How do I Protect my Intellectual Property in China?

This is always top of mind for new companies launching consumer products that have an intellectual property advantage over competitors. Everyone is well aware of the horror stories of IP piracy in China and the lack of enforcement to protect intellectual property. It’s worth noting that these problems exist in MANY countries, although China gets the most attention for this in the media.

We as a company have never experienced a problem with this, but we have heard stories from other entrepreneurs and CEOs about how they learned of counterfeit products showing up on Ecommerce websites, or in stores, and how they dealt with it. Essentially, they stopped production with the violating factory and sourced a new contract manufacturer to work with. In general, IP protection is important and the risks can be mitigated in several ways:

1) Source a reputable manufacturing partner and examine their track record with other customers. Generally speaking, good organizations don’t rip off their customers.

2) Maintain a regular presence at the factory in China. Having people you trust watching out for you on the production floor is a great asset for many reasons, one of which includes the ability to watch for signs of suspicious activity (e.g. a second set of molds, your molds being run when they’re not supposed to be, etc.).

3) Legal protection. A good China lawyer can help you create contracts and non-disclosure agreements that will provide a contractual foundation for your IP protection. Going after Chinese manufacturers for damages can be considered complex undertaking, and is likely not worth your investment if there is not a considerable amount of money on the table. However, if you do not have the appropriate contracts and agreements in place, you’ll have no basis for recourse whatsoever.

In addition, the registering of your IP in China, including trademarks and copyrights, is also an important element of protecting your brand and IP. It goes without saying that doing these things in the United States, or whatever market you are operating in, is critical.

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by Julia Houck-Whitaker President & Founder, Hem Gems LLC