Clients have previously asked whether it is worth protecting their Intellectual Property Rights (IPR) in China given its reputation and perceived lack of regard for Intellectual Property Laws.
The short answer is Yes-definitely consider protecting your IPR in China.
Since joining the WTO in 2001, China has improved its Intellectual Property Laws to comply with the WTO and Trade Related Aspects of Intellectual Property Rights (TRIPS). China is also signatory to International Intellectual Property Agreements such as World Intellectual Property Office (WIPO), Patent Cooperation Treaty, Madrid Protocol, and the Berne and Paris Conventions. China is therefore bound by these agreements regarding the protection of Intellectual Property Rights.
However, China has emerged as not only a major global manufacturer in recent years but also as an innovator and trading partner. It is this innovation that is increasing the interest of Chinese businesses in protecting their own IPR. This in turn, has helped facilitate improvements to China’s Intellectual Property Laws. This emergence as a global trading partner is one reason as to why it would definitely be prudent to consider China in your Intellectual Property portfolio.
What IP Rights are available?
China provides IP protection for Patents (Patents, utility models and designs) through the State Intellectual Property Office (SIPO); Trade marks, through China Trade Mark Office (CTMO); and although copyright does not need to be registered, it can be voluntary registered with the National Copyright Administration (NCA). Any foreign person wishing to protect their IPR in China must file their application through a Chinese attorney; however, the application can be prepared by either Chinese or overseas attorneys.
Patents: China also follows a first-to-file patent system, and will grant a monopoly for a period of 20 years to a patent holder, providing the owner the exclusive right to make, use, vend or licence the granted patent. Patents in China are subject to similar examination procedures as those in EP and the US. However, the opposition period to the grant of a patent was abolished in 2001, consequently a request for invalidation of a patent can be filed at any time.
Trade marks: China’s trademark system requires no evidence of use or ownership to be submitted. This leaves popular foreign marks vulnerable to registration by third parties. However, the China Trade mark Office has in the past, cancelled Marks that were unfairly registered by local agents or customers of overseas companies. Therefore, it is recommended that all Marks are formally protected and registered at the China Trade Mark Office before introducing branded products.
Copyright: Copyright works do not need to be registered in China; however, there is the option to voluntarily register copyright with the National Copyright Administration. This is beneficial should enforcement action be required.
What happens in the case of infringement?
China has two routes to deal with IP enforcement. The first, and most established route, is through the administrative enforcement procedure. This is where a complaint is filed at the local administrative IP Office by the IPR owner. The second route is via the judicial route, where legal proceedings are initiated in the court system. It is worth noting that China has specialist IP Panels in its civil courts throughout the country to deal with disputes. A large number of IPR owners elect for the administrative enforcement channel as it is often faster and more cost effective than through the court system; however, the penalty for infringement is limited to a fine for the infringer, which goes back to the State. While this system does not result in a payment to the IPR owner to cover damages, it does at least stop the infringer from continuing the infringing activity. Conversely, enforcing through the court an IP owner can claim compensation from the infringer, thus patent owners often opt to enforce their IPR through the courts.
Despite this, China has in the past, had a poor reputation of enforcing IP laws, and this has significantly improved in recent years.
Even still, it would be risky to ignore protection of IPR in China, and often, the registration of a patent or trademark may be a sufficient enough deterrent to infringement.