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Authored by Darshana Subramaniam, Yue Wang, and Shaila Vester-Skinner
Introduction:
Intellectual property is defined as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce” (What is IP Law?). Protecting intellectual property is crucial for businesses regardless of where they operate. According to the World Intellectual Property Organization, being able to successfully protect intellectual property rights can enhance business growth and financial opportunities, mitigate risks, and optimize operations (Why Intellectual Property is Essential for your Business). In addition to that, a healthy intellectual property ecosystem can make a significant impact on innovation (Reis et al., 2023). When moving to work in other countries, intellectual property is just as important as tangible property and needs to be protected. The United States has protocols to deal with intellectual property, but many firms that want to work in China will have to handle their intellectual property differently. China and the United States have different rules, agencies, and methods of handling intellectual property. It is important for companies who want to work in the People’s Republic of China to understand the complexities before starting to work on projects.
What Is Intellectual Property (IP)? https://www.wipo.int/about-ip/en/index.html. Accessed 4 Aug. 2024.
What Does IP Protection Look Like (in China)?
● In China, IP protection is governed by “the principle of territoriality”, meaning that IP rights are only valid within Chinese territory unless protected by an international agreement or bilateral/multilateral treaty.
● To secure IP rights in China, it is essential to register them domestically. Since China operates on a “first-to-file” basis for IP registration, the first entity or individual to file for IP rights will receive exclusive protection regardless of prior use. The registration process typically involves the following steps: preparing the necessary documentation, submitting the application, undergoing a review process, paying the required fees, and successfully filing the application.
How do China and the U.S. Vary?
Unlike the US whose IP policy is more decentralized and managed by specific federal agencies, China employs a centralized approach to IP enforcement, mainly through mobilizing around 28 government agencies to implement long-term strategic plans, and integrating IP development with broader national initiatives. Moreover, local governments in China also play a significant role by tailoring IP reform programs to regional needs, categorized into “leading, supportive, and characteristic” areas.
Agencies in China
● There are different administrative and judicial bodies that navigate intellectual property rights in China.
○ The China National Intellectual Property Administration makes decisions about patents, trademarks, geographical indications, and layout designs.
○ The State Administration for Market Regulation is in charge of the enforcement of patents, trademarks, unfair competition and trade secrets.
○ The National Copyright Administration of the People’s Republic of China manages the administrative enforcement of copyrights.
○ The Copyright Protection Center of China is the agency that issues copyright registrations. It is important to be well versed in which agencies handle what and where to start with the process to protect your intellectual property.
Best Practices
● NNN Agreements
○ Used to present sensitive data
○ Introduce new technologies and innovations
○ To engage with new suppliers
■These agreements cover non-disclosures, non-uses, and non-circumventions. Non- disclosures require that other parties maintain confidentiality. Non-uses insist that other parties can’t use your ideas without consent. Non-circumventions state that other parties can’t create any similar products for promotion.
● Be Specific to China
○ To avoid any miscommunications there should always be a version written in Standard Chinese. The document should contain specific information regarding Chinese laws, protocols and agencies. If the document is written in multiple languages make sure the meanings are the same, and consult with a multilingual agency to read over everything.
● Other Protections
○ Patents protect all new technology solutions and inventions created with rights granted towards inventors. Applications are sent to SIPO or the State Intellectual Property Office.
○ Invention patents are for more innovative inventions and lasts up to 20 years.
○ Utility models last up to 10 years and are used for small improvements on designs.
○ Multimedia, literary, audiovisuals, and music are covered by Copyrights.
○ Goods, services, and ensuring customer trust/recognition is protected by Trademarks. Trademarks help distinguish between brands like Michael Jordan and Qiaodan sports.
How Can CIAG Help:
When your firm wants to start working in the People’s Republic of China, CIAG can offer assistance in research, training, and corporate strategy. We can compile the specifics and agencies your firm will need when handling intellectual property in China, and what the filing process will look like. Agencies handle different components of the process and we can help guide you to which agency you need. CIAG can also help with trainings on the differences between U.S. and Chinese guidelines and what are the best practices to follow when handling intellectual property. As the process varies between the two countries, it is important to understand how to move forward to protect your firm’s intellectual property. CIAG can assist with developing corporate strategy. In moving to the new country, there are new guidelines, agencies, and norms that should be adhered to and CIAG can facilitate the learning.
Conclusion:
A 2022 survey from the American Chamber of Commerce in China found that 44 percent of its members believe IP enforcement in China is improving, while only 23 percent reported that China’s IP regime limits their investments in China. In January 2023, China proposed further amendments to its Trademark Law regarding bad faith trademarks to supplement amendments from 2021. As China has more complexities, it’s important that the country keeps improving and decreases the amount of limitations for investors. A healthy intellectual property ecosystem can make a significant impact on innovation and China is making significant progress (Reis et al., 2023). When moving to work in other countries, intellectual property is just as important as tangible property and needs to be protected. This article provides peers with insight on how China has different methods when handling intellectual property law, how it differs from the U.S, and how our company can help clients learn the new guidelines.
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