Trademark protection is nowhere more important than in China. Although innovation is now stressed in China, imitation and copying have a long tradition. Unfortunately, no industry is spared from trademark infringement and counterfeit products.
The effects of poor intellectual property protection can leak over China’s borders, such as when counterfeiters attempt to register unprotected trademarks abroad. It is not sufficient to rely on international trademark laws; anything worthy of protection should be registered in China to allow for effective prosecution of counterfeiters. Our experience has shown that fighting infringement is a much more expensive process than registration.
Registering your trademark is the most important and most effective way to protect your intellectual property in China.
Unlike in Western countries, competition laws only provide limited protection against counterfeits in China.
In principle, taking action against ongoing or completed registrations can be possible, and the respective procedure depends on the property right that is affected.
While there are still many complaints concerning intellectual property rights, the environment seems to be improving. In particular with regard to trademark infringements, reports about successful legal actions have increased. Chinese authorities are in part described as very cooperative, and the abilities of Chinese officials and judges have improved, especially in Shanghai and Beijing.
In addition to registering intellectual property rights with the related Chinese government department, you should also consider the registration of your property rights with Customs. Our clients on several occasions have found this to be useful.
Moreover, you should give your intellectual property optimal protection by considering the scope and contents of your contracts (e.g., clauses covering non-disclosure, non-competition, penalties and arbitration). This applies to joint venture agreements as well as contracts with suppliers, agents, licensees and employees.
Business partners should be assessed for their reliability in helping you to protect your intellectual property. This applies to joint venture partners as well as licensees, suppliers and agents. You should carry out comprehensive partner due diligence and, if possible, meet in person and see your partner’s premises before you commit to cooperation.
Foreign companies have often seen their technical products copied by Chinese companies and delivered to Western countries at very low cost.
Although laws at the destination country may allow the intellectual property owner to prohibit a local distributor from selling the infringing Chinese copies, it usually loses this distributor as a customer. The foreign company would be more successful if it took action against the Chinese counterfeiter directly in China. Counterfeiters are often easy to track down on the internet because they usually have a comprehensive website that displays their counterfeit products. However, many foreign companies have failed to register their new products in China, so legal action there is only possible in exceptional cases.
Register your patents in China at the earliest possible stage. We recommend that you develop a long-term patent strategy for the Chinese market early on, and are available to help you to do so with our experienced partners who specialize in intellectual property protection.