| In This Newsletter |
A few non-legal methods for protecting IP in China:
- Technological Specialization
- De Facto Secrecy
- Internal Relations
- External Relations
- Educate the Customer
- Product Structure and Know-how Intensity
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Contact
Raymond Man Lai CHAK
Tel: +852 3588 8001
Chak & Associates, solicitors 19th Floor, Far East Finance Centre,
16 Harcourt Road, Admiralty,
Hong Kong SAR.
Tel: +852 2868 9800
Fax: +852 2810 6682
More Information
www.chakandassociates.com
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| Practical ways to protect your IP rights in China |
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Clients frequent ask questions regarding protection for their IP rights in China. I am always being asked if registering a trademark, or getting a manufacturer to sign a non-disclosure agreement, or getting an employee to sign a non compete or trade secret agreement works in China. My answer is always that doing these things, together employing "non-legal" strategies as well, will greatly increase your chances of protecting your IP in China. Companies that combine legal and non-legal strategies to protect their IP have a much better record of IP protection in China than those who do nothing.
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| A few non-legal methods for protecting IP in China: |
| Technological Specialization. This strategy attempts to make imitation impossible by making the product so complex that imitation would take so long or be so costly as to render it uneconomic for someone to copy. |
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De Facto Secrecy. Protection may no only come by legal means, such as nondisclosure agreements. This strategy involves stopping the outflow of sensitive IPR from the unauthorized appropriation of documents, blueprints and technical description by local employees. The idea is simple: Tight control over IPR documentation management of simply " Do not document any important information in Writing."
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Internal Relations. Win over your China employees by building trusting relationships with them by good pay, long-term education and training and constant reminders of the importance of keeping company IP a secret.
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External Relations. This strategy focuses on "establishing good relationships with firm-external official bodies and institutions" on whom you can call to help you "pursue IPR infringements."
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Educate the Customer. "Most counterfeits offer poor quality", so the customer learns over time that the more expensive but high-quality original product will better fulfill demand than the low-cost, low-quality counterfeit. Help the customer learn how true this is by providing quality and service counterfeiters do not match.
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Product Structure and Know-how Intensity. Hang on to some "key" to using your product. All of the above strategies, alone or in combination, can work to increase IP protection in China (and elsewhere). The strategy you employ should depend on your product and on the way you do business.
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We have a client that sells expensive technology equipment that requires specific technical know-how to achieve all of its capabilities. The specific technical know-how is the "key" to full functionality and so duplicated hardware will never be as valuable as the original. We have another client who pays a little more to have two Chinese manufacturers make the two main components for its product, and then has the product assembled in another country, so no Chinese manufacture ever gets the whole product. A large number of our clients rely on trademarking their brand in China and constantly coming out with new and better product so they will always be "one step ahead" of their competitors.
How do you protect your IP rights in China?
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