One of the biggest concerns that foreign companies have regarding doing business in China is how to protect their intellectual property. Intellectual property protection continues to be targeted for reform.
And while we do acknowledge the shortcomings and obstacles implied, we encourage foreign companies to not just stick to the rumours of old times. Here is the good news:
Recent changes including the establishment of the State Administration for Market Regulation, which is responsible for governing China’s National Intellectual Property Administration provide greater intellectual property protections than in years past – and today copyright infringement is a risk that can be mitigated through China’s voluntary registration system.
In other words, IP challenges should not prevent doing business in China. Whereas IP challenges remain an issue to address, today the patents, utility models and design protection can better be implemented and acknowledged than before allowing foreign entities to more effectively operate in China.
Why intellectual property rights
Although copyright protection is an automatic right granted in China without the need for registration, taking advantage of China’s voluntary registration system is highly recommended because:
- The issued Certificate offers an extra line of defence by saving the copyright holder precious time, effort and cost in case of infringement and enforcement.
- The issued Certificate serves as prima facie proof of ownership and greatly facilitates enforcement efforts and litigation in China. Witness evidence generally carries lower evidential weight than documentary evidence such as copyright registration certificates.
- Many Chinese e-commerce platforms have adopted a ‘notice and take down program’, which require the proof of IP rights in order to take infringing offers down. By a similar token, a copyright registration can more effectively back up one’s claim in a cease-and-desist letter.
- Patents will help you in marketing and building goodwill in market because people trust patented products.
How to go about it (our view)
Step 1: Our pragmatic experience suggests that in today’s China a foreign small enterprises can consider visiting China before protecting the IPR.
Step 2: Let us assist you in finding the right advisor for you.
Step 3: Engage in the patent or other protection process before you actually do business.
How to go about it (the lawyer advise)
Seek professional / legal advice even before you visit China and discuss the most cost-effective methods to protect your company’s IP in China:
Method 1: Register your trademarks and patent. Witness evidence generally carries lower evidential weight than documentary evidence such as copyright registration certificates.
Method 2: Perform takedowns of infringing products from Chinese websites.
Method 3: Register with Customs as Chinese Customs will not just block the import into China of infringing products but will also block the export of infringing products.
Method 4: Engage a brand monitoring service who will monitor the web for infringing products.
Method 5: Monitor China Trademark Office’s regularly published trademark applications for opposition.
Takeaways
Since China signed the international treaty that protects copyrights in 1992 it has implemented a well-functioning copyright system. Particularly over the last decade we have seen significant progress.
Copyright infringement is a risk that can be mitigated through China’s voluntary registration system and should not prevent doing business in China.
Background
China signed the international treaty (Berne Convention for the Protection of Literary and Artistic Works) that protects copyrights in 1992 and has since then maintained local copyright legislation to regulate copyrights. In general, copyright protection is granted for 50 years from the date of creation or publication whereas to companies (lifetime of the creator plus 50 years for individuals).
Although copyright according to the treaty is protected automatically upon the creation of an original work without the need for registration, we highly recommended that foreign entities register copyrights immediately and prior to doing business in China. This partly prevents competition to register equivalent intellectual property and simplifies the infringement and enforcement process.
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