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back to index backGLOBALtalk October,  2005


Practical tips for protecting intellectual property in China

Despite attempts to improve the intellectual property protection environment in China, worries about privacy and infringement inevitably top the list of concerns raised by foreign companies preparing to do business here.

Although there is no way to guarantee the security of your technology or trademarks in China, there are steps that can be taken to limit the potential harm. As always with China, knowledge of the environment and adequate preparation are two of the keys to success.

•  Recognize that you will have to be pro-active and assertive in protecting your intellectual property rights in China. Enforcement mechanisms cannot always be relied upon to offer assistance or redress.

•  Budget for IP protection and enforcement, recognizing that it will be a bigger cost than might be elsewhere.

•  Maintain a constant dialogue with potential and actual Chinese partners. Make sure that they understand your position on IP protection

•  Make sure that you have strong confidentiality and non-disclosure clauses in all agreements, letters of intent and memoranda of understanding. Also ensure that you have confidentiality agreements in place with all employees.

•  Register all trademarks, patents and copyrights

•  There is a voluntary copyright registration system available in China. Take advantage of it.

•  Trademarks do not have to be in actual use in China in order to be registered. Given the length of time it takes to register a trademark, begin the registration process well before establishing a presence in China.

•  Registration of intellectual property provides strong evidence of ownership when swift enforcement is required.

•  Do a trademark search well in advance of your entry into the China marketplace. Trademarks that have been unfairly registered can be expunged.

•  Choose a Chinese trademark or trade name for your product that makes sense in relation to the product before the consumer does it for you.

•  Register your intellectual property with customs. They can be on the lookout for pirated products and can react more quickly if you require enforcement.

•  Remember to register any IP Licenses or Technology Transfer Agreements with the Ministry of Commerce. Failure to do so will likely render them ineffective and unenforceable.

•  Make products with features that are difficult to copy. Even if infringement occurs, the consumer may not be fooled.

•  Strategically decide what aspects of your technology need to be disclosed in order for your venture to be successful in China. If you can leave the rest of the intellectual capital at home, do so. Make sure that any sensitive or important IP information is disclosed only on a need to know basis.

•  If you need to seek enforcement at the court level, look for an infringement in Beijing or Shanghai so that you can get before one of the specialized tribunals.

Source: China Alliance – China Notes newsletter - GAI


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