Exclusive tips from our IP Expert: top five problems for EU SMEs in China

RvMReinout van Malenstein is our China IPR Business Advisor, based at the European Chamber in Beijing. He speaks English, Chinese, Dutch and German. Reinout has been living and practicing IP law in China for several years, prior to which he worked for a ‘Magic Circle’ law firm in the Netherlands. Reinout speaks to EU SMEs about their IPR concerns on a daily basis.

We asked Reinout: what are the top five problems EU SMEs experience in China?

1. Protection of designs

In the EU, designs are automatically protected for three years. This is different in China, where designs are protected by design patents. In China, if you do not register your design patent before you disclose it to the public in any way (anywhere in the world), it can no longer be protected by a design patent.

2. Trade marks

EU companies often forget to register their trade marks in China. Since China uses the ‘first-to-file’ principle, where the right to a trade mark is granted to the first person who applies for that trade mark, forgetting to register can be potentially dangerous. If your trade mark is registered by someone else in China before you have registered it (i.e. if a Chinese company files the trade mark belonging to an EU company before the EU company files), it can be virtually impossible to reclaim your trade mark unless you can prove that there is a relationship between your company and the company that registered the trade mark. It is therefore advised that companies should register their trade marks as soon as they enter China, if not before.

NB: Companies entering China should not forget to register both their EU trade marks and their Chinese trade marks. Chinese trade marks are necessary because Chinese consumers typically assign foreign brands with Chinese names. For more information on why you should choose a Chinese trade mark, read our blog on ‘Choosing a trade mark in China.’

3. Copyright

Copyright is an automatic right. However, in China, in order to prove that you are the author of a work, that work must be registered. This is a requirement derived from Chinese evidence law. It is therefore recommended that companies should register their copyrights in China before they unveil a work to the public.

4. Invention patents and utility model patents

Since Chinese companies can freely access patent information in Europe and the USA, it is advised that companies register their invention and utility model patents in China before their inventions are released anywhere in the world. Furthermore, if you do not have a patent in China, you are unprotected against reverse engineering – which is permitted where inventions are not protected by a patent.

EU SMEs often believe that it is better not to disclose patent information in China by not applying for a patent. However, when asked, most EU companies admit that they would apply for a patent in Europe and/or the USA. By not registering a patent in China, a company is essentially endorsing the use and replication of their invention free of charge. As mentioned above, if your invention or utility model is disclosed to the public before it has been patented (i.e. it is no longer ‘novel’), it is no longer possible to apply for a patent.

5. Trade secrets

EU SMEs are sometimes fairly lax about signing non-disclosure agreements (NDAs) with Chinese companies. This is because Chinese companies occasionally inform foreign companies that business does not work like this in China – for cultural reasons.

However, Chinese law states that a trade secret is only protected if it is: a) unknown to the public; b) protected by contracts; c) covered by NDAs. It is therefore advisable for EU SMEs to request that third parties sign correct NDAs before any sensitive or confidential information is disclosed during meetings.

For more information, keep an eye out for our forthcoming podcast, where we speak to Reinout about these issues in more detail.

Guides relating to design patents, trade marks, copyright, invention and utility model patents and trade secrets can be found on this page of our website.

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