How to Protect Your Intellectual Property in China
In this post, I will provide some practical suggestions for protecting your intellectual property rights in China.
First of all, I want to say that dealing with most Chinese suppliers is pleasant, but it is best to protect yourself by following some basic agreements, which will help you avoid losing control of intellectual property rights.
What Intellectual Property-IP can be Protected in China?
Trademarks, patents, copyrights, trade secrets, geographical indications, and plant breeders’ rights are all recognized forms of IP that can be protected under Chinese law.
Generally speaking, three places may leak your product IP in China
- The manufacturer leaks your information.
- Other Chinese manufacturers imitate your products and sell them on the market.
- Your competitor steals your design and makes it in a Chinese factory.
How to Protect Your Intellectual Property in China
For those companies that are already doing business in the Chinese market, it is never too late to review your intellectual property strategy to ensure that it keeps pace with your innovation and market expansion and provides the best protection for your core intellectual property.
Register your intellectual property rights in China
China is the first country to register. This means that if you have a cool logo or design, but it is not available for registration in Beijing, then anyone can register it, and you have to pay them to get it back.
If you register in China ahead of time, the Chinese courts will treat it fairly even if it is a foreign company. In the past few years, China’s legal system has made progress in registration and has a fairer playing field in court.
Now there is more good news:
If you hire an English-speaking lawyer in China, you don’t need to spend a lot of money registering your intellectual property in China. So the cost of litigation in China is only a tiny part of that in China.
Reduce contact during the inquiry period(RFQ)
When you request a quote, you may interact with many suppliers in China to quote, but in the end, you may choose one to get your business.
For the time being, those guarantee agreements with suppliers you have not chosen will not prevent them from using your intellectual property rights, and all these suppliers are also very difficult.
For example, use “they have a price product” instead of revealing your secret formula.
Bigger, if you are worried that your suppliers might steal your intellectual property rights, you need to know that there are companies with contracts in China, and you can hire them as your “black box.” In this way, your designated sub-supplier sends various components to the final and final marked black sub-collection. In this way, almost no supplier can watch these combinations and know nothing about your logo and design.
Sign an Enforceable Chinese contract
Use understandable and straightforward clauses in bilingual contracts. I found that many conflicts come from the explained Chinese contract. It is not that the supplier deliberately violated the terms of the agreement because it turns out that they did not understand the contract from the beginning.
So keep it simple, write in Chinese, and confirm that the supplier has read and understood it. Most of my suppliers are honest people. We generally won’t have any problems if they know the terms of intellectual property before starting production.
Is China’s Intellectual Property Protection System Really Working?
Effective protection and enforcement of intellectual property rights are critical to China’s successful transformation into an innovation-driven economy, which provides a strong impetus for continued progress in this field.
Since joining the World Trade Organization in 2001, China’s intellectual property protection system has developed rapidly and is now basically in line with international standards. Significant progress has also been made in law enforcement through measures such as establishing specialized courts and tribunals for intellectual property rights in first- and second-tier cities. Therefore, as long as intellectual property rights are properly registered or granted in China, it is possible to implement intellectual property rights in China.
When Do I Need to Start Registering an IP in China?
China implements the first-to-file principle for trademark registration. This means that the first entity to register a trademark in China will be granted ownership, regardless of whether it has been used before. This is a key difference between Canada’s and China’s IP systems, which must be considered in the IP strategy in China.
Malicious third parties can easily register Canadian/US companies that do not register their trademarks in China on time. This may be an overlord who intends to sell the brand back to a Canadian/US company at a high price, or it may be a company that wants to use the Canadian/US company’s brand awareness in China to produce and sell products. In the end, the company could prevent the Canadian/US company from selling its products in the Chinese market and even file a lawsuit on the grounds of trademark infringement. Although there are ways to deal with this situation, the fastest, safest and cheapest course of action is to register early.
The patent is granted based on the prior application. Therefore, if other conditions are the same, whoever applies first will receive patent protection. After you file your first patent application for an invention, whether in Canada or elsewhere, you have 12 months to apply for protection of the same invention in other countries (including China). After that, the invention will no longer be considered new. Therefore, it is important to keep China in mind when filing the initial patent application.
If My Intellectual Property is Successfully Registered in China, Will I be Fully Protected in China?
Although registering intellectual property rights in China, it may not be enough to prevent infringements. Monitor the Chinese market and your existing export markets to ensure that your products will not be copied to your customers.
Ensure good communication with suppliers and supervise the activities of distributors. Ensure that there are clear contractual, intellectual property protection clauses between you and your partners, distributors, licensees, or employees, including ownership and usage restrictions.
How Should I Enforce when My Product is Infringed in China?
Since intellectual property rights are personal rights, it requires action by the right holder. When foreign companies encounter infringements in China, they should seriously consider protecting their intellectual property rights based on a detailed case analysis.
In China, there are several ways to strengthen your rights and prevent unauthorized use of your IP.
- Intellectual property rights can be registered with the General Administration of Customs to prevent infringing products from being exported from China.
- In simple cases, city administrative law enforcement can be a relatively quick and cheap way of action to stop infringing activities.
- Civil litigation can be used, especially when seeking damages from the infringer.
- China also provides intellectual property remedies for large-scale commercial piracy and counterfeiting through criminal enforcement.
- Some e-commerce websites in China are allowed to request that the list of goods be deleted infringe the intellectual property rights owner.
Before mastering any method above, one must first understand the knowledge and expertise of the Chinese legal system. Try to communicate with a professional lawyer to get more accurate information.
Developed by Canadian Intellectual Property Office.
Chinese Supplier View-Intellectual Property Protecting
And Chinese suppliers do have some other opinions about protecting intellectual property in China.
I’m in manufacturing, and I can safely say we have very little interest in stealing your IP. Selling it on our own requires a completely different skillset and is basically equivalent to starting a new company from scratch. Selling the idea to competitors may make some money, but it is trivial compared to the value of lost manufacturing contracts.
It’s actually really easy to reverse engineer things. I don’t know how many times customers have sent us incomplete or just plain wrong drawings and I’ve personally had the reverse engineer their product to make it for them. Your competitors can reverse engineer just as easily.
If you want to protect your IP, lawyer up. If you are manufacturing domestically, then your designs can be made proprietary. If you manufacture over seas, you can’t really enforce patents overseas, but you can still enforce them once they hit market.
According to our experience, it is challenging to prevent manufacturers from secretly manufacturing your products. If your product sells well, there will be many manufacturers competing to imitate it. The important thing is that you hold a patent or market license for your product. In this way, other sellers cannot sell your products on the market.
Finally, if you want to protect your intellectual property rights in China, please ask a lawyer. If you produce domestically, then your design can become a patent. If you produce overseas, you hard to enforce the patent overseas, but once the products enters the market, you can still enforce it.