In a 2012 report by the U.S. Chamber of Commerce revealed that the four members of so-called BRIC group of emerging economies— Brazil, Russia, India and China—have one more thing in common: they received the lowest scores for protecting copyrights, patents and other intellectual property.
With the China-Australia Free Trade Agreement in effect as of December 2015, China is now Australian’s largest trading partner and presents huge opportunities for local businesses. IP protection is an important business and can make or break your business. As we see more and more Australian businesses take their inventions overseas, it’s important to ensure protection of their ideas and inventions in foreign markets. Particularly in markets where protection is lower, it becomes even imperative to be well-informed and be prepared as early as possible.
Here are the top tips for anyone who wants to do business in a place where IP systems are hard to navigate.
1. Plan your market entry
Do your research and develop a market entry strategy before entering the market. Generally, you need to consider the time and cost to register IP rights, if parts of the application require you to file in person, manually or in-person, as well as translation costs. It is important to know that there is no such thing as a 'worldwide patent'. To obtain similar protection in other countries, you have to make a separate patent application in each country, or file a single international application under the Patent Cooperation Treaty that is administered by the World Intellectual Property Organization. This allows you to file a single international application that has the same effect as filing a separate application in each country involved in the treaty.
2. Know the local norms and rules
Each country has its local norms and rules and it’s crucial to know what these are and possible implications for your business. In China, for example, trade marks are granted on a “first to file” basis. This means that the first person to file a trade mark application will own the mark, regardless of who developed or first used the mark. “Trade mark squatting” is another common issue. Due to the “first to file” trade mark system, a company or individual can apply opportunistically for a trade mark with the intent to sell the mark back to its original creator or take advantage of its international reputation. The best way to prevent trade mark squatting is to register your trade mark – in English and Chinese or its local versions – before anyone else does.
3. Choose your partner carefully
Before entering into discussions with local manufacturers or potential business partners, it is vital to have them to sign a non-disclosure agreement that has been specifically designed for the local market. These contracts may be written in the local language, but the key thing is to ensure that the contract is recognised by and can be enforced by local laws. Upon making its local partnership formal, SmartTrans, an ASX-listed company that provides mobile and internet payments services which has been operating in China for the last 10 years, continued to place the safety and protection of its IP above anything else. The Australian company did part of its development in Australia and in China, adopted a distributed software hosting model, and flew in staff from Australia for critical projects.
4. Enforce your rights
Once your IP rights have been secured, you should monitor the market for infringements. In China, most Chinese e-commerce sites have takedown procedures that allow IP rights owners to apply and have IP infringing product listings removed. If you are concerned with infringing products being exported or imported, it would be useful to register your IP with China Customs. Most IP seizures made by China Customs are trade mark infringing goods being exported from China. Note that administration and enforcement of IP laws in China is quite different to Australia. Enforcement is available through administrative and judicial avenues including administrative enforcement by local government for small cases, civil litigation through local courts which is usually for IP cases involving foreign entities, and criminal enforcement through Public Security Bureau for cases that exceed fixed criminal threshold.
5. Seek professional advice
By all means, reduce costs by doing your own IP research first. Start by looking at the sources available on our website or try the Google patent search. As you go along, you might find that’s useful to engage an Australian IP adviser with experience in the overseas market to facilitate contact with a local attorney who can represent you before the local authorities. IP lawyers and consultants can assist any business to register a trade mark, patent, or copyright protection, and implement a complete intellectual property strategy, from creation through to enforcement.