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Scores of new franchising concepts are converted into profitable businesses everyyear, and the majority is created in the United States. Recent global franchisingsuccesses include personal fitness, flower and candy, and elder care companies. Manyfranchises are created especially for entrepreneurs in developing countries andfeature relatively affordable license fees. Attending the International FranchiseAssociation (IFA) Annual Convention (franchise.org) is a good way to learn abouttrends and new franchising concepts.As a form of “exporting,” technology licensing has some drawbacks. Your control overthe technology is weakened because it has been transferred to another company;additionally, licensing usually produces smaller profits for your company thanexporting actual goods or services. And in some countries, adequately protecting thelicensed technology from unauthorized use by third parties may be difficult.You should register your patents andtrademarks in each country. Copyrightis recognized globally, but patents andMany small business ownerstrademarks are territorial, so rights maychoose franchising over starting avary depending on different countries’new business because franchisinglegal conventions. (You only need to file provides easy access to anyour patents and trademarks once withestablished product, reduces risk,the European Union [EU], as EU lawsprovides marketing assistance, and,apply to all EU members. The Patentin some instances, offers help inCooperative Treaty (PCT) and the Madridobtaining startup capital.Protocol allow you to apply for patentprotection in the EU, as well as in specificcountries throughout the world. For moreinformation, visit www.stopfakes.gov and uspto.gov.When considering technology licensing, remember that foreign licensees mayattempt to use the licensed technology to manufacture products that compete withyour company or other licensees. Often, U.S. licensers may try to impose territorialrestrictions on foreign licensees, depending on U.S. and foreign antitrust laws andhost country licensing laws. Also, U.S. and foreign patent, trademark, and copyrightlaws can often be used to bar unauthorized sales by foreign licensees, provided theU.S. licenser has valid protection in the applicable countries.Many countries, particularly members of the EU, also have strict antitrust laws thataffect technology licensing. The EU’s block exemption regulation—CommissionRegulation (EC) No. 772/2004 of April 27, 2004, dealing with the application of article81(3) of the Treaty of Rome to categories of technology transfer agreements—governs patent and information licensing agreements, as well as design and modelrights and software copyright licenses. If you are currently or considering licensingtechnology to the EU, be sure to understand and carefully consider the regulation.Due to the complex nature of international technology licensing, be sure to getqualified legal advice in the United States before entering into an agreement. It’s86U.S. Commercial Service • A Basic Guide to Exporting