One of my clients asked me a question, which I believe is a common concern:
“How can we protect our IPR effectively in China?”
The following was my answer:
1. First of all, register your IPR in China, ASAP. All IP laws & regulations in China are based on the protection for legitimate registered IPR. Furthermore, for IP registration, China operates a “first-to-file” system, which means, whoever first applies for IPR will be granted ownership. That means if you want to protect your IP in China, you should register it in China.
2. Sign an NDA or similar contract with your partner. Whether you want to sell, buy, or manufacture in China, make sure you sign a Non-Disclosure Agreement (NDA) or a contract with NDA clauses with your partners, who are probably your distributors, suppliers or local staff. In the NDA, you may specify that a penalty will be payable once either party breaches it, no matter if any actual damage has be made. Word of advice, it is vital to find a good partner, worst NDA +best partner is better than best NDA + worst NDA. Due diligence or IP audit is necessary when you choose your partner.
3. Register your IP with China customs. Though an NDA may work with a partner, you can’t stop any third party by signing an NDA with them. However, according to Regulations of the People’s Republic of China on the Customs Protection of Intellectual Property Rights, you may register your IP with customs to stop the infringed upon goods being shipped out of China.
4. Finally, but not less importantly, you may resort to the following procedure to stop infringement: civil litigation, criminal prosecution and administrative action. Different procedure has different effect; you had better consult your local lawyer before you do any of them.
Sophie Mao is Sr. Partner at AsiaBridge, a Guangzhou based law firm offering Intellectual Property Protection, Bilingual Contracts, Mediation and Litigation. Sophie is based in Guangzhou.