Avoiding the legal pitfalls of exporting

The pitfalls of exporting
The pitfalls of exporting

There’s so much to do and sort out when exporting that legal technicalities can be easily overlooked. However, not being careful could lead to your business losing out financially, or having essential IP or trademarks stolen.

For example, thinking you’re your domestic registration of your trademark will cover you internationally is a mistake because a trademark registration only applies in the market in which it is made. When entering new markets you therefore have to register your IP and trademarks for protection in each market.

Liz Ward, an award-winning IP lawyer and founding director of Virtuoso Legal, told us on a recent webinar that you need to be legally proactive when operating overseas.

She said: “Most countries operate on a first-to-file basis, so make sure you get your trademark in as early as possible, especially before dealing with a distributor.”

Your working arrangements with distributors are important for other reasons, legally speaking. You want to ensure that they cover ‘the two Ps’ – ‘Payment’ and ‘Performance’. Your contract should clearly set out the terms of performance by which your distributor is paid and how this payment will be made.

Though you’ll be dealing with international contracts you should do all you can to draw up the contracts under the Laws of England & Wales – and be explicit within the contract in stating this.

Virtuoso Legal, taking part in a live Twitter Q&A about the legal aspects of international trade, stated: “it’s possible to have a contract covered by the Laws of England & Wales. We regularly draft distribution contracts for distributors in these countries with a jurisdiction clause specifying UK law.

And the other thing you’ll need to remember when exporting is the potential for the nuances of your arrangements to ‘get lost in translation’. You need to make absolutely sure that you’ve explained any potentially onerous terms to the international customer or 3rd party.

In this respect, getting your contracts properly translated can be an important step take, while appending the original English version of the contract to the contract signed can also help to alleviate any potential misunderstandings – especially if that contract is drawn up with the jurisdiction clause regarding the laws of England & Wales.

Translation is a potential minefield for exporters in general and we will be tackling this in our next webinar ‘Don’t get lost in translation – top tips for first-time exporters’.