The Misconception about IP in China
The Chinese economy has progressively shifted from a period of hyper-speed growth based on low-cost mass manufacturing to one of moderate controlled growth based on high added-value economic development. Moreover, Chinese consumer market keeps expanding and demand for high-quality goods and services is steadily growing. In May 2017, President Xi Jinping announced at the Belt and Road Forum that China would hold a China International Import Expo (CIIE) starting from 2018. From November 5th through the 10th of this year the new National Convention and Exhibition Centre in Shanghai will host the first China International Import Expo https://www.ciie.org/zbh/en. With 2,800 companies from over 130 countries and regions, it is already branded as one of the most important trade gatherings in the world, representing another step forward in China’s drive for economic globalization. It is also a significant indicator of China’s intent to continue to open its markets further, creating opportunities for businesses from around the world. Because Chinese law is also fast evolving, we at DaWo Law Firm have put together a series of short primers, introducing some essential features of Chinese law relevant to participants at the CIIE.
First among the issues any company should consider when participating in a trade show such as the CIIE is protecting what is often the most valuable asset of a business, its intellectual property (IP). Commonly held beliefs about IP in China are best summarized by the well-known catchphrase: “In China, copyright means right to copy!” This refers to a strongly held belief, amongst businesspeople outside China, that IP simply cannot be protected in China.
Granted, we may need more than this short feature to convince you that this belief is just plain wrong. However we would like to at least leave you with an impression that there’s definitely something going on in relation to IP and China, and that it may be high time for you to reconsider your opinions on the subject. Here are some raw numbers: 18 is the number of specialized IP tribunals throughout China. These tribunals decided 225,678 cases in 2017, with trials averaging only four months in some places. Less than 10% of these cases had at least one foreign party involved, which leaves more than 90% of the cases being handled involving only Chinese parties – who said the Chinese don’t care about IP? Here’s another number: 10 million. That is the amount (in RMB) that three Chinese shoemakers were ordered to pay New Balance for copying their mark in 2017. One more number: 65/65. That’s right, foreign plaintiffs won 65 out of 65 cases before Beijing’s IP tribunal in 2015. We can all agree that is a decent success rate. On top of these numbers, penalties for infringement continue to get much more stringent.
Obviously, there are a number of measures that you must undertake to make your rights enforceable in China, starting with the most obvious one, which is to register your IP in China. Without registration you will not be able to protect your rights in China, as those rights will not have been legally vested in China. So, before you attend the CIIE or any other trade fair in China, make sure that you have explored the best possible ways for you to correctly establish your IP rights in China, for instance through a trademark, a copyright or maybe even a design or utility patent.
If you are properly prepared, you will be able to rely on a full-fledged and high-standard IP legal framework that encompasses laws, planning, policies, and a specifically dedicated IP protection system that includes specialized courts, judges and agencies, all of which are at your disposal to enforce your IP rights throughout China.
Our IP specialists at DaWo Law Firm Shanghai are available to help you asses your IP status in China and eventually lay the foundation of an IP protection strategy with you. Moreover, during the CIIE itself we will stand ready to help you handle any IP issue (or any other legal issue) that may arise. DaWo is a full service, China-registered firm with recognized expertise in IP, as well as many other areas of Chinese and international law. We have provided bespoke legal services in China to companies small and large for over 15 years. Our multinational team works in French, English, Dutch, German, Mandarin, Cantonese and Shanghainese.