Background:
Mobix Auto (“Mobix”) is a European company specialised in manufacturing parts and accessories for automotive manufacturers. Having achieved considerable market share in its home market and some other European countries, Mobix plans to introduce its products to the South-East Asian market, after learning of the growing demand for vehicles and vehicle components in this region.
Before entering the region, Mobix attends an automotive trade show organised in Singapore to survey the potential markets in the region, and to establish contacts with potential local partners. At the trade show, Mobix comes into contact with Metro Singapore (“Metro”), a distributor of parts and accessories in Singapore and the region.
Action taken:
After learning of Mobix’s intention to enter the South-East Asian market, Metro expresses its interest in becoming Mobix’s local partner and promised to “take care” of the necessary in order for Mobix to seamlessly enter the Singapore market, before expanding into the region. Delighted, Mobix leaves some brochures of the products (with images of the product designs) that it intends to introduce to the respective local markets, and the two companies fix their next meeting in the near future to formally discuss the terms of their joint venture.
Outcome:
Six months later, having obtained the necessary approval from the Board of Directors, Mobix is ready to enter into formal negotiations with Metro to set up the joint venture. However, Metro declines Mobix’s invitation to engage in formal negotiations, stating that it has entered into a joint venture with another reputable European parts manufacturer, given that Mobix had taken too long to come back with its proposal.
Disheartened by the news, Mobix nevertheless starts to look for another local partner. At the same time, Mobix’s Managing Director decides to register the designs of the parts and accessories that Mobix intends to bring to the Singapore market, having attended a talk on Intellectual Property Protection recently. As it turns out, very similar, if not identical, designs of said parts and accessories have been validly registered in Singapore in the name of Metro. Mobix is now faced with the threat of design infringement if it brings its products into Singapore.
IP Lessons:
- EU SMEs should apply for protection of industrial designs early, before others do so first and benefit from their creative efforts.
- When engaging in initial negotiations with potential local partners, EU SMEs should be vigilant and consider entering into non-disclosure agreements with such local partners, pending formalisation of the relationship between the parties subsequently.