doing business with china. an ip perspective · doing business with china. an ip perspective anton...

Doing business with China. An IP perspective

Anton BlijlevensPartner

Outline for today’s presentation

● IP update

● IP enforcement

● Top tips

Outline for today’s presentation

● IP update ● IP update

● IP enforcement

● Top tips

China’s IP system

● From no IP system to being world class - in only 38 years.

● Over 38% of the world’s patents are filed in China.

● Court cases 109,386 intellectual property cases.

More stats

• New Balance Case

Gisborne, 12 May 2016

New Balance - July 2017

Statutory damages for TM’s = NZ$600kCourt awarded NZ$2m

Current IP law highlights

● Major change in Trade Mark law

Recent TM law changes in China – how do they help?

• A new law specifically states that trade marks should be registered and used in accordance with the principles of good faith.

• Prior use now has some limited recognition.

• There are options to take on those who use your trade marks.

• Many CN agents and distributors require that your CN trade mark is registered.

Copyright registration

● Certificate issued● Can’t be squatted on ● Instant evidence of ownership and what its for:

‒ Logo, picture, drawing, product

● Can register for product shape protection! ‒ Unlike registered designs, can register after product launch.

Very helpful tool for:Take down noticesTrade fair enforcementFactory raids

Copyright ©

● IP enforcement

● IP update

● IP enforcement

● Top tips

IP enforcement in China

China’s enforcement laws are good

Central court system

Local administrative office route

Anti-Unfair Competition Law

● Top tips

● IP update

● IP enforcement

● Top tips

Top tips and recommendations

● Don’t expect China to do business the New Zealand way – learn their way and adapt

● Understand the value of your IP – and register it!

‒ patent and utility models, trade marks (English and Chinese, coloured, 3D versions), copyright.

● Don’t forget about copyright and unregistered rights such as trade secrets and unfair competition laws

● Use NDA’s but….

● Be vigilant

● The only difference between counterfeit and genuine product is the time of day it is made by your factory.

● Manage and be engaged in your relationships

OEM in China – a word of caution

● Many advantages for foreign companies, but many IP-related issues

● Every class of IP asset (copyright, trade secrets, trade marks, patents, designs, utility models) may need to be shared with an OEM in the normal course of outsourcing your manufacturing … but be careful!

● OEMs are uniquely positioned to create counterfeit products because:

‒ proprietary IP, once in the hands of an OEM, may be illegitimately used by the OEM to manufacture unauthorised batches of product or as a base to develop more sophisticated products

‒ OEM may illegally share your IP with other customers or competitors for their own commercial benefit

Strategies to deal with OEMs

● Know who you are dealing with – forewarned is forearmed

● Find well-established reputable OEMs – they have more to lose

● Know your IP – assess what you can live with being leaked

● Consider on-shoring production of critical components/processes

● Structure OEM agreements with a high level of detail around different forms of potential IP-related disputes eg, state specific amounts of compensation for certain eventualities (may act as a deterrent but also provides practical clarity)

● Ensure your Chinese contracts are enforceable

● Register your IP in China– enforcement of unregistered rights is difficult

● Litigation (actual or threatening) may be your best or only recourse in some circumstances

Thank you

Anton Blijlevensanton.blijlevens@ajpark.com

If you have any questions, my free* 30 minute meeting deal applies

*You may need to buy me a coffee. Buy lunch and we can meet for 1 hour