China IP Lawyers
Photo by Ina Centaur

Barely a day goes by without one of our China IP lawyers getting contacted by an American or European company telling us that its products are being counterfeited and would we please get so and so (usually the alleged counterfeiter or the online site on which the counterfeit products are posted) — to remove the offending items immediately. If only it were that simple. Our lawyers have a near 100% success rate at getting counterfeit products removed from Chinese e-commerce websites like Tmall and Taobao and the same holds true for American e-commerce sites. But our success rate depends largely on the advertised product truly being a counterfeit, as that term is commonly defined by lawyers not businesspeople.

All of the big American and Chinese e-commerce sites, including the Alibaba family of sites (Taobao, Tmall, Alibaba, AliExpress, 1688.com, etc.), have formal internal procedures for removing product listings that infringe a third party’s IP rights. To secure the removal of infringing listings, you must follow their procedures to the letter. Among other things, you must provide documentation proving (1) that you exist and you are the IP owner and (2) that you as the IP owner still have the rights to the IP in question. Only after you have submitted these documents and had them verified by the e-commerce site can you even submit a takedown request.

When you do submit your takedown request (assuming everything goes well), most e-commerce sites will remove the counterfeit products within a week or so. When things don’t go well with a Chinese e-commerce site (which judging from the volume of phone calls and emails is rather frequently) it is vital to have a person on your side who speaks Chinese, understands Chinese intellectual property law, and is experienced in dealing with the particular Chinese website posting the counterfeits of your products. This person is necessary to get to higher-level employees at the Chinese e-commerce site to explain to them why the listing does in fact violate your IP. Sometimes it seems we get products taken down simply by constantly pushing the problem to higher and higher levels at the Chinese e-commerce company, all the while making clear that things will go easier for them if they take it down than if they do not.

To date, our China IP lawyers have succeeded with nearly every takedown request seeking removal of products that infringe our client’s trademarks or copyrights. But about half the time, we have to tell the potential client that they should not bother retaining our law firm for their product removal because there is such a small likelihood of success. The below email from one of our China IP lawyers who regularly works on takedown matters across multiple websites (both in China and elsewhere) explains in the below email summary why this is the case:

Every Chinese website has its own takedown protocols and following that protocol to the letter is the key to getting a product removed. You mention wanting to sue these websites. We emphatically do not advise that unless and until we have sought to get your products taken down and failed. Lawsuits are expensive and based on our track record in securing takedowns, the odds are overwhelming that we will never need to file one on your behalf.

Note that  only the copyright or trademark owner or its authorized representative can make takedown requests. However, sites vary as to the sort of authentication they require for Powers of Attorney and most of the sites know our lawyers well enough that they almost never require we provide them with a formal Power of Attorney to achieve a takedown.

It is critical we can prove you have registered your IP (your trademark or your copyright) somewhere. Some Chinese sites sometimes will take down products with foreign IP (i.e., non-China) registrations, but China registrations are always much better. Technically, China is obligated to recognize copyrights registered in any Berne Convention signatory nation, but explaining China’s WTO obligations to a 21-year-old customer service representative seldom works. And as you can probably imagine, securing the removal of copyrighted IP for which a copyright has never been registered anywhere is even more difficult.

The more sophisticated/well-heeled the website, the more likely it is that they have a formal takedown procedure. For the smaller websites, we generally have to contact someone directly (usually by telephone) because there are no instructions on the website or the instructions that are there either make no sense or simply do not work. But unless the website is a pirate site (which is rarely the case), it does not want to be sued for hosting counterfeit or pirated items and so long as we do all the work for them, they’ll be happy to take down rogue products and content.

Once the whole takedown process begins, it pretty much continues forever. because the pirates and counterfeiters don’t just give up after their first upload is taken down. Even after we stop one or two of the counterfeiters, we should expect more to pop up. This is why companies hire us to monitor and report and after we remove the existing counterfeits, we should discuss what sort of future programs make sense for your company and your situation.. One of the things we should do is try to figure out who is doing the counterfeiting, how they are doing it, and what we can do — if anything — to try to stop it or slow it down. Oftentimes it can be your own factory or distributor.

Our law firm has an Alibaba account that makes us eligible to seek removal of links that infringe our clients’ IP. We do this by submitting proof of identification and authorization, as well as information regarding the IP being infringed upon. We do this by providing the following to Alibaba: (i) our client’s “business license,” (ii) any formal IP registration documents and (iii) (sometimes) a power of attorney signed by the client, authorizing us to file the complaint on its behalf. We also submit the following information: the IP registration number(s), the title of the IP, the name of the IP owner, the type of IP, the country of registration, the time period during which the IP registration is effective, and the period during which the IP owner wishes to protect its IP rights. We translate these documents into Chinese to make things easier on the Chinese website company and because doing so greatly speeds things up.

Once Alibaba verifies the above information, we provide the infringing links and removal nearly always occurs quite quickly after that. For complaints concerning patent rights, we also need to provide proof of the connection between the infringing material and the IP being infringed. Alibaba normally then sends our complaint to the infringing party. If the infringing party does not respond to our complaint within three working days of receipt — either by deleting the infringing link or by filing a cross-complaint — Alibaba will delete the infringing link. Absent prior written permission from Alibaba, the infringing party would then be prohibited from posting the same information on Alibaba again. If the infringing party files a cross-complaint, we would then need to deny the cross-complaint, and then Alibaba would handle the “dispute.” Alibaba normally resolves such disputes within a few days. As you would probably imagine, counterfeiters almost never file cross-complaints; they typically just slink away.

We have achieved similar results with China’s other leading and legitimate online marketplaces. But as you would expect, China’s smaller and sketchier marketplaces are more difficult when it comes to IP protection.

If your IP (especially your trademark or your copyright) is registered in China, securing removal of counterfeit products from Chinese websites is usually relatively fast and easy. If your IP is registered in a country other than China, securing the removal of counterfeit products from Chinese websites is definitely possible, but less certain. If your IP (your unregistered U.S. trademark, for instance, or your unregistered copyright) is not registered anywhere, your best strategy for securing removal of infringing products is usually (but not always) to register it first (typically wherever it can be done fastest and cheapest) and then seek removal, rather than to seek removal first. The same generally holds true for US websites, but US websites are much less likely to remove products that infringe on your patent rights than are Chinese websites. US websites typically take the position that you need a US court order stating that the product or products infringe on your patent for a removal based on patent infringement.

If you want to protect your products from counterfeits popping up on the web (and then staying there), plan now with your IP filings for takedowns later. See China Trademarks: Register Yours BEFORE You Do ANYTHING Else.

China trade war

The trade war with China continues. The U.S. declared a 90 day truce which ends on March 1. Negotiators from the two sides will meet in Beijing on January 7. Many are looking for a “sign” from the Chinese government on the position China will take in the negotiations.

As stated in the U.S. Section 301 complaint, the United States’ position is that China must make major changes in the fundamentals of the Chinese economic system. So the question is whether such a major change is likely? Or will the Chinese side simply offer the same old thing? To date, no formal proposals from the Chinese government have been revealed to the public. So we are required to look for other indicators.

Normally, the strongest indicator would come from the CCP Central Committee meeting held each November. However, no meeting was held in 2018. This is in itself big news because major reform proposals are usually unveiled at this meeting. See The biggest story in Chinese politics right now — silence over Communist Party’s autumn meeting. The absence of a Central Committee meeting then logically suggests no reforms of the Chinese system are planned for 2019. So if the U.S. plan is designed to precipitate a series of reforms in China, this is not likely to happen.

This conclusion is supported by Chairman Xi Jinping’s recent speech at the meeting commemorating the 40th year of China’s reform and opening-up program. The content of that talk is generally taken as the definitive statement of the Chinese government program for 2019. A copy of the full speech (in Chinese) can be found here.  Foreign response to the speech has not been positive. See Xi’s Scary Interpretation of the Last 40 Years of Chinese History.

What did Xi actually say? He started by listing the obvious achievements of the Chinese economy over the past 40 years. This remarkable economic progress was initiated with the announcement of the reform program at the 3rd Plenum of the 11th Party Congress convened on December 18, 1978. There are two initial points to note. First, the reform and opening up program was initiated at exactly the type of meeting that was cancelled for 2018. This suggests we can expect no such reform for 2019. Second, the achievements listed by Xi are entirely economic. Nothing else counts.

In the talk, Xi concludes that Communist Party guidance was entirely responsible for the success of the 40 year economic development program. No other factor is of any significance. Assuming this conclusion is correct, Xi then quite reasonably concludes that the future of China and the fate of the CCP depends on two things. First, the CCP must remain in absolute control of China. Second, the standard for evaluating the success of the CCP depends entirely on the continued economic development of the Chinese economy.

On this basis, Xi then lists the following nine standards the Chinese government will follow for the near future:

1. The CCP will remain in complete control of the government, military and civil society.

2. The sole measure of CCP success is the living standards of the Chinese people.

3. Marxism will remain the core guiding ideology. That is, input from Harvard trained economists and MBAs will mostly be ignored.

4. China will continue to hew closely to socialism with Chinese characteristics. This recognizes that China’s Marxism does not exactly correspond to the works of Marx or Engels.

5. China will follow on and improve the institutions of socialism with Chinese characteristics. No new institutions will be introduced.

6. Economic development is the top priority.

7. China will remain “open” to the rest of the world but it will not accept attempts by other countries to meddle in its internal affairs and it will oppose attempts by any foreign country to impose its will on China. This has to be read as referring to demands from the U.S. and many other countries that China comply with its treaty obligations and follow the rules of international trade and and international relations. China is only obligated to comply with rules that benefit China.

8. The only authority with power to regulate the CCP is the CCP itself. In other words, single party rule outside the constitution and the legal system will continue.

9. Dialectical materialism and historical materialism will be the standards for planning and control of the reform process. Once again, this means no Wharton business school graduates need apply as advisors to the Chinese government.

This set of nine standards is China’s plan for the near future and it should dash the hopes of U.S. analysts pining for a return to the policies of Deng Xiaoping and Zhu Rongji. What does this mean for the U.S.-China trade war and the meetings for next week? It means that if the only solution for the U.S. is for China to fundamentally overhaul its basic economic and trade policies, there will likely be no solution.

However, this rigid view is not the only possible outcome. The truth is that from the standpoint of economic development, China needs the U.S. and the U.S. needs China. Xi’s talk places economic development at the center of Chinese government policy. There is no question the U.S side also sees economic development as a core objective. Given the alignment in those core objectives, it is not unlikely the two sides will put aside ideology and come to some form of agreement. However, that agreement would almost certainly need to be quite different from what is currently being demanded by the U.S. trade representative. What it will look like is anyone’s guess.

China Trademark

Like most countries, China has a use requirement for trademarks: to remain valid, a trademark must be used in commerce at least once every three years. But as we wrote in China Trademarks: When (and How) to Prove Use of a Mark in Commerce:

Unlike the United States, China does not have an affirmative requirement to prove that a trademark is being used in commerce. You do not have to prove use for a trademark application to proceed to registration, and once a trademark is registered you do not have to prove you are still using it to maintain or renew the registration.

China does require proof of use in certain circumstances. The most well-known circumstance is when a trademark is challenged for non-use; at that point a trademark owner has two months to provide evidence of use in the three years prior to the non-use cancellation being filed. (You can’t start using the mark after receiving the notice.) Another circumstance is when a trademark owner is suing a third party for trademark infringement and trying to prove damages. If you can’t show that you have been using the trademark yourself, it’s difficult to convince a Chinese court that you lost money due to another party’s infringement.

In my previous post, I outlined the general sorts of documents that could be used as evidence of trademark use. The Chinese Trademark Office (CTMO) has recently released a document that categorizes acceptable and unacceptable forms of evidence of trademark use in China, helpfully titled Explanations on Submission of Evidence of Trademark Use (提供商标使用证据的相关说明).

Acceptable trademark use on goods includes:

  1. on goods or their packaging/labeling, or including the mark on product tags, manuals, brochures, or price lists;
  2. in documents relating to the sale of goods, such as contracts, invoices, bills, receipts, import/export documents, inspection/quarantine certificates, and customs clearance documents;
  3. on the radio or television, in widely distributed print publications, or in other media;
  4. on billboards, mail, or other forms of advertisements; and
  5. at exhibitions or trade fairs, including printed matter or other material.

Acceptable trademark use on services includes:

  1. on the premises where services are offered, including on service brochures, signboards, decorations, staff attire, posters, menus, price lists, coupons, office stationery, letterheads, and other articles related to the services;
  2. on documents associated with the services, e.g., invoices, remittance advice, service agreements, repair and maintenance certificates;
  3. on the radio or television, in widely distributed print publications, or in other media;
  4. on billboards, mail, or other forms of advertisements; and
  5. at exhibitions or trade fairs, including printed matter or other material.

The above is not an exhaustive list, but for good measure the Explanations note that the following does not constitute acceptable trademark use:

  1. documents relating to a trademark’s registration, including any statements by the trademark owner about its exclusive rights to such mark;
  2. use in private commerce (i.e., not openly);
  3. use on complimentary items;
  4. assignment or licensing of the trademark without actual use by the licensee; and
  5. de minimis use of the trademark merely for the purpose of maintaining the registration of the trademark.

The last item is perhaps the most controversial and subjective, because trademark squatters have been known to make a single Taobao sale of an item to themselves (or to a relative) so they have evidence of use in China. In the past, such use, which to most rational people would be considered both de minimis and in bad faith, has sometimes been deemed acceptable by the CTMO. That being said, such lax rules have also redounded to the benefit of legitimate trademark owners who have not been scrupulous about keeping records and find themselves in need of last-minute evidence of use. But the trend now is for the CTMO to be stricter about de minimis use, and not consider it sufficient proof to maintain trademark rights.

All of the above evidence must come from China, which almost always means the evidence must be in Chinese and be capable of authentication by the issuing entity. This makes sense: to prove use in China, you need evidence from China. A purchase order from a US company (even if it includes the trademark) is unacceptable. An invoice from a Chinese company that specifies the goods but does not mention the trademark is similarly unacceptable.

Most companies selling products in China have no problem providing the necessary evidence. It’s the companies that only manufacture in China that have problems, because they often have no acceptable documentation from China that includes the trademark. Don’t be one of those companies. Think about how you can best gather up your evidence and do so. Now.

international lawyerA startup U.S. consumer product company with an ultra-hot new product line wrote one of my law firm’s international lawyers asking what they needed to do to sell their product through a Chinese company that had expressed interest in being the U.S. company’s “China representative.” After a few emails on various different legal subjects, our international lawyer wrote the following email (modified a bit) that provides such good and basic business advice that I wanted to share it here. It deals with the basics on what to do when you are approached by a foreign company wanting to sell your products in another country.

I am now about to provide you with some business advice, not legal advice.

You are going to get many companies from foreign countries that are interested in selling your products. Most of those companies will not be worth more than ten minutes of your time, either because they are not equipped to do what you do or because their countries are too risky/too small.  Going international can be a great thing but it should be done in a way that suits your business and your plans and not according to who just happens to contact you. I do not purport to be an expert on your product, but I would say that for a company like yours, Mexico, Canada and the EU make the most sense, simply because they are relatively easy, relatively safe, and relatively large. I doubt any one company in any one country has sufficient contacts to sell within the entire EU, so you probably will need to tackle EU sales country by country or at least region by region.

If I were in your shoes I would do the following first:

1. Figure out where selling your product makes sense.

2. Figure out whether those who have contacted you from the countries/regions that make sense are the right people/companies to be selling your products.

3. One of the most important things you need to do if you are going to be going international is to protect your brand name in those countries where your product will be sold. When you decide where it makes sense to sell your products, you should apply for a trademark in those countries. Note that you can get one trademark for the entire EU and that usually (but not always) makes sense.

4. As far as you needing an NNN Agreement before you show your products to potential distributers, that will depend on your exact situation. If you are going to send product samples to companies that could not just buy them somewhere else (to copy), then you should have a signed NNN Agreement in place before you do so. But if those products are already readily available, an NNN Agreement probably will not help you much if at all. If you are going to be discussing anything with these potential distributors that you wish to keep secret (who manufactures your products or your costs, for instance), you should have a signed NNN Agreement in place before you do so. But the safest protection would be for you not to provide samples until you absolutely must do so. You at least want to make sure you have some idea of with whom you are dealing before you reveal much of anything, NNN or no NNN.

The big question is going to be how you will want your relationship with these companies to be structured. Will you want them to be your distributor such that you have a contract with them? See this for what distribution contracts often involve. Or do you just want a situation where you sell to these companies at a reduced price, along with an agreement making clear they are not allowed to re-sell anywhere other than in their own country? We should discuss the pros and cons of these (and other) methods.

China lawyers

Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments or phone calls as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a quick general answer and, when it is easy to do so, a link or two to a blog post that provides some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

I gave a long interview last night with a Canadian reporter regarding China. The focus was mostly on what the international lawyers at my firm were seeing with China in light of the Trump tariffs. At one point though, I was asked one of the most common questions I get asked by reporters and it went something like this: “What about intellectual property in China. Is that a risk for foreign companies that do business in China? Are things getting any better on that score?”

My initial answer was something like this: “I am going to give the same answer I have given for at least a decade. Things are not as bad for intellectual property in China as most believe and the intellectual property risks faced by companies that do business in China have declined every year for at least the last 15 or so years.”

But then all of a sudden (like right after I heard what I had said), I realized that my knee-jerk response (conditioned by the last 15 or so years) was no longer true. I then said something like the following:

Wait a second. I take that back. What I said was true but it stopped being true maybe 3-5 months ago. When a Western company goes to a Chinese manufacturer to have a new product made, that Chinese manufacturer looks at the new product and wonders whether it can make more from that product by “stealing” it and making it for itself or by making it for the Western company for the next five years. Most of the time, after conducting that cost benefit analysis, the Chinese manufacturer would choose to make the product for the Western company for the next five years.

But now, what with so many Western companies having moved their manufacturing outside China and so many more looking to do so (See e.g. Would the Last Company Manufacturing in China Please Turn Off the Lights and Doing Business Outside China: It’s Thailand’s Time), the calculus for Chinese manufacturers has changed. The Chinese government’s increasing antipathy towards private enterprise does not help either. All this means the new analysis for Chinese manufacturers seems to be whether they can make more by making the product for the Western company for the next year or so than they can by stealing it right now. So what we are seeing is Chinese companies stealing products immediately, rather than waiting until it has become somewhat clear that the Western company for which it is making the product will be moving to another manufacturer.

So yes, the intellectual property risks for Western companies doing business with China or in China are higher now than they were because the relative benefits to Chinese companies stealing your IP have gone up.

China trademark registration

In a recent Quick Question Friday, I addressed whether a trademark application for a color device (aka logo) should be in color or black-and-white. As I wrote,

According to trademark practice in China, registration of a black and white device in China would protect the logo regardless of the actual color scheme used on the device, and for that reason we typically recommend our clients file an application for the black-and-white version of their trademark.

The exception is if the color scheme for the device is part of the trademark, such as UPS’ brown-and-beige, FedEx’s purple-and-orange, John Deere’s green-and-yellow.

But you know what can’t be protected in China? A single color. Article 8 of China’s Trademark Law reads as follows:

An application may be made to register as a trademark any mark, including any word, device, any letter of the alphabet, any number, three-dimensional symbol, colour combination and sound, or any combination thereof, that identifies and distinguishes the goods of a natural person, legal person, or other organization from those of others. [bold added for emphasis]

We’ll ignore the quaint British spelling of “color” and focus instead on the important word: “combination.” What this means is that China will only approve a trademark registration for a combination of colors, i.e., two or more colors used together. So Tiffany blue is not protectable in China. Or T-Mobile magenta. Or Owens-Corning pink. Or UPS brown (aka Pantone Matching System 462C), which is protected in the U.S. by U.S. Trademark Reg. No. 2,901,090 for transportation and delivery services, as applied to the surface of delivery vehicles and uniforms.

For most companies that use color marks, the requirement of a color combination isn’t an issue. For most, the color isn’t itself an essential part of the trademark. And for those that do consider color an essential part of the trademark, the color is already in a combination or can be easily made to be part of a combination.

So though UPS can register the color brown by itself as a trademark in the United States, in China it would have to use the brown-and-beige color combination. And though Caterpillar may want a trademark for the particular shade of yellow it uses on its logo and equipment, it could instead register the yellow-and-black combination that appears on its “Cat” logo as a China trademark.

To register a color combination as a trademark in China, the application must include a color sample as well as a Pantone color. And the color combination must be sufficiently distinctive with respect to the covered goods/services. Trying to register red-and-gold as a color combination on wedding services in China would not get you far.

China lawyers

Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments or phone calls as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a quick general answer and, when it is easy to do so, a link or two to a blog post that provides some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

One question we almost always receive from clients who are seeking to protect a logo (or “device,” as it is called in the trademark world), is whether they should register their device in color or in black and white.

According to trademark practice in China, registration of a black and white device in China would protect the logo regardless of the actual color scheme used on the device, and for that reason we typically recommend our clients file an application for the black-and-white version of their trademark.

The exception is if the color scheme for the device is part of the trademark, such as UPS’ brown-and-beige, FedEx’s purple-and-orange, John Deere’s green-and-yellow. In that case you would in fact want to claim the color scheme, because it’s an integral part of the brand identity. But these are the exceptions, not the rule. For most companies, a black and white device is both appropriate and sufficient.

China trademark lawThe purpose of a trademark, from both a legal and branding perspective, is to identify the source of goods. It follows, therefore, that the best trademark is one that is both memorable and distinctive. You want people to associate your brand with your company, not confuse your brand with other brands. You also want to make sure that your brand is more than just a description of the product.

The latter issue seems to trip up a number of companies. If you have a cleaning product, you can call it “The Best Household Cleaner” but you can’t register that as a trademark because “Household Cleaner” is just a description of the product and “The Best” is (in theory) descriptive of the product’s performance. Look at it from the perspective of other market participants: if you could register “Household Cleaner” as a trademark, that means no one else could use the term “household cleaner” on their products and that wouldn’t make sense at all. The same logic applies to the phrase “The Best.”

In China, trademark examiners have always been strict on the issue of descriptiveness; they will reject anything remotely descriptive, whether it’s descriptive of the product, the materials used to make the product, or the function of the product. CTMO examiners will also reject many trademarks that in the US would be considered suggestive (and therefore distinctive enough to be registered).

When we inform clients that their trademark will most likely be rejected by the Chinese Trademark Office (CTMO) as being descriptive, many respond by saying that they can’t or won’t change their trademark (some are already selling products bearing the mark) and they want to know what their options are, because they are still concerned about protecting their mark from trademark squatters in China.

The odds are the same no matter who files for a mark: the “real” company or a trademark squatter. And while the odds are low for descriptive (or suggestive) marks, they are not zero. So should you still try to register a descriptive mark? If you try and fail, it will give you a small amount of added protection, as the decision would be accessible to a trademark examiner. That said, neither the CTMO nor Chinese courts are bound by prior decisions so it’s not guaranteed that a trademark squatter’s future application would be rejected on the same grounds. It’s quite likely, but not guaranteed.

The most likely outcome with a descriptive mark is that the application would be rejected initially and every time thereafter, which would mean that the trademark would effectively be in the public domain in China. Everyone would be free to use the mark, and no one would be able to stop anyone else from using it. If a company’s sole concern is being able to export safely, having an unregistrable trademark is probably okay. But if the company ever wants to market or sell in China, then it could have a thousand copycats and couldn’t do a thing about it.

China manufacturing lawyers

For obvious reasons, Chinese manufacturing companies are incredibly concerned about the state of US-China trade relations and this worry seeping into how they view the Western companies for which they make products. In particular, this worry is leading many Chinese manufacturers to view their foreign buyers as likely to eventually leave them and that makes them less interested in doing what it takes to maintain a good long term relationship. For purposes of this post, it also makes Chinese manufacturers a lot more likely now than even a year ago to as quickly as possible purloin whatever they can from their Western buyer so as to be able to as quickly as possible compete with the Western buyer with the Western buyer’s own product.

The China lawyers at my firm have a front row seat to all this because we get emails from many Western companies whose products are being copied weeks after they first meet with a Chinese manufacturer. In the old days (of about a year ago), it usually took years and a deteriorating relationship between buyer and manufacturer before the manufacturer would start directly competing. In other words, Chines manufacturers used to wait until they believed they could make more money selling YOUR product than they could making your product for you before they would compete. Today, many Chinese companies have made the calculation that they can make more money selling your product starting on day one.

What’s all this got to do with mold ownership agreements? A lot.

One of the best ways to stop or slow your Chinese manufacturer from competing with you is by legally blocking it from using your molds for anything other than making products for you. There are a lot of ways to accomplish this, but oftentimes the best way is with a relatively simple mold ownership agreement that makes clear the molds belong to you, your manufacturer cannot use them for anything other than making product for you, and your manufacturer cannot hold on to them once you seek their return. For more on the benefits of protecting your molds (and tooling as well) from China, check out the following:

There are a whole host of other things you can and in many cases should be doing to protect against your own China manufacturer, but a mold agreement is oftentimes a good and relatively cheap start. See Protecting Your Product From China: The 101. 

What are you seeing out there?

 

China lawyers

Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments or phone calls as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a quick general answer and, when it is easy to do so, a link or two to a blog post that provides some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

One of the questions both our China lawyers and our IP lawyers have been getting frequently of late — especially from the media — is whether it is possible too protect your IP from China.

To which I always start out with a lawyer answer: yes, maybe and no.

Yes, if you are making a product that the Chinese government does not care about, such as toys, furniture, clothing, most electronics, etc. But if you are making something the Chinese government really does care about, like high speed rail, or cutting edge semiconductors or cutting edge energy technology, the answer is maybe/no. Let’s just say that our China IP lawyers generally drafting contracts and doing China IP registrations for an IoT company than for a semiconductor company simply because we have a lot more confidence in the results we can achieve for the IoT company than for the semiconductor company and we tell our clients that. Nonetheless, even the semiconductor companies must do what they can (both legally and via their own protective systems) to protect against IP theft, otherwise, if that theft happens, they will have no legal arguments against it. See How to Protect Your IP from China.