China lawyers China attorneys
Better to shut the barn door BEFORE your IP leaves

As China lawyers, one of the worst parts of our job as China lawyers is when a foreign company (usually an American or European or Australian company) contacts us after having essentially lost its IP to a Chinese company. In those situations, we review the relevant contracts and relevant IP (trademark, copyright patent and licensing) registrations to determine whether or not they have a good case against the alleged IP infringer. The overwhelming majority of time they do not and it is no fun essentially telling them that, “sorry, you’ve lost your IP and there is little to nothing we can do because YOU didn’t do what you needed to do beforehand to protect your IP from China, but hey, if you want to prevent this from continuing to happen to you….”

One of the best parts of our job as China attorneys is working with foreign companies to prevent the above sort of situation before it happens. The below email is a fairly typical sort of email we send to existing clients, explaining what they must do beforehand to protect their IP from their Chinese counterpart, which in this case is one of China’s largest and most powerful companies.

If ____________ [big and powerful China company] does “development work” absent a formal written agreement that deals with the development work, it can claim rights to the development work and it also can claim certain patent rights based on the development work on an incremental change, new work basis. China like Germany does not require very much of an incremental change to allow a new patent, especially for design patents and similar “junk patents” popular in China.

The way to deal with this is to enter into an product ownership/product development agreement that directly confronts the issue. In a situation where you are asserting the entire ownership of everything done with respect to your product, such an agreement is not complex. IF the Chinese side’s goal is to infringe on your product, they will be reluctant to sign the agreement. However, IF they sign the agreement, the protection is powerful, but only against the parties that sign. What we would do with _______ is to say: If you release our information to anyone, YOU are liable for the breach, without regard to your own fault. We can normally draft this as a very specific agreement, however, we can also just include this type of provision into any form of global agreement with these companies.

My cautions are as follows:

You should never do a deal with a company you believe intends to infringe; you are not looking for a lawsuit. As you know, recovery from infringement carried out by a huge entity like _______ will be difficult for a company like yours.

__________ is a giant company that basically “owns” _________ [a specific third tier China city]. Thus any legal proceeding against them in ________ would be difficult. This again calls for caution and a program where you receive adequate payment BEFORE it has a chance to infringe.

Print:
EmailTweetLikeLinkedIn
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.