Fascinating article up on the Wall Street Journal, written by Geoff Nairn and entitled, “Patents are a Virtue,” and subtitled, “China is a land of opportunity for business, but it is also a land of counterfeiting and intellectual property theft.” The article is on counterfeiting in China and the various innovative ways companies act to prevent it.
The article has a sidebar, entitled, “An ABC to Losing Your IP,” that lists out three things companies often do to cause them to lose their intellectual property in China. The Journal attributes this list to our blog, but because it has been so modified for the article, I am not even sure from what post(s) they came. In any event, I love the list, so here goes:
A: Failing to use employee invention agreements. These specify that any invention made using the company’s time, material or facilities belongs to the company, not to the employee.
B: Thinking that patents are the only IP that matters. Western companies underestimate the importance and value of trademarks and trade-secret agreements in China.
C. Neglecting the three Ns. Non-disclosure agreements stop suppliers disclosing IP to third parties. Non-use agreements stop Chinese contract manufacturers setting up as your competitors. Non-circumvention accords stop contractors selling direct to your customers.
What do you think?