Category Archives: China IP Basics for SMEs

Engineering Success: China IPR in the Mechanical Engineering Sector

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China’s economic success has been built on a foundation of manufacturing on a massive scale. In 2013 Chinese machine industries netted global revenues in excess of EUR 678 billion, with growth of around 20% on the previous year[1].

This success, resulting in a reputation as ‘the world’s factory’ has made China’s demand for machinery, tools and related technologies insatiable, making it a fantastic potential marketplace for Europe’s high quality products and innovative technologies.

Unfortunately, rampant transgressions upon foreign IP by Chinese infringers in the past has left a black mark on China’s history, leaving potential importers and manufacturers wary of doing business in the country. It has been estimated that German mechanical engineering companies alone suffer a combined loss of approximately EUR 7.9 billion due to product and brand counterfeiting[2].Mech Eng 1

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“Fashions fade, Style is eternal”

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Today’s post has been kindly drafted for us in the offices of De Tullio & Partners, Intellectual Property Attorneys, Bari, Italy.

Managing partner and friend to the Helpdesk Mr Elio De Tullio, together with his associate, Mr Giacomo Bucciarelli, have put down in writing what they have experienced to be the main problems faced by SMEs in the fashion industry, along with their top tips on how to adequately protect and enforce their rights in China.Credit: Henry Jose, click for profile

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IPR and the Fashion Industry in China

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The fashion industry encompasses the design, manufacturing, distribution, retailing, marketing and promotion of clothing, footwear and accessories and is worth billions of Euros every year.

While the fashion industry initially developed in Europe and the United States (the Italian footwear industry is one of the largest in the world and the textile industry is one of the United States’ most important employers in the manufacturing sector), today, fashion is an international and highly globalised sector.

China’s fashion industry, for instance, is set to become the world’s second largest fashion market by 2020, with sales expected to reach over RMB 1.3 trillion (EUR 182 billion) – roughly three times their current level.[1] According to the Boston Consulting Group, China will account for 30% of the global fashion market’s growth over the next five years.[2]

China therefore represents both opportunities as a manufacturing hub and a maturing consumer market, and risks, as a potential source of counterfeit merchandise. In order to avoid potentially damaging losses, EU SMEs operating in the fashion industry should take important measures to protect their intellectual property rights (IPR) in China. This blog outlines relevant IPR protection strategies in China, of particular relevance to the fashion industry.

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No Squatting: Online IPR Protection in China

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shutterstock_167099189China possesses a population of over 1.3 billion people;[1] of these, there were 632 million internet users in China by the end of 2014 – this is approximately half the population of China and three times the number of internet users in South-East Asia.[2]

The share of internet users in China now equals 46.03% according to the state-administered China Internet Network Information Center (CNNIC). [3] Trends also suggest that internet use in China is set to experience further growth in coming years.

E-commerce is well developed in China today, and is predicted to account for around 10% of total retail purchases by the end of 2015, in contrast with 6 to 8% in Europe.[4] Furthermore, a study undertaken by KPMG predicts that as wealth, internet penetration, brand awareness and loyalty spread, online retail in China is also set to expand.[5]

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