Intellectual Property Risks in China: A Few Things You Need To Know

February 16.2018
intellectual property protection in china

​It’s not hard to find examples of fake goods and brand imitations in China. Most foreign brands are aware that intellectual property protection is extremely important when navigating the Chinese market.

Because China is a first-to-file jurisdiction for trademarks, companies are often recommended to register all relevant trademarks and protect their intellectual property before engaging with the Chinese market.

The example below features a copycat that set up a flagship online store on Tmall with a very similar design to the authentic brand.

We have also included below key takeaways from a recent sharing by Tom Duke (Senior IP Officer at British Embassy in Beijing) and Mick Ryan (Head of Business Environment and IP at CBBC) on a CBBC webinar. They provided an overview of China’s intellectual property system and also some practical steps to lessen intellectual property risks in China. We have only managed to provide a quick overview below, you can watch the full webinar here.

Example

Dr. Betta Baby Bottles (by Zoom-T Co., Ltd.) are popular among Chinese mothers who are actively looking for high quality and safe baby products.

Even though it didn’t have a flagship store on Tmall (Alibaba’s B2C e-commerce platform), a Betta flagship store appeared on Tmall with uncannily similar brand style. This led consumers to believe that it’s associated with the famous Japanese company.

In response, the Japanese company had to release an official statement to disassociate itself from the flagship store on the Chinese e-commerce platform.

china intellectual property trademark protection
Announcement by Dr. Betta on its website

China’s Intellectual Property System

This section highlights a few key takeaways from Tom Duke’s recent sharing. He’s a senior IP Officer at the British Embassy in Beijing.

An Overview Of China’s IP System

1. China’s IP system is the biggest in the world

  • 1.4 million invention patent applications in 2017
  • 5.7 million trademark applications in 2017

2. There are two thoughts about China’s IP environment

  • Still very challenging VS Progressing gradually

3. China’s IP system is making progress

There is an increasing demand from domestic Chinese companies to protect their own IP rights and interests.

In fact, only about 1% of the Chinese civil court cases in the past few years involved foreign parties.

A Checklist To Reduce China IP Risks

1. Register your trademarks in China as soon as possible

When filing trademarks in your home country, consider discussing with your attorney to extend the protection to other markets that you may trade in.

You do not need a Chinese legal entity to register a trademark in China but you need a trademark attorney in China to act as a representative.

2. Contracts

Set up your contracts properly because the level of enforceability of contracts is very high in China.

3. Due Diligence

Conduct due diligence on your partners, clients or other relevant parties.

4. Add Value

Keep adding value to your relationship with your Chinese partners. This is to reduce their incentive to infringe on your IP rights.

5. TIER

Technology Import-Export Regulations (TIER) is expected to be more prominent in China IP discussion in the next few years.

This is particularly relevant to companies that are licensing intellectual property into China. You can find out more about TIER here.

Intellectual Property and China’s Internet

This section covers a few key points from Mick Ryan’s sharing on intellectual property issues on China’s Internet. He’s the Head of Business Environment and IP at CBBC.

Why Is It Important To Watch The Chinese Online Space?

China is the biggest e-commerce market in the world by GMV. Well known e-commerce platforms include Taobao, Tmall, 1688.com, Alibaba.com, JD.com, WeChat and so on.

Despite the huge opportunities, it’s also common to find counterfeit goods on the Chinese Internet.

Editor’s Note: Other significant e-commerce platforms include Xiaohongshu, Ymatou, VIP.com, Kaola, Weidian, Suning, pinduoduo, Meili, Jumei and so on.

Practical Steps To Enforce Your IP Rights

1. Notice And Takedowns

Some e-commerce platforms, e.g. Alibaba, JD.com and WeChat, run their own IP protection platforms for businesses to report suspected counterfeit goods.

Alibaba: The Company’s IP Protection Platform (IPP) allows you to submit hundreds of links and the request is usually processed within 24 hours.

Alternatively, for businesses that submit low volume requests occasionally, they can use the non-registration online form.

CBBC is also working with Weidian, Suning, Kaola and Baidu to help brands protect their IP.

2. Proactive Strategy

Some businesses choose to work with platforms like Alibaba proactively. You can submit keywords and prices to Alibaba, for example, and they can add filters to the system to identify fake goods.

3. Offline Measures

Identify the manufacturing, distribution or sale locations and work with law enforcement to stop the counterfeiting activities.

Editor’s Note: For example, the Chinese agent for Entertainment One informed the police of suspected counterfeiting activities and subsequent raids of offices, factories and warehouses were carried out to seize fake Peppa Pig products.

Intellectual Property Protection Is Very Important

It is very important for foreign brands to keep a close eye on their presence in China so as to protect their brand reputation and intellectual property.

This applies to both brands with or without a marketing plan in China. It is always wise to run a quick check on Baidu, WeChat, Weibo, QQ and e-commerce platforms to make sure there are no misrepresentations or confusions about your brand identity in China. You might not be in the Chinese market yet, but your infringers are often one step ahead if they see traction and potential in your brand.

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www.angrymoo.com

Fresh thinking with a global outlook is vital for any business. Our mission is to promote a long-term and global mindset in businesses of any size.

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