A Realistic Assessment of Transferring IP to China

The protection of IP in China is the biggest challenge for foreign businesses. As China works to continue to evolve its economy and become more innovative, Beijing has reshaped its IP laws. Under the 13th Five Year Plan for the Protection and Enforcement of Intellectual Property, the Chinese government has been actively enforcing patent law. Main objectives of the plan include: to promote IP creation and utilization; to strengthen IP protection and management; and to expand international IP cooperation.

The government said it would accelerate the passage of a new foreign-investment law that includes administrative measures to protect the IP of foreign companies and ease pressure on them to transfer technology. China has consciously sought to fulfill its international obligations in intellectual property rights protection, endeavoring to bring its intellectual property protection level near the new international standards, and has taken many major measures to further raise its current level of intellectual property rights protection.

Foreign companies in China should be extra careful to employ well-established practices of IP protection. These include:

  • Standard practices to protect inflows and outflows of sensitive classes of material
  • Monitoring access to key labs, and control of computers, laptops and mobile phones
  • Use of secrecy agreements with employees and suppliers as well as restricted-access rights to internal databases

What IP can be Protected in China?

Trademarks, patents, copyrights, trade secrets (know-how), geographical indications, and plant breeders’ rights are all recognized forms of IP that can be protected under Chinese law.

If a foreign firm doesn’t file its patents, copyrights, and trademarks in China, its IP has no formal protection there. Businesses should register eligible IP in China as early as possible. Companies should also understand the full range of IP for which they might file, including multiple types of patents (utility model, design, and invention), as well as trademarks and copyrights. In the view of the China IP lawyers, it is good to conduct a realistic assessment of the business risks and benefits of transferring IP to China.

By registering your IP in China, you can perform takedowns of infringing products from all the major Chinese websites. Alibaba, Taobao and Baidu have takedown procedures. Effective protection and enforcement of intellectual property rights are critical for China’s successful transition to an innovation-driven economy and this has created a strong impetus for sustained progress in this area.

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