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Previously seen largely as a low-cost manufacturing base, China is increasingly becoming an important market. Indeed, the Chinese market is now the number one market for many Western luxury branded goods.
China’s reputation for enforcing intellectual property rights is patchy but the situation is improving. China’s intellectual property laws are up-to-date. In fact, they are largely based on German laws. The Chinese Intellectual Property Office is efficient. Enforcement of intellectual property rights in China is handled locally/regionally rather than at a national level and so results can be variable, but the situation is improving. Steps are, though, being taken to improve matters. As Chinese companies increasingly seek intellectual property rights outside China, the Chinese government recognises that the rights of overseas organisations must be respected in China.
Compared to other countries the cost of seeking protection in China is moderate, and excellent value in terms of the potential market China offers.
So, the simple answer is that if China is a market, potential market or manufacturing base for you then you should seek intellectual property protection there.
We recommend that you register your trade marks in China before taking any steps to enter the Chinese market. Regrettably, we have seen countless examples where enterprising Chinese individuals and companies have registered trade marks of UK companies. Often these were distributors and potential partners of the UK businesses. Even where a trade mark is well known in the West it can be extremely difficult or impossible to recover ownership of the marks in China. It is certainly a good deal more costly to attack a registration than to obtain one.
We have been assisting companies seeking intellectual property protection in China for many years. We visit China and have a network of trusted associates there. Recent deregulation of the Chinese market for provision of certain types of intellectual property services to overseas companies has led to a flood of competition. However, we caution clients about engaging low cost Chinese attorneys directly. Many are simply not used to dealing with Western companies and will not provide the service you expect. There are also traps for the unwary. For example, whilst in the UK a trade mark registration which specifies footwear provides protection for the trade mark in relation to all types of footwear, under the Chinese system footwear is not taken to include running shoes!
It is also worth thinking about whether to file for protection in Hong Kong. Hong Kong is far more westernised than mainland China and as a result, a lot of trade with China takes place through Hong Kong. Therefore, protection in Hong Kong can be extremely useful if enforcement is a priority as the Hong Kong legal system is much more similar to the UK legal system than the Chinese system.
If you would like to discuss whether you should seek protection in China, please get in touch to speak to one of our attorneys.