While intellectual property protection remains a major concern for foreign companies entering China, the situation has improved significantly in recent years. And while we acknowledge the shortcomings and obstacles that remain, we encourage foreign companies to move beyond the rumours of yesteryear. Here is the good news:

Recent changes, including the establishment of the State Administration for Market Regulation, which is responsible for managing China's National Intellectual Property Administration, provide greater IP protection than in the 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 be a barrier to doing business in China. While IP challenges remain an issue to be addressed, patent, utility model and design protection are now better enforced and recognised than before, allowing foreign companies to operate more effectively in China.

Takeaways

Since signing the international copyright treaty in 1992, China has established a well-functioning copyright system. Significant progress has been made in the last decade in particular.

A significant majority of European companies in China (84% - up from 80% in 2023) find China’s written laws and regulations to be adequate or excellent. But nearly half of them believe that they are not adequately enforced.

Copyright infringement is a risk that can be mitigated through China's voluntary registration system and should not be a deterrent to doing business in China.

Background

China signed the international copyright treaty (Berne Convention for the Protection of Literary and Artistic Works) in 1992 and has since maintained local copyright laws to regulate copyright. In general, copyright protection is granted for 50 years from the date of creation or publication, while for companies it is the life of the creator plus 50 years for individuals.

While 84% of European companies in China find China’s written laws and regulations to be adequate or excellent, 46% believe that they are not adequately enforced. IPR protection ranks as a top-three regulatory challenge by 24%.

Why intellectual property rights

Although under the treaty copyright is automatically protected upon the creation of an original work without the need for registration, we strongly recommend that foreign companies register copyrights immediately and before doing business in China because:

• The Certificate issued provides an additional line of defence by saving the copyright owner valuable time, effort and expense in the event of infringement and enforcement.
• The issued certificate serves as prima facie evidence of ownership and greatly facilitates enforcement efforts and litigation in China. Witness testimony generally carries less evidentiary weight than documentary evidence such as copyright registration certificates.
• Many Chinese e-commerce platforms have adopted a "notice and take down" programme, requiring proof of IP rights in order to remove infringing listings. Similarly, a copyright registration can more effectively support a claim in a cease and desist letter.
• Patents will help you market and build goodwill in the marketplace 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 before you visit China and discuss the most cost-effective methods of protecting 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.

A better future for foreign entities

While China's IP landscape continues to evolve, the combination of improved regulations, stronger enforcement mechanisms, and proactive protection strategies now enables foreign companies to effectively safeguard their intellectual property. Success lies in taking preventive action and utilizing the available legal frameworks before entering the market.