IP Protection in China - getting better all the time

07 March 2014

Haseltine Lake’s Chief Executive, Lesley Evans, talks about IP Protection in China. The thought piece is part of the February/March edition of the South West  Business Insider Magazine on the topic “International IP” (pp 37ff)

We’ve all heard the horror stories about British businesses experiencing counterfeiting, technology-copying and corporate identity theft in China but these stories are becoming less common. This is partly because British businesses are now  more savvy and partly because the IP protection and enforcement regime in China has become significantly more reliable. Haseltine Lake has been working to protect and support the IP rights of UK businesses in China for more than a decade now and has had an office in Guangzhou since 2009. During that time we have seen increasingly strong support from the Chinese government at national, provincial and municipal level for upholding and enforcing IP rights including the rights of non-Chinese entities.

There’s a Chinese proverb about a man with a straight flu who used to store his wood near his stove. His neighbour warned him that this was a fire risk, but only after his house caught fire and considerable damage was done did he curve his chimney and move the woodpile. In Mandarin, the expression “to curve the chimney and move the firewood” means to take timely preventative measures. The sorts of preventative measures that can be taken to protect your IP in China are very similar to the sorts of measures you would take in Western countries although there are also a few extra options and remedies available in China.

There are three standard elements of protection – your due diligence, your contractual framework and your registered rights. Make sure you research the market carefully including checking existing IP rights such as trademarks, designs and patents. Don’t try to launch a product in circumstances where it may conflict with existing rights that are registered in China. Also conduct careful checks on any manufacturers, distributors or agents that you plan to work with.  Take up references from other international businesses that they have worked with and ask specifically if there have ever been any IP infringement issues.

Contractually – make sure you use a reputable Chinese lawyer and that all forms of IP including know-how and trade secrets are expressly protected. Be careful when entering into “standard” agency or distributorship agreements or university research contracts as these may contain clauses which limit your IP rights.

And finally – be sure to register your IP rights in China. A UK patent or trademark is not enforceable in China – you have to register these rights within the Chinese system. Chinese rights are relatively inexpensive to register as compared with comparable costs in Europe and America and once you have registered Chinese rights there are some additional remedies available to you. One effective step is to record your registered Chinese rights with Chinese Customs (GACC). They can then seize counterfeit goods before they leave China thus potentially preventing shipment of infringing goods to your markets in other parts of the world. 

Lots to think about – but no more so than in many other locations – and so long as you curve your chimney and move your firewood you should be able to avoid IP disasters!

Click here to purchase the magazine: 

http://www.insidermedia.com/productsandservices/archive/swbi/index.html

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