With a number of years of operating the China IPR SME Helpdesk under our belt, we’ve seen many changes to the types of enquiries we receive, as sectoral trends shift and businesses adjust to a changing IPR environment.
However, certain enquiry and case profiles persist – it seems that many businesses still hold the view that they face lower risks in China, and accordingly pay less attention to IP, only to realise their shortfalls too little, too late.
Here we look at some common misconceptions from those that think the risks are negligible….
I do not sell in China or Asia, therefore I only need basic protection.
This misguided notion applies to both those who manufacture in, but sell their products outside of China, and those who have no operations within the country but produce something that has potential for the Chinese market. The problem lies in the fact that for many enterprises basic protection is considered automatic, meaning one does not need to register anything. How can this be?
Copyright protection is commonly seen as the most basic protection one can have, and in the majority of countries (including Europe) it’s automatic and does not require registration – only the clear assignment of the creator or rights holder. It is free and easy, and will protect creative works and designs.
For China, however, it should be noted that a copyright registration facility are available in addition to automatic protection. And there is good reason to make use of this.
Will your copyright be protected without registering? Yes ….in theory. In practice though, you may not get the same level of protection, in so much as enforcement may be more time consuming and costly, if you are able to reach a positive outcome at all. With a registered copyright you will at least be able to rely on evidence of ownership from the date of application, which can make enforcement actions a good deal easier.
China offers copyright registration, so use it!
The added bonus of possessing registered copyright protection is that it can act as ‘back-up’ for other types of IP. For instance, if your trade mark application has not yet been approved and the mark is stolen, you may present the case under copyright infringement. Or if your packaging design is infringed you may draw on copyright as well as design patents.
Our trade mark is not well-known: most people would not recognise it, so infringers would not bother to copy it.
We’ve seen many cases of trade marks being infringed which are by no means well-known. It’s useful to remember that a trade mark is not always only valuable because of a brand’s reputation – your mark may be considered a very good representation of the type of goods or services in its own right, so worth stealing. Or someone may simply register a mark for the future possibility of selling it back to the owner – ‘squat’ a trade mark. Thus being ‘not well-known’ is no rationale for not registering in China before you start doing business here (or even think of doing so in the future).
What’s more, if it’s less well-known it could potentially be harder to prove that it is yours, and you certainly wouldn’t be able to rely on the provision for “famous” or “well-known” marks under Chinese Law. In cases of infringement it’s necessary to provide evidence to show that you have previously used the mark, and as a general rule of thumb Chinese courts love piles of paperwork and assorted documents to demonstrate such use. So keep everything you can from the earliest date of use (in addition to registering your trade mark!).
We do not produce consumer goods, so are products are less visible to counterfeiters and there is less incentive to counterfeit our products.
Although China has become famous for it’s countless fake hand bags, watches, DVDs, etc., a large amount of the enforcement enquiries we get at the Helpdesk are from machinery and component manufacturers – non-final products which are part of larger supply chains – who discover others have stolen their designs and are now edging into their supply chains.
Consider the details for a moment. In some ways to steal the market position of a business-to-business company, such as a component manufacturer, is more straight forward than that of a consumer goods company: no need to acquire retail partners and arrange customer service provisions with them, nor have the marketing capacities and know-how of a consumer goods firm, and what’s more the bulk of the orders may only come from a handful of major buyers. Add to this the relative ease with which one can find partners online nowadays.
The notion of being less visible to counterfeiters is also in many cases a mistaken one, given that counterfeiters frequently come from within the company in question. For many of the cases we provide advice on it’s an individual or group working in the Chinese operation that steals the designs or overruns production, then contacts the original buyers directly. The valuable information and ideas may have only been circulated amongst a handful of people. Thus a nod to signing non-disclosure agreements (NDAs) is also warranted here – partners should always sign ageements prior to viewing anything of innovative value that is not covered under formal IP measures (not to mention including non-disclosure clauses in employment contracts).
Forget the big stories of world famous brand infringement – IP theft happens to both large and small, famous and unknown companies and no business should consider itself immune to the threat.
For more information all the types of IP in China, as well as other ways to protect your business, such as through contracts, check out the Helpdesk guides here.