ECA

How to avoid losing your intellectual property in China

15.07.2019 IP Australia

If you’re looking at expanding your business to China, protecting your intellectual property (IP) should be one of your highest priorities. In my role supporting Australian businesses at the Australian Embassy Beijing, I’ve seen two main ways Australians fail to protect their IP in China, both of which are largely preventable.

The first issue I see is Australian companies failing to register their IP rights in China. IP rights are territorial. An Australian patent, trade mark or design provides no protection in China. You need to apply to register your IP rights in any territory where you want protection. It’s also important to note that registration is separate in mainland China, Hong Kong, Macau and Taiwan. If you develop an IP strategy and register IP rights in target markets, you’ll be off to a good start.

Trade marks are important for almost every company, regardless of what goods or services you provide. In China, with few exceptions, the first person to apply for a trade mark gets it. This is why it’s important to file for trade mark protection in China as early as possible - so trade mark hijackers don’t beat you to it. An Australian trade mark or patent attorney can help you register trade marks, patents and designs in China and other overseas markets. Also consider registering a Chinese language trade mark and Chinese top-level domain names before you enter the market.

The second issue I see is companies using contracts that are unsuitable for China. You should seek legal advice on all legal agreements for China, and ensure a Chinese lawyer drafts or reviews your contracts to be suitable for local conditions. In particular, make sure your contracts will actually be enforceable in China. Chinese courts won’t enforce Australian or most other foreign court judgements, so the contract needs to carefully consider where any disputes would be resolved.

If you register your IP rights in China early, and seek local legal advice on your contracts, you can avoid these two common issues. If you’d like to know more or get in contact, visit IP Australia’s China page for further resources.

 

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