Despite major improvements in China’s IP laws and regulations in recent years, counterfeiting is still commonplace in the country and European SMEs wishing to do business in China need to adopt robust IP strategies in order to succeed on China’s lucrative market. In today’s blog post, we are taking a closer look at what are some extra IP protection measures besides registering your IP in China that European SMEs, engaged in cosmetics industry, can take to minimize the risks of counterfeiting.
As with companies in any economic sectors, cosmetics firms have much to gain from early protection of their IPR. Registering IP with Chinese authorities and customs before beginning any type of business activity in the country potentially saves SMEs lot of money as being able to build strong cases against any local firms which may try to steal their IP is only possible when IP is registered in China. Many would-be infringers, however, will move straight to counterfeiting and begin to create knockoff products in the hopes of profiting from SMEs hard work. In these cases, early IP registration is not always enough. Instead, complementary to early IP registrations, SMEs should also adopt a strategy which seeks to defeat counterfeiters through both attrition (by making counterfeiting extremely difficult to accomplish) and offensive action (by coordinating with authorities to conduct raids and launch investigations to halt infringement).
“Soft” Prevention Methods: IPR registrations, online sweeps, and consumer education
An SME’s first step in fighting counterfeiting should always be prevention, halting counterfeiters before they have a chance to create fake products, which will erode an SME’s profit margins and public goodwill. To this end, nothing is more effective than registering IP early. Registering trade marks, industrial designs, patents, etc. with the relevant Chinese authorities can give SMEs powerful legal recourses in the case of an infringement. For larger counterfeit manufacturers with proper factories capable of churning out thousands of counterfeit products a day, the risk of seizure of assets by administrative agencies or customs and awards of damages (or jail time) from People’s Courts pose a significant deterrent. Continue reading “Dealing with Counterfeiters in China’s Cosmetics Market” »