8 Ways to Protect Your Intellectual Property Rights in China
China is notorious for its copyright infringements and intellectual property thefts.
This is partly due to its sloppy intellectual property law and partly due to the weak enforcement of the authority.
Intellectual property rights infringement has also been a key point in the US-China Trade War.
In recent years, the Chinese government seeks to encourage innovation and improve the country’s business environment, and there have significant improvements. The IP law is revised, and a new national IP appeals court is established.
Current IP protection measures in China:
- Force the infringement to stop immediately
- Confiscate illegal gains from the infringed products
- Impose a penalty on the infringer as required by the law
- Require the infringer to compensate the rightful owner the amount they request
However, there is a “Chinese paradox”. There is a quickly developing legal framework that offers protection for businesses’ Intellectual Property, yet counterfeiting and piracy technology is also developing at the same rate, sometimes even faster. Therefore, foreign businesses are still reluctant to face the potential infringement of IP rights when expanding into China.
How IP rights infringement in China happen?
IPR violations in China happen just like in any other country. It is only more rampant due to the weak legal framework and the lack of consideration for IP rights from the authority.
Infringers and counterfeiters can take advantage of the procedure loopholes to get away with their IPR violations. Or worse, they can seek to invalidate legitimate IP rights. In other words, they try to make the invention theirs, while dismissing the true owner’s rights. Piracy and counterfeiting technology is constantly improving, making it significantly harder for companies in the battle against IPR infringement.
How can companies protect their Intellectual Property Rights in China?
To protect their Intellectual Property rights, companies need to develop a comprehensive strategy. Investment in risk management measures ensures that your company is operating in the safest conditions possible.
1. Intellectual Property Registration in China
This is the very first step that all companies should take when entering such a risky country as China.
There is no universal Intellectual Property law. Each country has its own legal system for IP protection. This means that all Intellectual Properties, including copyrights, patents, and trademarks, are only valid within the country they are registered in. Once you go to a new country, you need to register everything again from scratch.
Without registering your Intellectual Property, you will no protection in China. In order to register your Intellectual Property, you need to file an application to the authority in charge.
Patents need to be properly translated before filing. For example, if you have a patent for an invention or process that you develop, you need to translate that patent to Chinese before applying it to the Patent Office of China National Intellectual Property (CNIPA).
All patent registration process starts with preliminary search and application availability analysis. After it is confirmed that the application is eligible for examination, you can pay the patent application fee and submit additional papers. It can take approximately 1-3 years for an invention patent to be approved, while design patents take only 6-9 months.
A patent is valid for 10 to 20 years.
Copyright is automatically granted upon creation, However, you can gain an advantage in case a copyright infringement occurs by registering your copyright. An official copyright certificate protects your creation and proves that you’re its rightful owner.
It takes a few months to have your copyright registration approved. Copyright is valid for an indefinite period or the entire life span of the author.
Trademarks include logo, brand name, and slogan, and any other recognizable design associated with your business. It takes approximately 10 months to have your trademark application approved. A trademark is valid for 10 years.
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2. Understand the "first-to-file" principle in China
The “first-to-file” principle is different from the “first-to-use” principle in the US.
The “first-to-file” principle essentially means that the first person to file the trademark application is awarded the right to claim the intellectual property rights to it.
It doesn’t matter whether you are the true owner or not. Just because your brand is recognized in 20 other countries doesn’t mean you have protection over it in China.
This has resulted in some bad faith registrations, in which a person with ill-intent registers a trademark currently used by others, then resell the ownership right to the true owner at a higher price.
Unfortunately, the owner has limited options to protect themselves.
They can file an opposition with the CTO. However, it is a very lengthy, time-consuming, and costly process, and many are so fed up with the bureaucracy in China that they go for the other option: paying the ransom to the bad-faith owner. Many true owners ended up paying the ransom for their own brand. Therefore, the faster you can register your Intellectual Property in China, the better.
3. Develop a brand monitoring team
Even when you have successfully registered all of your Intellectual Properties, you still will not have full protection over them. You are still at risk of IP theft.
Many businesses will go as far as to develop a brand monitoring team. This team scours the far corners of the web to see where your brand is being mentioned. Normally brand monitoring aims to generate insights about what the audience thinks about your company, but in the IP protection context, brand monitoring also aims to catch unauthorized brand usage on the web.
A brand monitoring team in China will:
- Check Search Engines (Baidu)
- Check Social Media Sites (WeChat, Weibo)
- Check forums
- Check review sites
- Check news sites
- Real-life investigation
All of this was done to ensure that there is no copycat of your products and inventions on the market.
4. Register your trademark in Chinese characters
There are 3 reasons for you to register your trademark in Chinese characters:
- Your trademark in Roman characters isn’t valid in China: Your trademark only offers protection in the country it is registered in. If you want to gain international protection for your brand, you must register it in the country you wish to be protected, in this case China. You should include both your English brand name and your Chinese equivalent in your trademarks.
- Engage with your Chinese customers better: a localized brand name is essential to connect with your Chinese customers better. However, a poorly localized brand name can have an adverse effect on your reputation, so it’s wise to be cautious when translating your brand name. Many brands choose to translate their brand name based on the pronunciation or the meaning of the brand. The latter is the more common.
- Protect your brand against counterfeiting: Counterfeiting is rampant in China. Without a registered trademark in China, your product is very likely to be copied on sites like Alibaba. Moreover, with a registered trademark with the CTO, you will also be able to register with China Customs. If the Customs find counterfeit products at the border, they will immediately seize the products and contact you immediately
5. Educate your Chinese employees on IP protection
Another reason why IPR violations are so widespread in China is that IP awareness among Chinese people is so low.
Chinese people don’t value a brand as highly as we do. This is the consequence of years of weak legal enforcement and a lack of education on IP rights.
If you have Chinese employees, it’s necessary to educate them on the value of Intellectual Property rights and why they should work hard to protect the IP of the country that they work for. With eLearning and training courses, it should be easy to show them the confidentiality requirements of your company and the consequences of IP violations.
Another way to protect IP in a company is imposing restrictions on your employees. Only high-ranking directors, managers and the C-suit can gain access to sensitive and critical information about your business. When an employee is leaving, prepare an exit interview to recover those materials and educate them one last time on the confidentiality obligations that they have to adhere to.
6. Develop your branding strategies as fast as possible
The most foolproof way to stop others from faking your products is by showing them who you are. Let them know what your brand is. Chinese customers don’t care if you’re a famous brand in the world or not. All they care about is what you can bring to them. If your brand is loved by millions of people in the West, but is unknown in China, you’re not going to survive.
Try to appear as much as possible on social media sites. China is a country with a strong online presence. Up to 70% of its population has a social media account and you have no other choice but try to build up your following on these channels.
China is indeed a fascinating country to do business in. However, Intellectual Property infringement in China is so serious that many foreign businesses are afraid that their inventions will be copied. Nevertheless, the allure of China is too great to ignore, and we need to find ways to adjust ourselves to the “China way”.
Do you have any experience with IP rights in China? Feel free to share with us in the comment section below.
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