it comes to financing an export strategy.
Walden says there are many other issues to consider including what is the right time to start exporting, how to compete with a limited budget, what pricing strategy should be adopted and whether the right leadership is in place to manage staff overseas.
Companies also need to decide whether a third-party distributor or partner is required. This can depend on the type of product or service being marketed, but it is crucial companies take care to choose the right partner – and that the appropriate terms of trade and contractual arrangements are in place.
Protecting intellectual property (IP) is another area of concern for exporters and Walden says Kiwi businesses can often be too "lax" about registering their IP rights.
"Some see it as a minor detail in their export strategy," he says. "But this can be to their detriment; internationally registering a product or idea is the only way to ensure you have exclusive rights and there can be major ramifications for those not registered."
Walden says heartbreaking scenarios can easily become reality if IP is not factored into the export equation.
"For example you've spent years (and thousands of dollars) developing what you think is a great new product, and you're ready to go global. Your key target market is the United States, but you discover your idea has been patented or your brand is owned by someone else and you're effectively locked out for good," he says.
"Many people don't factor in IP when working out costs. It often seems to be an afterthought, when in fact it needs to be considered very early on in the process."
Lowry Gladwell, senior legal counsel of software company Vend says there is a misconception IP protection is virtually non-existent in China.
"This isn't the case and recent initiatives there have strengthened their IP laws considerably. But it's a tricky market to enter and the process can be very slow."
Gladwell, who will be speaking at the seminars, says James & Wells helped put in place an IP strategy to work alongside Vend's business strategy – a step which has enabled them to fully roll out in their preferred markets.
"If you are building a product you really believe in, you are doing it an injustice if you don't put the right intellectual property protection in place and the trick is to get it right at the start as it's super hard to fix later on if anything goes wrong."
The 'Taking Your Innovation to the World' seminar series is aimed at helping those looking to grow their export business. It will feature expert advice from industry professionals including James & Wells, New Zealand Trade and Enterprise, The Icehouse and Katabolt. Kiwi exporters Vend, Rockit, Invert Robotics and Ohmio will also share their experiences and answer questions. For more details go to: Taking Your Innovation to the World.