Key Points:

  • Government continues to implement the 2008 national intellectual property rights (IPRs) strategy
  • Courts continue to improve the quality of IPR judges and staff
  • Enhanced IPR protection is good for China-based companies and innovation, as well as foreign investors

With promulgation of the National Intellectual Property Strategy Compendium in June 2008 and advocacy of the indigenous innovation policy, China has strengthened efforts in IP protection by amending existing patent, copyright and trademark laws and customs IP protection regulations; establishing more detailed implementation regulations; and boosting administrative and judicial enforcement for IP-related cases. In October 2010 the State Council launched a nationwide special campaign on combating IPR infringement and the manufacture and sale of fake and shoddy commodities, with almost all government agencies involved and a schedule lasting until March 2011.

In spite of the promise of a better IP protection environment in China, non-China-based companies still face the frustrating problem of counterfeit products flooding physical and online shops, as well as the theft or preemptive registration of patents, trademarks, trade names or domain names. The owners must tolerate time-consuming administrative and judicial proceedings in the course of protecting their IPRs in China, and sometimes spend significant money without obtaining a satisfactory result due to unfamiliarity with China’s IP protection systems.

On 2 December 2010 the Beijing Municipal Intermediate No. 1 People’s Court held a briefing on IP cases involving foreign entities, at which the court discussed common problems appearing in such cases that cause delays or failures. For instance, the foreign party might not fully understand:

  • The requirements and procedures for the notarization and authentication of its incorporation certificate and of the identity of its authorized signatory who signs the power of attorney to engage a China-based lawyer;
  • The scope of authorization granted to the China-based lawyer;
  • The burden of proof; and
  • Evidence preservation.

As a result, the foreign party might fail to meet the timelines or fail to provide satisfactory proofs.

It takes at least two weeks to process the notarization and authentication of the required documents. However, in most cases the foreign respondent may have only 30 days to respond or appeal. In addition, China’s courts value original and direct documentation. Electronic documents such as emails, webpages and Internet posts are required to be notarized. If the foreign party bears the burden of proof, it must provide original and direct documentation to prove its arguments, and any document in a foreign language must be translated into Chinese. Non-original documents without strong supporting proof may not be admitted by the court. Therefore, during the company’s operations and dealings with agents or distributors, the foreign party must keep thorough records of all advertising, promotional materials, transaction documents and correspondence.

It is always important to be proactive in IP protection. China follows the first-to-file principle in respect of patent, trademark and domain name registrations. Therefore, the foreign company shall not rely on its agents, distributors or affiliates in China but should secure IP protection by registration before or immediately upon entering the China market.