Register your IPR as early as possible
Official registration is required under Chinese law in order to allow you to enforce your intellectual property rights. Depending on the type of IP involved, registration is done in different ways.
Trademarks
These should be registered with the Chinese Trademark Office (CTO). The use of a trademark agent is mandatory for foreigners without habitual residence or a place of business in China.
Trademark registration takes approximately 18 months and initial protection is afforded for 10 years, which can be extended in consecutive 10 year blocks. Trademark owners can licence the use of their trademarks to third parties pending registration, but these licence must be registered with the CTO. China operates a 'first to file' system, which means that those registering their marks first will obtain protection under the China National Register ahead of those who attempt to register their marks later.
It is also possible to register a trademark the 'international way' - in other words, if you are a national of a state that is a party to the Madrid Protocol or Madrid Arrangement via the World Intellectual Property Organisation. This method operates by WIPO issuing a certificate and informing the CTO, which can object. If no objection is raised within 12 to 18 months, the mark is considered registered in China. Practically speaking, and although the international way may be cheaper and slightly faster, as most enforcement actions are taken via the Chinese authorities, it is necessary to request the CTO to certify an international registration to prove Chinese registration. This can take up to three months and so may affect the speed of an enforcement action. In short, the general view seems to be that it is better to apply directly to the CTO for registration.
In order to disincentivise trademarks being registered and not used, if a trademark is not used for three consecutive years it may be cancelled from the China National Register on application.
Patents
Applications must be made to the State Intellectual Property Office (SIPO) and protection is available for:
a) Designs – afforded protection for 10 years
b) Utility models – afforded protection for 10 years
c) Inventions – afforded protection for 20 years
The time to process an application varies, from approximately eight months for designs, to 12 months for utility models to up to six years for patents. For patents, due to the length of time which it takes to grant an application, the SIPO affords preliminary protection with publication after 18 months.
Once granted, patent protection means that the patent holder is protected against other persons producing, using or selling the invention, design or technical functions without the patent holder's permission.
Patent licences may be granted by patent applicants pending full registration of the patent by SIPO but, as with trademarks and the CTO, the patent licences must be registered with SIPO.
Copyright
Copyright in China is automatically protected in the case of Chinese Nationals, and for foreign copyright holders if:
a) There is an agreement between China and the author's jurisdiction regarding the protection of copyright or there is an international treaty in place to which both countries belong; or
b) The original work is first published in China; or
c) The original work is first published in a country which is a member of a treaty of which China is also a member.
Whether or not these criteria are satisfied, for a work to be afforded Chinese copyright protection the author needs to establish that they are the originator of the work. Once this has been established, copyright lasts for the life of the author plus 50 years.
Copyright can be voluntarily registered at the National Copyright Administration of China (for national protection) and the copyright administration department of the Government (for regional protection); however, this does not affect the copyright protection afforded (which is automatic). It does, however, help to establish evidence of an author's ownership in case enforcement measures are required.
Have a plan in place – for business as normal as well as for when things go wrong
Businesses should draw up and implement a plan for operating in China, particularly in relation to how intellectual property rights are handled. In other words, a “best practice” set of guidelines which should be the responsibility of all those involved in the China aspects of the business, and not just the legal team.
This plan should be practical and operationally focused and should be regularly monitored and policed. The plan, for example, might state that:
- background checks are to be run on all key hires
- manufacturing functions are to be separated out wherever possible
- information should only be shared with others on a "need-to-know" basis
- agreements should ensure that rights of protection survive termination or assignment.
Stay Alert
It is not always possible to have people on the ground in China, and for this reason it’s important that you use your trusted contacts in China and have them keep a watching brief for infringements. Listen to your distributors, agents, licensees, production managers and so on, ask them questions, and encourage them to keep an eye out for you and relate any infringements – suspected or actual – back to you. Information from these people as to possible infringements of your intangible assets will allow you to move quickly to address any issues that arise.
Check up on your licensees, distributors, agents and factories
Almost the flip side to the previous point is to keep an eye out yourself, particularly in relation to those closest to you. There can be no substitute for one's own diligence!