How to Protect Trade Secrets in China: a Case Study

fgjMore and more European companies are considering bringing their cutting-edge technology to China, as the market offers many promising opportunities for European high tech companies. However, despite the fact that Chinese IP regime has improved a lot, IP infringements are still commonplace in China and, thus, European SMEs, wishing to successfully  do business in China, need to consider all the possibilities of how to protect their IP in China. Today’s blog post explores the often neglected, but a very useful  way of protecting IP in China – the trade secrets.

Nearly all businesses in all industries and sectors possess trade secrets. Trade secrets are a valuable and highly useful form of intellectual property that are nevertheless often undervalued and overlooked by their owners. This is not least the case in the service sector where the relative value of trade secrets as intangible assets can be extremely high. For example, a logistics firm may not hold any patents or few trade marks and substantial copyrights, but the value of its operations could heavily derive from information contained within client lists and standard procedures.

A considerable advantage for trade secrets is that unlike some other forms of IP rights, such as patents and copyrights that have a finite term, trade secrets can theoretically enjoy an infinite term of protection so long as the trade secret remains just that – a secret. The main difference between protecting something by patent or as a trade secret is that, while technical information is publicly disclosed in patents, it is kept away from the public eye in trade secrets. A trade secret can last forever as long as the confidentiality measures that protect it continue to work. An invention patent typically expires after 20 years.

On the other hand, legal protection of trade secrets is easily lost. Once the information becomes public information, it no longer enjoys any legal protection. As a result, prevention is the golden rule when it comes to protecting your trade secrets, because once your secret is out, there is usually very little that you can do about it. China, like most other countries, provides a legal framework for the protection for trade secrets, and the law provides for remedies in the event that your trade secrets are unlawfully disclosed. Continue reading “How to Protect Trade Secrets in China: a Case Study” »

Bad Faith Trade Mark Registration in China: a Case Study

shutterstock_81193486-520x345It is always important to register your trade mark in China, as IP rights are territorial and European trade marks will have no automatic protection in China. Oftentimes, European SMEs ask their local partners to take care of trade mark registration as local partners already have a good understanding of the registration process. However,  a case study of today’s blog post demonstrates that European SMEs should always be on top of their trade mark registration as local partners may sometimes register European SMEs’ trade mark in bad faith. 

Introduction

Intellectual property (IP) is a key factor in the competitiveness of business in the global economy and it is particularly relevant to the SMEs as they internationalise their business to areas such as China. Although SMEs often have limited time and resources, it is important to be aware of how IP can benefit the business. Besides helping the SMEs to protect their innovations from competitors, IP assets can also be an important source of cash-flow for SMEs through licensing deals, as well as a significant pull-factor when attracting investors.

Even though China’s IPR regime has improved over the years, counterfeiting and other IP infringements still persist in China. Thus, IP protection is of utmost importance when doing business in or with China. SMEs normally start with registering their trade mark in China when starting their business activities. Because they invest time and money into building the reputation of the company, it would be very damaging to business if someone else began using their name to sell their own products or services. Trade mark registration offers protection against infringers, as in most cases only companies with registered trade marks are able to enforce their rights in China. Continue reading “Bad Faith Trade Mark Registration in China: a Case Study” »

Patent Protection Case Study: The Importance of a Robust IP Enforcement Strategy

shutterstock_166598477_blueEnforcing your patent rights in China could oftentimes be challenging as counterfeiters are also getting smarter and more innovative over time. However, if a European SME has a good IP enforcement strategy in place, it is possible to successfully defend your business against patent infringers. In today’s blog post we are taking a look at a case study involving a Spanish SMEs that experienced some issues with patent infringements. This case study shows the importance of a good IP enforcement strategy for the business success.

Case Background 

A Spanish SME in the scientific research and development industry has patents around the world and in China on certain cutting edge surgical instruments. At an international exposition of surgical instruments the Spanish Company discovers a Chinese company advertising their patented products under the name of the Chinese company. The Spanish company obtains flyers and photos of the products. However, the Spanish company is also concerned that the Chinese company might have defensive utility model patents in place. Since, utility model patents are approved quickly (usually within one year) and do require official examination on novelty, inventiveness and industrial applicability, this could potentially bar the Spanish company from entering the Chinese market. Continue reading “Patent Protection Case Study: The Importance of a Robust IP Enforcement Strategy” »

CALISSONS EN DANGER – DES LEÇONS À TIRER ET À RETENIR

Le blogue d’aujourd’hui a été rédigé pour nous par notre expert  en propriété intellectuelle Maître Philippe Girard-Foley de GIRARD-FOLEY & Associates en réponse à la couverture médiatique de l’affaire de Calissons d’Aix. Dans cet article de blogue  Maître Girard-Foley explique le cas en détail et donne quelques conseils sur quelles mesures pourraient être prises pour protéger la marque.

Introduction 

Les médias français résonnent de nouvelles alarmantes concernant l’appropriation des Calissons d’Aix par « la Chine » qui démontrent une grave méconnaissance du sujet. Il paraît urgent de réintroduire dans ce débat un peu de rationalité, ne serait-ce que pour le bénéfice des fabricants concernés et de producteurs français placés dans des conditions semblables de supposée vulnérabilité.

Une marque sans valeur ?

Une marque « Calissons d’Aix » ne vaut rigoureusement rien en Chine sur le plan commercial. Ceci pour la simple et pourtant évidente raison que les mots la constituant sont  incompréhensibles et impossibles à mémoriser pour un consommateur chinois.

La seule valeur de cette marque pourrait être de nuisance, faisant obstacle à l’entrée sur le marché chinois du produit authentique, ce qui serait donc une valeur de rachat.

En termes commerciaux, ce qui compte est (i) la translittération en langue chinoise, basée sur un concept ou sur une analogie phonique, car celle-ci est reconnaissable par le consommateur chinois et (ii) la marque figurative de l’apparence distinctive du calisson. Continue reading “CALISSONS EN DANGER – DES LEÇONS À TIRER ET À RETENIR” »

Enforcing IPR in China: a Case Study

courtEnforcing your IP rights in case of an infringement is one of the key factors of business success in China as the reputation of being litigious eventually discourages counterfeiters from infringing on your products. In today’s blog post we will take a look at how one French garment company dealt with IP infringements and what did the company learn from its experience.

Creative industry goods are valuable not only for their designs but often their trade marks too, and businesses should be aware that intellectual property rights (IPR) infringement can target either or both of these types of intangible assets. However, in actual cases of infringement enforcement processes are not always straightforward, and careful consideration and adaptation of strategies is necessary, as illustrated in this case study of a French garment designer.

Background

A French company “A” entered into a joint venture agreement with a Chinese company “B” in order to manufacture and export a seasonal garment collection to Europe. To minimise costs, the design of each individual piece of clothes was not been protected in China. However the trade mark appearing on the collar label was registered.

“A” was providing their new patterns to “B”, 3 to 4 months prior to the launch of their collection. “B” was then sub-contracting the manufacture of the garments to another factory of which “A” was not aware. The goods were then exported by “B” to “A”, who was receiving the goods for distribution in their stores. Additionally, “A” did not have any local representative in China to supervise and check production and quality.

After two or three collections were manufactured, the quality of the production started going down to the extent that “A” had to refuse entire shipments of goods. As the poor quality of the products was putting its business in jeopardy, “A” was forced to find an alternative way to manufacture the goods. Continue reading “Enforcing IPR in China: a Case Study” »