FAQs

How do I enforce Intellectual property rights in China?

Q: How do I enforce Intellectual property rights in China?

A: Last year, I outsourced the manufacturing of a product I have developed and patented to a factory in China. More recently, I was alarmed to discover that my product seems to have been counterfeited and is being manufactured and sold (albeit with a different name) by another company in China. I have read that intellectual property rights are not strongly enforced in China. Is there anything I can do to stop my product being ripped off?

How to proceed depends on whether you registered a trademark for your product in China before you outsourced the manufacturing. If you have, then the most effective course of action is take an 'administrative action' against the infringing company through its local Administration Office for Industry and Commerce (AIC). The AIC will investigate the matter and if satisfied that the compliant is genuine, raid the premises of the infringer, confiscate any counterfeit products and prevent further infringement.

To do this, you will need to provide the AIC with a copy of the your trademark certificate, a sample of the counterfeit product and the identity of the infringer, for which you may need to appoint investigators to gather evidence. The AIC is pretty efficient and this course of action is almost always quicker and cheaper than taking the infringer to court – legal, investigatory and administrative costs in a relatively straightforward case would typically be around US$4,300 (£2,200).

The main drawback of this approach, however, is that although the infringer can be fined by the authorities, the injured party cannot claim any compensation from the infringer. For this, you would need to go to court, which involve a bit more time and cost and if your claim is against a smaller company, you would need to consider whether the expense would be worth it. Taking initial action through the AIC does not prevent you from taking the infringer to the court later on.

If you do not have a trademark in China, the situation is a little more difficult. If your product is patented or copyrighted, you can still take administrative action, but this will be handled by either the Patent Bureau or the National Copyright Administration respectively and there is more scope for alleged infringers to dispute the validity of your patent or copyright.

The moral of this story for any company looking to produce any IP-protected item in China is the importance of registering a trademark in China first. This only costs US$1000 (£500), but can prove to vital. It is quite common for people to register other company's products in China and as the trademark system works on a 'first to file' basis, proving your rights your product can be a slow and complex process.

Chloe Lee is head of the intellectual property practice at Stephenson Harwood & Lo in Hong Kong.

Disclaimer: The information provided is for general purposes and guidance only and does not purport to constitute legal or professional advice. Specific legal advice should always be sought before taking any action.