Debunking Common China IP Myths
Understanding intellectual property (IP) rights and navigating counterfeiting challenges in China are essential yet daunting tasks for foreign businesses. Despite a reputation marred by complex IP issues, much of the conventional wisdom on the subject is based on outdated information or persistent myths.
In this post, we address and debunk ten prevalent myths that can mislead foreign companies aiming to safeguard their brands in China.
Myth 1: Brand Protection in China is Impossible
Reality: Protecting your brand is entirely feasible. Registering a trademark in China for your goods or services is crucial. This registration enables you to request takedowns on Chinese e-commerce platforms, allows Chinese customs to seize counterfeit products, and supports trademark infringement lawsuits. A well-rounded IP strategy should also encompass copyright and patent registrations. The International Property Rights Index rates China 28th out of 125 countries on IP protections.
Myth 2: A Single Trademark Application Covers All Product Categories
Reality: Trademark protection in China is specific to certain classes and subclasses. If your products span multiple categories, you must register under each pertinent class and subclass. See China Trademarks: Register in More Classes, Take Down More Counterfeit Goods.
Myth 3: Foreign Trademarks Will Give You Some Protection in China
Reality: Foreign trademarks offer no protection in China. While Alibaba might honor a U.S. or European trademark on its global platforms, local Chinese e-commerce platforms demand a Chinese trademark registration for enforcement actions. Note also that direct filing in China typically provides stronger protection than relying on the Madrid Protocol. See Register Your China Trademarks in China not Madrid.
Myth 4: China Customs Recognizes Foreign Trademarks
Reality: Trademarks are jurisdiction-specific. Chinese customs will only act on a Chinese registered trademark, emphasizing the need for local IP registration. See Stop China Counterfeits By Registering Your China IP with China Customs.
Myth 5: International Fame Equates to Trademark Protection in China
Reality: Global recognition does not ensure IP protection under Chinese law. Although China recognizes “well-known” brands, the process to establish this status is both expensive and complex. Proactively registering your trademark in China remains a far more cost-effective strategy. See China’s Well-Known Trademarks: A Primer.
Myth 6: Outsourcing Manufacturing to China Leads to Lost IP Control
Reality: Through contractual measures like Non-Disclosure, Non-Use, Non-Circumvention (NNN) Agreements, and proper trademark registration, you can maintain control over your products manufactured in China. It is critical to have your Chinese counterparty sign your China NNN Agreement before you reveal any trade secrets.
Myth 7: Chinese Courts Favor Chinese Companies in IP Disputes
Reality: The Chinese legal system has progressed towards more balanced IP enforcement. Recent reforms have improved transparency and adherence to international standards, facilitating successful litigation for foreign companies.
Myth 8: Protecting IP in China is Overly Complex
Reality: Registering your IP in China is neither excessively difficult nor expensive. Engaging a qualified attorney to handle registrations and draft necessary agreements (like NNN, Manufacturing Agreements, Product Development Agreements, etc.) is well worth the investment.
Myth 9: Trademarks Are Unnecessary When Manufacturing in China
Reality: Even if you do not sell your products in China, it is critical to protect your brand through trademark registration when manufacturing there. Otherwise, a third party might register your brand name in China and use this registration to intercept your products, preventing them from leaving the country. See Manufacturing in China: China Trademark Registration Should be the FIRST Thing You Do.
Conclusion
Debunking these myths is vital for any foreign business entering China. With a well-informed IP strategy and proactive enforcement measures, companies can protect their intellectual property and succeed in one of the world’s most dynamic markets.
