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Ever have the misfortune of violating someone’s trademark? U.S. Customs is on guard to protect the intellectual property rights of U.S. companies, and for that we should be thankful. But what happens when you’ve made a simple mistake?
Unfortunately, Customs only sees in black and white, meaning it’s either a violation of someone’s rights or it isn’t and its left to you to plead your case to the Trademark owners Brand Protection Manager for cooperation and release of your goods. I recently came across a story that involves what some may call an over-protective, perhaps overzealous Brand Protection Manager and a chain of errors by a well-meaning importer trying to keep up with a myriad of product labeling requirements. A cautionary tale – The importer was in the midst of a product label change due to the requirement of a California product warning, Proposition-65. Thinking it was a good idea, the importer utilized a sample label that not only included product information, barcodes and the California warning but also included UL, CE, and WEEE graphics. This sample was intended to be an illustration to the vendor on the proper way to create a product’s label. The Importer sent this new label to all of their vendors in China. As you can image, the Chinese vendor took the label change for gospel and dutifully printed and labeled the product’s shipping box with these newly minted product labels.
As luck would have it, Customs randomly selected the importer’s shipment and found the graphics on the product to be ‘confusingly similar’ to graphics Customs has on file for the trademark holder and thus reported the infraction… things progressively went downhill in a hurry. In the end, products from three individual shipments were eventually seized by Customs. The trademark holder’s no-tolerance policy in this instance claimed an unintended victim. The Brand Protection Manager, unwavering, assured the importer that their policies were not intended to cause them harm, however their inaction and unwillingness to forgive the importer’s mistake eventually cost the importer over six-figures in product and potential sales. Let this be a warning, I guess… to dot those i’s and cross those t’s. Maple Creek’s expertise in Trade and Product compliance may have helped to avoid this costly situation, after all our mantra is to anticipate legal issues before they become legal issues. How can we help you?
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Political Risk Management & Trade Development
The two topics are woefully intertwined yet many managers continue to view these as separate issues. I first saw this in the 1980’s… the NIMBY syndrome… you know, Not In My Back Yard… was the view of the world from many managers who failed to see the political events that eventually harpooned their international development ambitions. Maple Creek employs a forensic approach to Trade Development anticipating issues before they become an issue by answering this simple question: “what happens before the unexpected occurs?” Economic and geopolitical volatility create uncertainties. So, too, do changes in the deep-seated assumptions that drive business strategies. But what happens when the truly unexpected occurs? When political factors affect business? And when models, simulations, and forecasting all fail critically? Typically, one of two things: Denial or paralysis. Both are understandable, but they do nothing to help an organization maintain or gain competitive advantage. There is a potential upside, however, for organizations with the foresight to mobilize in light of disruptive scenarios—and respond in a way that ultimately powers their performance. Take for example Brexit and the 2016 election. With Brexit the impact was immediate as the pound sterling lost roughly 16% of its value against the U.S. Dollar. Now what remains after all of this back and forth squabbling in the UK parliament is an unknown landscape. Those that recognize the complex geopolitical variables and develop a plan of attack for political risk management should be better positioned in the evolving UK and EU marketplace. Others that sit on the sidelines may see opportunity pass them by. So, how are you prepared? In 2016 media outlets had already given the election to Clinton and many in the business world were prepared for another four years of the same. Enter Donald Trump. It has been repeated many times after the election’s autopsy that you should have been drowning out the noise and listening to what Mr. Trump was saying… who he disliked… who he thought treated the U.S. economy unfairly and what his ambitions were. All that is happening in todays economy was foretold, but were you prepared? I don’t think anyone could have been. Political risk is not a new concept, rather the context has changed. Typical political risk analysis tends to be long on information about events but short on strategic advice. And when advice is offered, it’s often reactive and addresses individual risk. So how does this relate to Trade Development? After all I did say the two were intertwined. It would seem that since the 1970’s and maybe earlier, American businesses had been operating on the thought that integration of global markets would promote political cooperation and a leveling of those so-called “rules of the game” around the world… for the most part it did. Cars as an example no longer contained parts from one country, rather were a combination of parts produced in many countries and merely assembled in another. A car parts manufacturer who anticipated this globalization of the automotive industry would have taken advantage of this and expanded their sales in foreign markets… same for raw materials producers and so on. Fast forward to today and the Trump administration’s highly publicized efforts to reduce the trade deficit with China. The original goal was a gradual opening of China’s political system… Turns out they had different plans and now the U.S. faces a strategic competitor who not only challenges our global dominance, but whose political vision and ideology may end up challenging its own. This doesn’t mean that Trade Development opportunities have gone the way of the 8-Track, rather for the savvy trader the political landscape offers a pro-trade and pro-investment flavor. Many outlets have trumpeted this Fourth Industrial Revolution where trust and credibility are fast emerging as the key competitive differentiators for organizations around the world. Perhaps it’s something Generation X demands… Transparency after all… as we typically trust no one. For those of you just hearing about this, the Fourth Industrial Revolution is a way of describing the blurring of boundaries between the physical, digital, and biological worlds. It’s a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies. The promise of this revolution is the potential to improve the quality of life throughout the world. The peril may be the segregation in the job market typically low-skill/low-pay versus high-skill/high-pay and its this type of risk that could both make trade development a success and failure. Political Risk Management and Trade Development run hand in hand which brings me to restate the point of this blog - successful companies are prepared, they anticipate threats and plan for all eventualities. My 30+ years in supply chain management have taught me a couple critical skills… anticipate the impact of the weather, illness, labor unrest and public discord. Maple Creek employs a forensic, hands-on, comprehensive approach to international trade development ultimately providing you the opportunity to anticipate legal issues before they become an issue. Global trade compliance is strategic, we help our clients assess areas of vulnerability, remove avoidable costs, minimize risk and foster international trade development. See our blog on Reasonable Care and let us know how we can help. Sec 301 Tariffs –
You are undoubtedly behind the eight-ball if you are just starting your mitigation efforts, but it’s never too late. So far there are three tranches of the Section 301 Tariffs and a rumored 4th. The first two offered opportunities for companies to file a request for exclusion of their goods, and there will be a third exclusion process you can take advantage of. By doing so, you’ve got nothing to lose. Make your voice heard! Remember though, the number one reason exclusion requests fail is because the petitioner failed to show that the product under consideration could only be procured from China. Specifically, the petitioner failed to show that the product couldn’t be made elsewhere. The administration likely doesn’t care that you’re heavily invested in China. Their unrealistic expectation that you would just stop doing business there was just that… unrealistic. Business is like a huge cargo ship… It doesn’t stop and turn on a dime. So now you’re left holding the bag… How are you going to mitigate these tariffs? You could tool-up in another country and avoid them altogether, but many of your hardcore products likely require trained workers to assemble your products and training new workers takes time and investment. You could wait it out, but the experts simply just don’t know when these tariffs will end. So, what mitigation weapons remain at this point?
Maple Creek employs a forensic, hands-on, comprehensive approach to international trade development ultimately providing you the opportunity to anticipate legal issues before they become an issue. Global trade compliance is strategic, we help our clients assess areas of vulnerability, remove avoidable costs, minimize risk and foster international trade development. See our blog on Reasonable Care and let us know how we can help. Global Trade Management is the practice of streamlining the entire lifecycle of global trade with the end goal of improving your cash flow.
The term “compliance” gets thrown around often in the global trade management world; however, few entities take the time to understand how global trade compliance affects daily operations. Complying to the rules and regulations in one jurisdiction can vary dramatically from compliance to local statutes in another. Unfortunately, globalization within the supply chain has led to even more complex and esoteric factors to consider, in global trade compliance terms, thus ultimately ensuring compliance to all rules and regulations near-impossible; however, compliance must be present in all aspects of your supply chain. As your world grows, so too have the opportunities for risk. Prior to engaging in international trade, management must ensure all global trade management expectations are meet for all political and geographic areas. This requires extensive research and monitoring of political climates on a global scale… daily… Unfortunately, small to medium, if not some large, businesses rarely have the resources necessary to ensure adherence to international trade laws. Furthermore, political actions in one country can directly impact how business is conducted with another country. So where do you find relief? Is it with someone who holds 2-3 years-experience? What's a partner really got to have? 1. Reliability. It isn’t enough to mean well, to want to be top-notch; hope is not a business model. 2. Excellence. Their motto should be: we do everything with excellence. 3. Value. Qualitatively and quantitatively, what does your potential partner bring to the relationship? 4. Expertise. If your partner doesn’t know your business as well as you, should he or she be your partner? 5. Problem-solving skills. You need a take-charge partner, not one looking to you for the answers. 6. Continuous improvement. Your partner must value ongoing education for his/her team. 7. Support. What after-sales or post-implementation support is your partner able and willing to give? 8. Positive attitude. You need a partner who sees challenges as opportunities. 9. Global reach. Does your partner’s reach match yours? Stay-at-home partners need not apply. 10. Strong leadership. Is your partner reading the manual on leadership — or writing one? Maple Creek employs a forensic, hands-on, comprehensive approach which provides you the opportunity to anticipate legal issues before they become an issue. Global trade compliance is strategic. Can Trade Compliance Create Return On Investment?
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