Knowledge & Opinions
11 Nov 2021

Protecting Intellectual Property in China

When U.S. companies plan to export products to China, intellectual property rights (IPR), primarily patents, trademarks, and copyrights, should be prioritized. This article discusses Chinese IPR laws and practices and provides practitioner tips to avoid infringing other's IPRs while also protecting their own. A contributor to the article, Jennifer Diaz of MSI's Florida specialist member firm Diaz Trade Law provides further details.

As the poverty rate in China continues to decline, and annual income per capita surpassed the $10,000 mark in 2019, the Chinese market has grown into the second-largest export market, second only to the U.S. The Chinese market is increasingly appealing to all producers and suppliers worldwide, including U.S. companies. According to the U.S. Census Bureau, exports from the U.S. to China from January 2021 through March 2021 totaled $34.8 billion, which is a 58.2% increase over the same period in the previous year.

A trademark search is essential

Before entering China or any other markets, U.S. companies should be aware of what IPRs are already in existence in those markets. A prior full clearance trademark search is beneficial to foresee the potential risks of conflict as well as the chances of successful registration of the company's own IPR.

Practitioner tip

The General Administration of Customs China (GACC) and China National Intellectual Property Administration's databases are the recommended search engines to determine whether others have recorded their IPR with Chinese customs. It should be noted that the CNIPA's official database is not always timely updated. It is best practice to have counsel review the search results and provide a professional opinion on the likelihood of registration success prior to proceeding with the registration.

Potential obstacles prior to exporting

If search results reveal another company's IPR is protected, it is possible to seek consent to coexist, negotiate a license agreement, and potentially negotiate an acquisition. The most infamous case in China regarding a prior IPR protection barring registration was about the iPad trademark, which had been registered by Proview in China. Apple did not successfully clear the obstacle prior to making and selling iPad tablets in China. Proview filed a lawsuit, as well as many complaints against Apple, leading to Apple settling with Proview for $60 million in exchange for acquiring the brand to sell its tablet products in China smoothly.   View the full article on Protecting Intellectual Property in China >> 

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