Project Administrator
Welcome to Linda Liu & Partners on air! This is Crystal. Today we are going to talk about Checklist on IP for Start-ups to Consider When Entering China.
The continuous development of China's economy has fueled the purchasing power of Chinese people, and China has developed into a huge market. More and more foreign start-ups are considering entering China to do business or attracting investment from China.
As China's intellectual property protection environment has undergone great changes in recent years, intellectual property has become a common weapon in business warfare. Therefore, start-ups must pay more attention to the acquisition and protection of intellectual property rights in order to stand out in a highly competitive market.
We have dealt with many cases in our practice that could be served as negative examples. For instance, a Nordic start-up company designed a unique sofa which is very popular among budget hotels. However, the company came to China to manufacture this product in the absence of obtaining any Chinese IP rights. As a result, a large number of the copycats of their product emerged in the market, but it was difficult for the company to safeguard its rights. Another example, a North American start-up team designed a retractable stainless steel straw, and they disclosed all the details of the design in the fundraising stage, making their design become a prior art and resulting in the imitation by Chinese manufacturers. Another case we dealt with is that a small European company cooperated with a distributor in China without signing any contract or applying for a patent in China. Later, the Chinese distributor applied for a patent for its technology in China, but the small European company failed to provide the evidence on the cooperation with Chinese distributor, making it hard for them to retrieve the patent application right through litigation.
So, if you want to enforce your rights in China, you must first obtain your rights. In the following part, we will discuss the Checklist on Chinese IP one by one.
1. Register your trademark
First of all, you need to consider registering your trademark in China to avoid the troubles of your brand being squatted by others. Because China's trademarks are based on the "first-to-file principle", whoever submits the application first has the initiative.
In order to prevent the risk that one day you discover that your company’s name is someone else’s trademark, it is recommended to register a trademark corresponding to your own trade name. If you have multiple products, consider applying for multiple trademarks.
2. Register your domain name
If you have a website, you need to have a domain name. It is better to be consistent with your trademark or trade name, or vice versa, you can register your own domain name as a trademark to prevent others from using similar domain names to take a free ride on your popularity in the future, since trademark is an important right for domain name dispute arbitration.
3. Protect your trade secret
Next, you need to consider which information in your business activities involves trade and technical secrets (technical know-how, customer information, quotations, etc.). We suggest to classify these critical information for more effective management, set up company rules and regulations, and include confidentiality clauses in employment contracts. Our firm has helped many clients to establish and improve internal management mechanisms.
4.Have your copyright recordal
Then, if your packaging decoration is specially designed with artistic value, you can consider protecting it by copyright. Pay attention to the collection of the evidence proving the completion time of these packaging designs. When necessary, you can make copyright recordal.
Copyright recordal is not mandatory but voluntary in China. Recordal can help prove copyright ownership in infringement actions and other disputes, administrative procedures, and commercial negotiations.
5. Build your patent portfolio
China has three types of patents: industrial design, utility model (i.e. small invention) and invention patent.
Of course, the outer packaging can also be protected by design patent. Design patent can also protect the unique shape or colors of containers, instruments, etc.
If you have developed instruments or other devices, you can consider applying for utility model patent to obtain protection in China. It is fast for this kind of patent to be granted, but they are as enforceable as invention patents.
If you have developed some special processing techniques or new materials, you can consider applying for invention patents. Obtaining an invention patent will not only give you strong patent protection, but also reflect your company's R&D strength, which will also have a certain advertising effect.
That’s all for today’s topic, and hope you find it informative. Please feel free to contact us if you have any questions. See you next time!
