Many big corporations you can think of paid their dues when they first moved their manufacturing to China, a country that just had opened up to the modern world while blessed with a consumers market of 1.4 billion people. The dues included infringement on their IP rights. IP, back in the days, was still a very novel concept to the people in this country and consequently laws regarding its protection was not at all in place. Companies have learned the lesson the hard way by losing billions of dollars over knockoffs sold in a local market or some cheap commodities of bad quality in disguise of your brand with confusing spellings.
But the perks of manufacturing in China are undisputedly still very tempting compared with the risk of your IPR being violated. Does it mean it’s an either-or situation?
Not necessarily. Time has changed. China has changed. 40 years of economic development have made its mark on the progress of IPR protection, especially after China joined WTO with the promise of cracking down on IPR abuse. Despite the encouraging establishment of its IPR protection system, unfortunately, loopholes are seen and risks exist. Some self-help will still be needed on your end to protect your IPR when manufacturing in China.
Make good use of the system
The first thing you want to do is make sure you use a PCT (Patent Cooperation Treaty) country. This means that instead of having to file one application at home and then a separate application abroad, your patent will be applied for in an international system that covers all major countries including China. This eliminates additional costs when you are trying to secure patents abroad. In addition, it also improves your chances of being approved because one examiner reviews it rather than multiple examiners separately examining different applications in different countries.
Also just like in your native country, registration of your IP, including your trademarks and patents, is the legal foundation of protecting your IPR. Unlike many countries, China has adopted a file-to-file system as opposed to as a first-to-use system. So do it before you even start manufacturing there. China Trademark Office is not the only place you’ll need to register with. Don’t forget Chinese Customs. Your registration there will serve as the base for them to determine infringement and effectively block its export with adequate information provided, such as manufacturers and ports.
Keep a watchful eye
To make sure you understand what your intellectual property is—you may have a patent, trademark, or copyright without even realizing it. If you want to move forward with manufacturing in China, contact your lawyer to find out which of your pieces of intellectual property will be at risk and how you can protect them; having a legal agreement in place before you begin production will give you much more leverage than scrambling afterward.
Some extra help can be needed in terms of detecting possible infringement. Alibaba/Taobao, as the biggest e-commerce platform in China serving 1.4 billion people, cannot spare the chance of selling infringing products as much as they try. But correspondingly they have established takedown procedures in case you see anything abusing your IPR. If you are new to the market, you can even hire brand monitor service to help you monitor the internet for any possible infringement or even assist in takedowns.
Choose A Good Manufacturer
If you’re in China, finding a good manufacturer is going to be one of your primary challenges. Most manufacturers are new at dealing with IP issues, so they might not be receptive to your demands. In these cases, it’s probably best to shop elsewhere. This might not always be possible or desirable, but if you do have options it’s worth exploring them before deciding on a manufacturer. Once you find a reliable partner and have developed a working relationship with them, create an IPR protection plan that works for both of you.
Shield Works partners with Innopat a leading Zhuhai based IP industry expert to provide our clients with clear no-nonsense advice and IP protection services. We also have a seamlessly designed IP Protection Zone to ensure all your intellectual properties stay in our facility. What happens at SW, stays at SW.
Please feel free to send an inquiry today, should you have any questions.