Patent protection in China

**alcglobalpartners** · 01-21-2010 10:31 AM

Hi everyone,

As I frequently deal with helping my clients source their new inventions in China - I thought I would share some useful information about how and if you can protect your product while it is being made in Asia (particularly China). First off, I should say that you are right to be afraid when sending your sample to an unknown factory [which I would NEVER do]. Conceptions of intellectual property are virtually unknown by most small factories and there is a good chance if they perfect the design of a product for you, they will begin to put it on the company website and try to market it to other customers as well (this is the stuff of my nightmares as a sourcing consultancy.)

However, there are a few things you can do about this (or should be aware of):
1) There are some formal legal actions you can take to protect your product within Chinese law. The downside is that they are prohibitively expensive and could take years to accomplish. (For good info on this search for the US Embassy in Beijing + Patent/ Copyright). In my opinon, these measures are only really useful if you are already a huge company like Coca-cola or something.

2)You can have a local lawyer prepare a contract with the supplier that would give you some right to sue if necessary. (I have worked with many of these firms in the past, so feel free to contact me for more info)

3)You can have the factory sign a confidentiality agreement before they begin to make your sample. I always do this as a matter of standard sourcing practice. Although it does not guarantee that people will not still copy your product, it at least sends the message that your brand is serious about this matter.

4)You can contract with a Hong Kong lawyer (usually substancially more expensive than a local lawyer) to prepare the buying contract. The advantage of this is that because HK operates within some British laws, a HK contract can give you more protection. (Again, I have standard affiliates who prepare these contracts for me so feel free to ask me for more info)

It is important to remember that all of these actions are not always effective against preventing copying since legal protection for foreign businesses in China is slim to none. Even with some of these legal protections in place, I still send reps from my company to every production site to check on things from time to time. It is my belief that the best defense is to let the factory know that you are watching them!

**rpermana** · 01-21-2010 09:57 PM

even Google can't handle China

**cheapriver** · 02-01-2010 03:12 AM

Andrea, has it happened to you that they copied your IP and sold it? What did you do in that case?

Jaap

**peteVA** · 02-01-2010 08:10 PM

Just the title is an oxymoron.

**alcglobalpartners** · 02-03-2010 05:09 AM

Hi Jaap,

It has not happened to me yet - but it nearly happened once! One of my client's designs was at a factory and other Chinese clients saw it and wanted to have it made for themselves. I convinced the factory that it was a bad idea to do this because I was a long-standing customer and it would ruin our relationship if they used my clients designs. However, I was absolutely horrified by the experience and after that started my confidentialy agreement process.

From a legal standpoint, I don't think any factory would bother to actually bother to take out a patent on your design - but there is a definite risk that they might just start mass-producing your design in China which may cause harm to your brand.

**nevaeh.aaric** · 02-09-2010 02:51 AM

Has it happened to you that they copied your IP and sold it? What did you do in that case?

**alcglobalpartners** · 02-09-2010 01:14 PM

No, they technically didn't copy my IP (because the item I had did not have an IP yet). What they wanted to do was copy the design of the product (in this case a shirt) and then market it to other Chinese customers. In this case I was lucky because my agent in China was told by the factory owner that he wanted to do this, and then she was able to convince him that it was not a good idea. After this experience, I started having all my factories sign non-disclosure agreements before they produced any samples. Also, if the customer is willing to pay a bit more for a Chinese factory that works more often with Western clients it is better because these types of factories are more conscience about brand protection.

**Will** · 02-10-2010 09:45 AM

I think there will always be that risk when dealing with China, as their laws on things like this (like all the replicas they produce) are pretty relaxed.

There will always be spinoffs, though I think it is up to you as the real product owner to market the product a lot better than they can, and you will always come out on top.

**creditnet** · 02-10-2010 07:50 PM

For the most part, if these factories copy your designs/IP, they're going to be selling it within China. Spend 5 minutes in a shopping mall that sells "knock offs", and you'll see a North Face designed jacket with a North Face label. Not a fan of North Face? Just ask and they'll switch out the label for Columbia or Gucci if you'd prefer!

The Chinese government did step up enforcements around the time of the Olympics, but now that the world is no longer watching, you're bound to see copies of your stuff around town.