Intellectual Property in China: Start with the DOs and DON’Ts

How do you protect your business in China? Now, that’s a huge question and one that is not going to be answered in one blog post! But what can at least be identified, are a few fundamentals that can set you, the business owners/managers, on your way.

Firstly, make no mistake, intellectual property (IP) is essential to your business in China. Why? Because IP rights cover use of the things that make your business competitive; your creative innovations, your reputation and your know-how. They determine who can use them and who can’t. Some IP types – such as patents, trade marks and copyright – are registrable; others – such as trade secrets – are not. Protecting your IP involves both registering the rights you can and using other methods like contractual protection (including confidentiality agreements and licensing options); taking steps to protect IP will not only deter others from infringing your rights but also give you means to enforce them should they be infringed. If you don’t register and protect your rights, there is not much you can do if someone copies aspects of your business and starts eating into your market. When developing your IP strategy in China, we would recommend you consider the following DOs and DON’Ts:

DO:

Identify and prioritise your key IP assets. Know which ones are important for your business and how you can effectively protect them.

Register your IP before entering the Chinese market. You can deal with infringement more efficiently if you already have protection in the territory.

Register early. China is a first-to-file system, meaning that if competitors get the opportunity they can, and often will, register your rights first. You may then have to buy back your rights or even face legal action if you start doing business in China. Think of the recent Apple vs. Proview saga!

Consider putting into place protective measures for your know-how, other unregistrable and registrable rights, such as:

  • Signing agreements with business partners which include IPR protection, clearly defining the ownership and transferability of IP.
  • Signing non-disclosure agreements with business partners and employees to safeguard your IPR and business secrets.

Monitor your competitors and the market. Enforcing your rights can be costly so catching infringing actions early can save you time and resources later on.

DON’T:

Presume that your IPR is automatically protected in China if you already have registrations in other countries.

Assume that IPR is only confined to products. Brochures, websites and other promotional materials can be infringed as well.

Presume that because the time to get a trade mark granted in China is very long (24-36 months), it means that there is no real use to apply for a trade mark in China. Again, China uses the first-to file system (as opposed to the first-to-use), which means that the party who files an application first is the one most likely to become the owner of the trade mark. Awareness of these issues is paramount when devising an entry strategy to the China market.

Rely on others to register your IPR for you. Don’t leave this to your sourcing partner or manufacturer; do it yourself with the help of a China-experienced IPR lawyer.

Believe that because you are a small business you will be unable to protect your rights. Registration of rights is relatively cheap and straightforward and there are many enforcement options available; an IP protection strategy can be developed for whatever budget you have.

Hesitate to get in touch with the China IPR SME Helpdesk for free first line, confidential advice. Email us here question@china-iprhelpdesk.eu :)

What are your Dos and Don’ts?

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