Protecting Intellectual Property in China

China has long been considered a lucrative market, due to the size of its population and consumer base. Coupled with its status as the world's second largest economy, which is growing at a steady rate against the slow recovery of home markets, means it can appear as an attractive alternative for UK companies to do business. China has equally been viewed with caution, due to reports of corruption and infringement of intellectual property (IP) rights.

IP in China

Conscious of its age-old reputation as a haven for counterfeiters, China has recently made changes to its trade mark law - which acts to protect brand names and logos - to speed up the registration process and to increase the compensation available to brand owners whose rights have been infringed. Its Courts have also been handing down harsher penalties to infringers. In May 2014, Hong Kong hosted the annual meeting for the International Trademark Association (INTA) for the first time since its inception in 1951.

The Chinese government has also taken steps to encourage IP creation and collaboration with overseas companies which has seen the number of patents - which protect inventions - increase in 2011/12 by 24 per cent.

Areas to consider

If you are considering whether to launch a product and / or service or participate in a joint venture in China, as a minimum it is advisable to:

• Register existing and prospective trade marks and where applicable, apply for patents, as soon as possible. Intellectual property rights are applied for and granted on a country-by-country basis, so any IP protection in the UK will not extend to China and a separate application will need to be made
• If working with Chinese entities - such as licensees, suppliers and contractors - prepare and sign collaboration agreements at the early stages of negotiation, which clearly state ownership of intellectual property, any limits to its use, and any liabilities arising from breach of the agreement
• Consider whether a localised version of the brand using Chinese characters and an adapted version of a product to accommodate Chinese preferences may be more appropriate for the target market, and seek the appropriate protection

Our UK attorneys work closely with our bi-lingual colleagues in Hong Kong and Beijing - if you would like any further information please contact Esther Gottschalk or say hello at the Oxford and London Pitching 4 Management events on 1st and 8^th July. In our next article we will look at Multi-national IP protection.