Intellectual Property Protection in China



We recognize that foreign enterprises doing business here in Mainland China often have intellectual property protection and trademark enforcement issues.  However, there is a safe way to do business here – by recognizing that the Chinese legal system operates differently from any other developed economy.

In our experience over the last ten (10) years of providing legal services here from China, it is most often a situation where foreigners operating here ignore the legal and procedural differences between doing business here in Mainland China and doing business in other, most often, Western countries.

For example, in most of the world, a patent / trademark / copyright is owned by the person that creates it, from the time it is created.  This goes so far as to allow you to sue me and recover your intellectual property where, via some form of subterfuge or industrial espionage, I was able to reverse engineer or otherwise steal something valuable from you.

By contrast, China is a first to file country.  That means that if I file a patent against your interest here in China first – then I own your patents / trademark.  And there is nothing you can do about it.  I would have broken no laws, violated no treaties or other international conventions of any country by doing so.

There is a way to try to recover it, but you will have to overcome presumptions that the IP belongs to the Chinese patent filer.  Pfizer did in fact recover Viagra® after more than a decade in court here in China. 

Thus, it is most often a basic misunderstanding of the existence of multiple but conflicting legal systems at the root of many intellectual property problems foreigners have in Mainland China.  Actually, that is why we identify ourselves as attorneys and international counselors in the header of our law firm.  For we need to help clients operate in two worlds at the same time, while remaining protected in both.  How?

Well, let us first take a moment and clarify some common misunderstandings about intellectual property. 

  1. There is no such thing as an “international patent.”

We often initiate an IP matter for a client and are told, “But we filed our patent internationally and the Chinese have stolen it from us and are now competing against us!!”   

However, existing intellectual property treaties deal with ‘tacking back’ to a priority date, rather than actual filings and ownership of the IP.  Tacking back means, for example, that if I file a patent in the USA and while doing so I pay the extra USD 300 to the US Patent & Trademark Office to also protect myself in China, I have not filed an international patent.  I have just reserved a priority right.

Only after also filing in China, or any countries where I want protection, would I be protected.  Thus, we actually advise clients to file in China first, and thereafter file in all other relevant countries.

  1. Patents, like criminal law, are nation-state based and focused.

We live in a globalizing world.  That means we are all getting used to dealing with bilateral and multilateral agreements, EU Directives, Anti-Dumping actions and the like. 

However, intellectual property law should be thought of more like criminal law rather than the kinds of international law we are getting used to using in our everyday affairs.  For example, the drinking age in China is 18 years old, while in the USA it is 21 years.  So, if I sell an alcoholic beverage to an 18 year old US citizen in China, I have committed no crime.  However, if I sell that same alcoholic beverage to an 18 year old Chinese citizen in the USA, I have committed a crime.

One must look at the conduct + where it occurred + which legal system governs the situation.  And so – we can never impose the standard of one country onto conduct happening in another country.

  1. Customs is a domestic policing matter and enforcement deals with cross border products.

Customs officials of every country are charged with enforcing intellectual property law in a domestic context as is related to cross border products.

Thus, if you have a patent in Germany and a copy-cat competitor is trying to sell into Germany on a product they have copied from your IP, you need not even spend your own money to protect your own interests.  You merely need to report the offending goods and they are generally seized and destroyed under the power of the State.

However, if you have not filed your patent in Germany, then the State is powerless to assist you in protecting your intellectual property.  You enable the machinery of the State to act on your behalf, by using their policing power to protect you – only after you follow the rules of the local jurisdiction.

China is exactly the same.  You can be protected only after respecting and following, the local law.

     So, how does one follow the local law here in China? 

By filing all patent / trademark / copyright at the State Intellectual Property Office (“SIPO”) in Beijing – which is most effectively done by having a Chinese entity under the post-WTO structure that has been in place since the end of 2004.  In fact and as noted already, we advise that whenever possible, one should file in China first and thereafter file in all other relevant countries as are deemed necessary.