A new client the other day asked me what it should be doing to protect its IP in China and I asked whether they wanted the ten-minute version or the ten-day version. Fortunately for the both of us (and not surprisingly), they chose the ten-minute version and the below is basically that.
I regularly speak on how to protect IP in China and the above visual is nearly always my first PowerPoint slide and the below is my standard accompanying explanation. Note that the advice below applies with equal force to Thailand, Malaysia, Vietnam, The Philippines, and Taiwan. Heck, it applies with pretty much equal force to India, Mexico, and Poland as well, and to pretty much every other country in the world too.
The first key is having a good partner
Having a good partner matters because a good, financially healthy partner company is less likely to steal your IP because it has something to lose, both with you and generally. China’s economy is in a substantial downturn, due in large part to the US tariffs and to US and EU duties on Chinese products. See Has Sourcing Product From China Become TOO Risky? This means more than even the usual number of Chinese companies are not good partners and so finding a good Chinese partner just got tougher. See e.g. China Trademark Theft. It’s Baaaaaack in a Big Way. Needless to say, due diligence is a vital part of finding a good partner (see On the IMMEDIATE Importance of China Manufacturer Due Diligence).
The second key is having a good contract with anyone to whom you reveal your IP
The right contract or contracts will depend on your specific situation. The most common contract for IP protection is an NNN Agreement (this is a more thorough, more complicated and, most importantly, more China-centric version of an NDA). But this might also include a trade secret agreement, a non-compete agreement, a confidentiality agreement, a non-use agreement, a licensing agreement, or many other sorts of contracts tailored for your specific situation. For making sure whatever contract you use to protect your IP actually works for China, check out The Five Keys to A China Contract That Works.
The third key is good IP registrations
This might include any combination of trademarks, copyrights and patents. It also usually makes sense for you to register your IP with China Customs (see How to Stop China Counterfeits: Register Your China IP with China Customs) and with the Customs Office in the country to which your products will be shipped.
And then just constantly monitor and protect your IP both online and offline. See Getting Counterfeits off Alibaba.
