Business brief 2017: Barbados

25-05-2017

Rosalind Smith Millar

Every year more than one million people find their way to Barbados, the tiny eastern-most island in the Caribbean Sea. Barbados is a small island developing state with a local population of about 285,000 people. The island features 97 km/60 miles of coastline, 430 square km/166 square miles of land area, a mild climate year-round and few natural hazards.

There is strong offshore business sector. For many years, Barbados has been the business destination of choice for investors seeking a stable political and regulatory environment, tax incentives (but not a no-tax haven), a solid legal system with an independent judiciary, sound physical infrastructure and telecommunications systems, established air and sea connections to major international hubs, a well-educated labour force, highly trained professional service providers, and modern, reliable healthcare facilities and professionals.

Why should companies obtain IP protection in Barbados?

Access to familiar internationally known brands—everything from luxury goods to food and beverages and basic necessities—makes visitors and resident ex-pats feel more at home. Most consumer goods and food items are imported, and locals have also developed a taste for foreign goods and foods; the value of imports is more than three times that of exports.

While about 1,500 trademark applications are filed in Barbados annually, fewer than 10% of these are made by local applicants, and this gives a good indication of the prevalence of foreign imports from all over the world into the island. That means fierce competition among brand owners for a share of the action. 

E-commerce is common; the internet is a feature of daily life across the island, so there is widespread access to goods and services online. IP rights owners are therefore well advised to protect their brands, technologies and other IP rights from piracy and infringement.

Major IP considerations for ‘setting up shop’ in Barbados

Business owners seeking to take advantage of Barbados’s advantageous business and regulatory regime should ensure that all IP rights that are to be exploited by the new Barbados entity are properly registered in the country of origin as well as in Barbados. This includes primarily trademarks, patents and industrial designs.

Depending on the nature of the business, the IP rights to be used may also include geographical indications, integrated circuits and plant varieties. If the purpose of the new entity is to use trade secrets, then the proper agreements and safeguards must also be put in place.

Before relocating to Barbados, the prudent business owner should seek advice about a range of issues that will impact the ease of relocation, from legal and tax issues to more practical personal issues such as immigration rules, availability of housing and schooling.

Securing your IP protection

The legal issues surrounding relocation or setting up a new business include consideration of protection of IP rights and competition (antitrust) issues. Internet access and the ease of physical travel to and from the island must also be considered. It is far better to secure IP rights ahead of relocation than to arrive just in time to realise that there are prior local rights in place, or to engage in a fight against piracy or counterfeiting.

Always seek local advice about local issues—contact a local IP specialist for specific advice, and make this advice part of the decision-making and budgeting process.

Some common IP mistakes that companies make when relocating

Like anywhere else in the world, there are mostly good law-abiding people in Barbados, but maybe also a few bad apples in the mix. The latter may be deliberately bad, or they may just be ignorant of the fact that they are doing something wrong in abusing someone’s IP rights. Just as care must be taken to protect tangible property, steps to protect intangible property are needed. Treating IP protection as an afterthought can be a costly mistake.

"Prior rights in the major potential regional markets should be clarified before committing to a business plan for relocation."

It is important to think ahead and extend the business plan into the future as well as physically outward into neighbouring potential markets, as a natural growth strategy for the business.

Some people mistakenly think “the Caribbean” is a single legal jurisdiction. It definitely is not, but there are strong cultural and trade relationships within the region. Care should therefore be taken to consider those relationships and the effect they may have on your business plan. Prior rights in the major potential regional markets should be clarified before committing to a business plan for relocation.

Barbados’s IP framework

Barbados is party to several international treaties that require a robust system of protection of the rights of IP owners. There is a solid framework: good legislation based on international norms and standards; a solid regulatory environment; and an honest legal system with an independent judiciary. The legal system is based on English common law.

Local IP laws are compliant with a suite of international treaty obligations including TRIPS Agreement (and some TRIPS-plus) requirements, and provide protections for trademarks, patents, industrial designs, integrated circuits, geographical indications, new plant varieties, trade secrets and unfair competition.

The size of the jurisdiction and the fact that most consumer goods and services are imported mean that many IP disputes are settled abroad and what is sought to be protected is the net result of overseas negotiations, settlements and court decisions. The ability to develop a solid body of local jurisprudence in the area of IP is therefore somewhat limited.

Are there any nuances to the IP system that rights owners should be aware of? What other IP complications might there be for companies that are relocating?

There are some economic factors that slow the pace of achieving registration of trademarks and processing of other applications made to the Intellectual Property Office. This is frustrating to IP rights owners and to the practitioners who assist them through the process. For this reason, a relocating business should start the process of obtaining registration as early as possible.

What help is available to IP owners?

Clarke Gittens Farmer is a full-service commercial law firm which can provide sound legal advice on corporate structuring, commercial transactions, IP protection and litigation matters in Barbados.

Rosalind Smith Millar is the head of the IP department at Clarke Gittens Farmer. She specialises in IP law and real property law, and holds a master’s degree in IP law. Smith Millar has been a member of the local IP Advisory Committee for many years. She can be contacted at: rosalind.smithmillar@clarkes.com.bb 

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