Intellectual property infringement is a real and common risk of doing business in China. However, it is often undermanaged or not managed properly by foreign brand owners with operations and presence in China. The difference in legal structure to their home countries, more complex business environment, and general lack of awareness of IP protection may have contributed to the oversight and mismanagement. In this new segment of ExportRim interview series, we spoke to an Intellectual Property (IP) expert, Zhao Qing, in sharing his view about the importance of IP risk management if a brand owner outside of China has the intention to export to China.

Interview Questions

How did you become engaged in this field?

I am an IP lawyer advising multinationals on a variety of China-related IP matters. Prior to my current role (IP Expert Consultant, Greater China), I worked for a boutique risk management consultancy where I managed a large number of fraud investigation and due diligence projects in China for international clients. During that time, I became involved in quite a number of IP-related projects. Since then, my career focus gradually transitioned to IP work.

My current job involves different aspects of IP protection, from risk management strategy, legal case support, investigation, registration processing, and so forth. I studied law in both China and France, hence, I am fully fluent in French.

What are the main IP issues you have seen more recently?

From the perspective of foreign brand owners, brand protection in China has become more challenging, so does managing its own risk of infringement. One major reason is that infringers have learned from their past mistakes being caught, and nowadays have become more sophisticated. They are often mindful and resourceful in securing their own IP rights to shield infringing activities.

Furthermore, aggressive Chinese parties (not limited to infringers) are more likely to exploit gaps in trademark coverage or loopholes in a brand protection program, sometimes to the extent of proactively filing complaints against the original and legit brand owner to “claim compensation”. This is similar to IP trolls seen in other parts of the world.

Why registering a trademark before officially entering or launching operation in the Chinese market is so important?

If an overseas brand owner does not do that, infringers will research and find out, and then do it in advance before the original brand owner.

When a brand wants to open stores on major Chinese eCommerce platforms, such as Tmall and JD.com, a trademark registration certificate issued by the PRC Trademark Office is a must.

For those not selling in China but only using local OEM suppliers to manufacture and export products, a pirated, bootlegged, not authorized trademark can be registered by infringers with the PRC Customs. The consequence could be huge losses, financially, from the seizure of shipments before departing from a seaport.

If there is a dispute, what are the important considerations to build a case or defend a case?

Facts and issues in each dispute vary. The first step is to consult a capable legal/IP counsel to into the facts and issues, develop a litigation or defense plan, and also help you adapt to the situation to make sound business decisions with business objectives in mind. It is also advisable to think outside the box. For example, a settlement may well be an acceptable solution if it can be achieved quickly and the cost of settlement is reasonable compared to the potential loss in business.

For business thinking of launching export and/or making entry to China, what are the "must" steps to consider in managing trademark risk?

With the assistance of an IP counsel, my recommended steps include:

• List out the brands (including corresponding names in the local language) to protect, with the aim to develop a trademark portfolio in China;
• Conduct clearance searches to identify prior trademarks with a potentially high risk of citation;
• Conduct an online survey to obtain an overall picture of counterfeiting/infringing activities, and/or identify any hot issues of concern.
• Register trademarks, and simultaneously take action to clear and neutralize conflicts against your IP interest.
• Once trademark rights are secured, take measures to document evidence of use and monitor infringements periodically. For evidence of use, note that anyone can attack a trademark on non-use grounds within three years from its registration date, so a strategy is required to maintain “active” on such a trademark.

If you would like ExportRim to help you to contact Mr. Zhao Qing, please use the contact form..