At least once a year, one of our China lawyers has to tell a client that the company or the IP the client thought it had in China simply does not exist.

Years ago, we were retained to help a U.S. company whose China general manager had stolen funds from its China subsidiary. Our investigation quickly revealed there was no China subsidiary. No China entity had ever been formed even though the China operations were manufacturing tens of millions of dollars of product a year, with around 100 “employees.” The general manager had lied about having formed a WFOE, no China taxes had ever been paid, and every “employee” had been working illegally.  

A U.S. company once contacted us because its China joint venture company had started selling its product in the United States in competition with the U.S. company. We were tasked with determining whether the joint venture agreement gave the U.S. company the power to stop U.S. sales. The problem was that the Chinese language “joint venture agreement” was actually a consulting agreement and no joint venture had ever been formed.

An American company came to us looking to sue its former China distributor for manufacturing and selling the American company’s product in China, “in violation of our China trademark.” The American company told how its former distributor had registered the American company’s brand name for it in China, and it even had a trademark certificate to prove this. The trademark certificate turned out to be fake and the trademark had been registered in the name of a Chinese citizen (probably a relative of the distributor) who was now licensing it to the former distributor.

In the above examples, the American companies were fooled by people they thought they knew. Equally common is the situation where an American company pays someone it does not know to register a company or IP in China but nothing ever gets filed. There are even fake law firms — not even necessarily in China — that focus on collecting money from American companies to (not) register their IP or their company in China. These are the service company equivalents of the manufacturing companies that take money and never provide any product.

If you have any reason to doubt your China registrations, you probably should have them checked out. Like now.

What do you think?

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.

  • Russell

    Happy new years everyone!
    Can anyone recommend the best way for someone to go about checking the actual registration of Chinese companies? I have some ability to use Chinese characters but I often find websites to be overwheliming!

    • Approve.

      Daniel P. Harris | HarrisMoure
      600 Stewart St., Suite 1200 | Seattle, WA 98101
      (206) 224-5657 | Fax: (206) 224-5659
      China Mobile: (86) 138-5425-5238

      http://www.harrismoure.com https://www.chinalawblog.com

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