Okay, so the title is a bit of an exaggeration, but it is true, at least to a certain extent. I just read two articles that got me to thinking about this.
The first article, “The footwear firm that gave counterfeiters the boot,” is by BBC reporter Kim Gittleson. Ms Gittleson extensively interviewed me for the article, but I ended up getting two small quote lines. One had me repeating my usual mantra on how if you do not register your IP in China, you are not entitled to complain when it gets taken from you in China:
Dan Harris, an international lawyer with Harris & Moore and author of the popular China Law Blog, says that while American companies have got smarter about protecting their products, there is still one golden rule.
“The key is if you don’t register you’re intellectual property – your trademark, your copyright, your patent – you have pretty much no chance,” says Harris.
My other quote is more interesting:
But, he [me] adds, focusing on how to protect your business can drive you crazy – and at the end of the day: “Sometimes you have to ignore it and focus on making money.”
I like that one and here’s why. Far too often foreign companies come to our firm almost debilitated with fear about doing business in China, to the point that they have left big money on the table seeking to protect what simply does not need protecting. Of course you should be concerned about protecting your IP in China, but at the same time, you should weigh that concern against the money-making or money-saving opportunities China can give your company.
The second article, “Retirement Living World China 2012 – Day 1,” has Ben Shobert writing on the Retirement Living Conference that just started in Shanghai. Ben writes about an “interesting insight” on China IP revealed by Kevin Ryan of Waterbrook Xian:
He [Kevin Ryan] also offered up what I found an interesting insight into one concern he had that has been alleviated over the last year; specifically, his concerns over intellectual property theft in the service realm related to senior care have not proven out. Kevin shared “my thinking on IP has changed 100% … I now think that the ongoing management expertise is what will create long term value, that is something that can’t be thrown away.” Western operators have this IP and while some Chinese developers and prospective operators may believe they can easily copy this, Kevin is confident his long term capabilities and know-how are components of his business model that he can continue to leverage and protect.
For those who think that Kevin’s comments on IP make too little of this potential issue, it is worth pointing out that while China does have a well-earned reputation for IP theft, the country’s ability to take IP in what are commonly known as service or highly intangible industries has not been as much of a problem for foreign operators. The best example of this, and one that is quite relevant to the senior care sector, is of course the hospitality industry in general. As I was reminded during a meeting Monday, the hospitality industry in China is still dominated by foreign operators whose primary point of distinction is a brand that offers foundationally better customer experiences than what their Chinese competitors can offer.
Ben’s and Kevin’s comments surprised me a bit in that it would not have occurred to me that a senior living facility would be so concerned about IP protection. I too do not want to make light of this industry’s IP protection needs (especially since I am certainly no expert in this industry), but it seems to me that about all they would typically need would be strong protections against others stealing their trademarks (their name, their brands, their logos, etc.) and good employee contracts setting forth the trade secrets their employees cannot take with them.
Not saying that you should stop worrying entirely about your IP in China because protecting your China IP is obviously important. Just saying that you should not allow yourself to put too high a priority on this one aspect of your business.
What do you think?