Protecting your Intellectual Property in China
What is IPR?
It's essential to develop a good, strong strategy for protecting and managing your business's Intellectual Property (IP) before you enter any new market. Protecting your IP in advance can:
- prevent others from profiting from your innovation
- protect your brand
- enable effective, quick enforcement in the case of infringement
- offer opportunities for extra revenues
By contrast, poor IP strategy can undermine the whole of your business in a new market.
What does IPR mean?
Intellectual Property Rights (IPR) are legally enforceable rights over the use of things that you have created. Note that this doesn't just mean the products that you sell – it can also cover promotional materials and branding.
Your first step in developing a strategy should be to identify and prioritise your key IP assets. A good strategy will incorporate both the registrable and non-registrable dimensions of your IPR in a holistic way.
Non-registrable IPR can be protected by a combination of contractual and non-contractual means.
- Include IPR measures in your written contracts with your partners (suppliers, subcontractors, distributors and employees). These may include:
- definitions regarding the nature, ownership and transferability of your IP assets
- non-disclosure clauses
- non-circumvention clauses
- exclusivity clauses
- Develop internal security measures such as limiting access to files and work areas, and dividing work so that no other single party is in possession of the whole of a useable asset (e.g. outsourcing component supply to multiple manufacturers rather than just one).
Registrable IP rights include trade marks, patents, designs and, in some jurisdictions, copyright. They are territorial rights, which means they have to be claimed and asserted in each country individually.
Registrable IPR in China
You should register your IP assets in China before entering the market, and begin the process now. Here's why:
- Even though your IP is registered in another country, it is not automatically recognised as registered in China.
- China is a first-to-file (rather than a first-to-use) jurisdiction. If someone else (a competitor or even a trade mark "hijacker") registers your trade mark or trade name first, you may need to buy back your own trade mark. You may face legal action or seizure if you try to use it. See the case studies at the foot of this page for examples.
Foreign companies without a registered office in China can only file patent or trade mark applications there through a local IP lawyer. But don't leave this to your in-China partners (e.g. a distributor or supplier) to sort out – take direct responsibility for it yourself, and engage a China-experienced IP lawyer. Some UK-based IP law firms have excellent working relationships with Chinese IP lawyers – firms like these are a good place to start when developing your IP strategy for China (see the list of resources at the foot of this page).
1. Copyright
Copyright protection is provided for a wide range of material such as written, oral, musical, dramatic, choreographic, artistic, architectural, photographic, cinematographic, audio-visual, graphic works and computer software. While you do not need to register your copyright for protection, you may voluntarily register in order to prove ownership in China.
2. Trade Marks
A trade mark is a sign which can distinguish your goods and services from those of your competitors. You can register either by filing an application directly at the China Trade Mark Office (domestic application) or by filing an application at the World Intellectual Property Organisation (international application). If you are making an international application, an application must first be made in your home territory before requesting the extension of the trade mark to China.
It can take more than a year to get a trade mark registered in China, but that is not a good reason to ignore the issue. Remember that China has a "first-to-file" system, so getting your application in as early as possible is vitally important – whoever files an application first is likely to be granted the rights to the trade mark. Once an application has been filed and published in the Trade Mark Gazette, other companies have just a 3-month window within which to file their opposition. The China Trade Mark Office puts the weekly Gazette online and you can search it for free (registration required) – if you haven't already, check now (and check each new edition) to see whether any names or logos like yours are pending approval. Monitoring for warnings of possible IP trouble is much less costly than contesting and enforcing IPR!
3. Patents
A patent is a set of exclusive rights granted to the inventor of a technical solution of a product or process for a limited amount of time. There are three different types of patents in China: invention patents, utility models and design patents.
For more information on copyright, trade marks and patents in China, you can download free guides from the China IPR SME Helpdesk.
Some helpful resources
The China IPR SME Helpdesk is a European Commission funded project that provides free, practical, business advice relating to China IPR to European SMEs.
James Love Legal (Harrogate) and DLA Piper (Leeds) are two law firms with good experience helping UK businesses protect their IP in China.
China Law Blog (US based) regularly posts new articles to do with all aspects of business law in China, including IPR. You can join their LinkedIn group here.
China Trade Mark Office is a Shanghai-based Chinese government approved agency dealing with IP. You can search the Trade Mark gazette here, and also file applications (if you have a business registration in China).
Chamber International can provide you with specialised training and support with respect to doing business in China, such as understanding Chinese business relationships, hosting delegations, getting value out of your business trips, choosing a Chinese name, developing distributor networks and in-China marketing. Contact us for more details.
Case studies
A number of high-profile companies have struggled to protect their IP in China – here are news articles about three, by way of example: New Balance, Zara and Michael Jordan.
We can provide training and advice tailored for your business, to help you understand China and develop long-term business friendships there. Contact us for more details.
