New Zealand Trade and Enterprise, an NZ governmental agency tasked with helping NZ companies grow internationally is out with an excellent 80 page primer for small and medium businesses looking to make it in China (h/t Dragon Business Network Blog). It really covers the field of what SMEs need to know about China, and though it is nominally aimed at NZ businesses, virtually all of what it says apply to businesses from just about any country.

The whole thing is worth a read, but I particularly liked its short and clear recitation of how companies should deal with protecting their intellectual property in China. On that topic, the primer had this to say:

It is advised that you seek professional legal advice before seeking enforcement of your IP rights. In order to protect your IP rights you should:

  • Consider which products need to be trademarked, not only now, but in the future.
  • Protect your Chinese-Language marks in addition to your New Zealand marks.
  • Defensive registrations may be needed for similar sounding marks as well as in other product categories and classes.
  • Be aware that a mark registered under the food class will not be able to stop someone from using that mark on a clothing product.
  • Do not be too trusting with pictures and drawings of your product and do not put detailed descriptions on your website.
  • Keep all IP documents safe to ensure a complete audit trail if litigation is required.
  • When entering into collaborations with Chinese partners or agents, ensure you have signed contracts that protect your rights and ensure there is a written agreement as to who owns what.
  • Ensure confidentiality agreements are in place as well as non-competition clauses in employment contracts.
  • Register all of the rights that you can – patents, trademarks, and copyrights.
  • Remember – the cost of registering is far cheaper than the cost of litigation.

You also need to be aware that China’s IP laws are different to New Zealand’s IP laws in that China’s system is based on a ‘first to file’ principle rather than the ‘first to use’ or ‘first to invent’ principle. Your rights are not recognised if they are not registered. New Zealand businesses need to be cautious and aware of this difference as people may have already set up your trademark and then try and sell it to you. It is also important to note that you cannot submit trademark applications directly. You must use a designated agent to file for you.

Do not let the potential threat of IP rights violations deter you from entering the Chinese market. China is continually improving the law and application of the law in this area. To manage these risks, we recommend seeking professional advice on specific circumstances before entering the Chinese market.

Do check it out and let us know what you think.