In addition to the considerations set out elsewhere within this section of the Helpdesk website, you should be aware of and take the following steps to ensure its intellectual property protection before entering the market:

• Ensure your intellectual property rights are registered in China. Patent, utility model, design and trademark rights are territorial which means they have to be claimed and asserted in each country individually. You should also be aware of the fact that remittance of royalties to a licensor (for example yourself) is often very difficult where the rights in question are not registered in China, or the license agreement in question has not been submitted for official recordal.
• Due diligence of your Chinese partner. You should consider conducting due diligence into your potential licensee to learn about its track record for observing intellectual property rights, or infringement if any, and if the licensee is actually who it represents itself to be. This will contribute to upholding any distribution and/or confidentiality agreements you enter into.

In China, an action against unfair competition may offer protection in situations which are not specifically covered by the laws protecting intellectual property. An action against an infringer based on intellectual property regulations requires proof of relevant rights and infringement whereas a claim for unfair competition may not require proof of registered rights in China. For instance, trade mark infringement may be limited to situations where an infringer uses a trade mark identical or similar to another registered trade mark without authorisation from the trade mark registrant. Whereas, in an unfair competition claim, use of an unregistered trade mark, or using names, packaging, or decoration similar to a well-known mark, enterprise or name on a good may be actionable under unfair competition, even if not necessarily actionable under intellectual property laws. Having said that, the levels of proof required to show that a trade mark is well-known in China is high.

Unfortunately unlike in many European jurisdictions, the availability of unfair competition actions is much narrower. Typically where you have already registered intellectual property rights in China, you would take action under the intellectual property regulations. Where the activity at issue is not actionable under the intellectual property regulations (e.g. trade secret misappropriation), or you do not have relevant intellectual property rights in China (e.g. in the case of unregistered trade marks) you should consider whether unfair competition actions are available.

Unfair competition covers misappropriation of trade secrets, false advertising, tie-in sales, disseminating misinformation with the aim of damaging the goodwill of a competitor or its products etc. Therefore, the relative effectiveness of intellectual property and unfair competition claims would depend much on what activity is at issue and whether or not you have registered rights in China.

In most European jurisdictions, there is a two-year ‘statute of limitations’ for bringing claims of intellectual property infringement. This means that you have to take action within 2 years from the time you knew or should have known about the infringement. This means that you not only knew of the infringing product or act, but also the identity of the party responsible for the infringement. You do not ‘lose’ your intellectual property rights if you fail to initiate an enforcement action during the 2 years. However, your ability to take an enforcement action against the same act of infringement may be forfeited – it operates basically like a waiver of your right to take action against the infringement in question. Where the infringement is ongoing, enforcement action can still be taken. You should however, expect the infringer to dispute the level of damages that should be awarded to you – it is likely that you may not be able to recover damages which are older than the two-year period immediately preceding the date action is taken.