If you have ever had the opportunity to negotiate with Chinese suppliers, you would know that the word “impossible” does not exist on this market. It is enough to look around in Chinese streets full of well known trademarks or products that really look like famous brands. So when you think about it, there should be nothing easier than finding a manufacturer who created those. And of course you can find a supplier who will make all dreams for your products come true. But usually those dreams include some hidden details connected with trade mark and intellectual property law. Do you actually know how to deal with them in China?
Let’s start with a few words about Intellectual Property Rights (IPR) themselves. International laws, including Chinese laws, grant legal protection to trademarks providing they comply with a few basic requirements:
1. The mark must be distinctive
2. It must not have previously been used by others in the same market
3. It must not describe the product, e.g. you cannot register ‘apple’ as a trade mark for apples.
China has two routes to deal with IPR enforcement. The first, and most established route, is through the administrative enforcement procedure. This is where a complaint is filed at the local administrative IP Office by the IPR owner. The second route is via the judicial route, where legal proceedings are initiated in the court system. It is worth noting that China has specialist IP Panels in its civil courts throughout the country to deal with disputes. Many IPR owners elect for the administrative enforcement channel as it is often faster and more cost effective than through the court system. However, the penalty for infringement is limited to a fine for the infringer, which goes back to the State. While this system does not result in a payment to the IPR owner to cover damages, it does at least stop the infringer from continuing the infringing activity. Conversely, enforcing through the court an IP owner can claim compensation from the infringer, thus patent owners often opt to enforce their IPR through the courts.
Basically you have to beware of two sides of Intellectual Property management. On one hand, you have to make sure that you protect your Intellectual Property well; on the other hand, you need to be careful not to violate someone else’s rights.
The first and the most important rule of trade is no doubt – awareness. When starting the negotiations in China, do not trust promises which cannot be proved.
What about original products of well known brands? – You might ask. Of course, all of us know that most of those are being produced in China. So when putting all together – why not import them from China? Though these products are being produced here, it is not that easy. You have to remember that in case of well known brands, it is impossible to import their products legally without using the official channel of distribution. If you decide to cooperate with supplier offering you “original” products with no problems, you have to beware of problems with duty clearance. After all it might also end up that something happened to the logo on products you bought or somehow the brand name was misspelled.
On the other hand in mainland you might find without any problem factories that will offer you another customers design without mentioning that this customer is the owner of its copyrights. If you were offered someone else’s products, then it would stand to reason that other customers will get an offer which consists of your designs.
What is the solution then? Keeping in mind that Chinese system of IPR protection is still in the phase of growth, you should first of all be careful. Make sure that you know what you order
and that your supplier knows what his company is dealing with. Do not count on finding only fair offers there will always be someone who will be hoping for your lack of knowledge.