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Manage your Intellectual Property in Mainland China, HongKong, Macao and Taiwan

case study

Always be well prepared

Belgian SME BEA manufactures sensors for automatic doors. Before they were active in China they had the foresight to file for an international patent that included the PRC as a designated state. Christian Nowak, Science & Technology advisor at BEA, shares the company’s experiences with patent infringement, and how enforcement can be successful if you have your documents and protection in place.

BEA (short for Bureau d’Electronique Appliqué) was founded in Belgium in 1965 and currently has five offices worldwide. Christian Nowak says: “We set up a representative office in China in 1996 to analyse the market and to find potential future customers. We were quite sure that the market was appealing for us, [and] the risk of getting copied was not strong enough for us to give up the potential”.

The company then prepared well by including China in the designated states for patent protection, even though they were not active in the country yet. Christian says: “We applied from Belgium for patents in the United States and included China as well. We have design patents, invention patents and a trade mark registered in China. It’s a very simple design patent which helped us during our case in 2002.”

Christian continues to explain the case: “We received two sensors in the after sales service that were not manufactured by BEA. One of our customers noticed that there were copies on the market and could tell us who was behind it.” BEA then sought advice from a Chinese patent attorney and chose to take administrative action via the State Administration for Industry and Commerce (SAIC). “I prepared a file with all details, pictures of the original products and the copies, and all our patent registration certificates”, Christian adds.

They went to the SAIC in the city where the infringement took place and the manager in charge dispatched two officers to raid the premises of the infringing company. Christian says: “After searching for 45 minutes at the warehouse I could find one sample of a fake product. We had the company sign a statement of their wrongdoing after which the case was closed.”

Christian recommends other SMEs to act early: “Because we were quite early on this case it couldn’t spread throughout China. As SMEs are not always aware of IP issues, it is good to have a support service like the Helpdesk to give them all information”.

 

Lessons learnt:

  • Get ahead of potential infringers and register your IP in China, preferably before entering the market.
  • Keep your IP registration documents and proof of infringement at hand so you can immediately prove your case if needed.
  • Don’t be afraid to enforce your rights, China’s IP legislative system is developed and the authorities can assist you.

For more information, please see:

 

The value of a Chinese trade mark

English Trackers provides English editing and proofreading services to companies worldwide. Bridget Rooth set up the company in 2008 and her vision was to build a strong brand that she would be able to sell one day. Bridget shares another reason for registering a trade mark in China – besides adequately protecting your brand.

“I think IPR is very complicated for small companies entering China because they don’t have big legal teams in-house”, Bridget says. “I had the advantage of having been exposed to business in China – and particularly IPR – while working my first four years in China for a foreign law firm. As soon as I had my business license I started the procedure to register my trade mark.”

Another issue Bridget mentions that small companies face in China, is working on a small budget. She says: “Having a miniscule budget meant I did the job myself. I found a local trade mark agent via a Chinese friend, the costs of registration in one class were ¥ 2,000 (± € 240).

Bridget mentions that the reason to register her trade mark was to enforce her rights in case of infringement, but so far no illegal copies of her brand have sprung up. However she recently encountered another use for having her trade mark registered. “If you want to verify your Sina Weibo account (Chinese equivalent of Twitter), which is definitely worth doing if you want to grow your fan base, you’ll want to use your logo in place of a photo on your account. To do that, you need to prove you own the brand.”

“Go register your brand!” says Bridget. She also advises SMEs to use all resources available when establishing themselves in the Chinese market. “Use Chambers of Commerce and services like the Helpdesk to assist you.”

 

Lessons learnt:

  • Register your trade mark as soon as you register your company in China.
  • Realise that your trade mark doesn’t just protect your brand name or logo, proving that you own the brand can be required for other business purposes as well.

For more information, please see:

Start with your trade mark

Founder and owner of German SME Natooke Ines Brunn wanted to promote biking in China and decided to set up a shop selling cool and colorful bikes. Natooke was the first store in China to build bespoke fixed gear bikes using bike parts from around the world, and aims to make biking hip and modern again. As a hip brand requires adequate trade mark protection, Ines shares her experiences in registering the trade mark and how this registration benefitted her business.

 “When I started my business I had never thought about registering my IP. I had a bit of a misconception that only big companies can register IP”, Ines says. “When a friend suggested that that I should register my shop name and the brand names of products that we sell, I contacted the China IPR SME Helpdesk for advice.”

The Helpdesk provided first line advice on different ways to register the trade mark, and Ines decided to register through the international system. When she had to transfer the trade mark to her own name a few months later, Ines contacted the Helpdesk again. “They gave me a lot of information, the process is not difficult once you know how it should be done”, Ines says.

“When I registered my trade mark it was just to protect my logo, but over time people approached me that wanted to open a franchise shop”, she continues. “At the moment we have a franchise shop in Chengdu, and I am very happy that I decided to register the Natooke trade mark, because using the franchising system to monetise my brand wouldn’t have been possible if the trade mark hadn’t been registered”.

What recommendations would Ines give other SMEs, based on her own experiences? “If you have your IP registered you do not only protect your brand, but you can do franchising agreements and generate business from it. I recommend other companies to immediately think about IP and have it registered.”

 

Lessons learnt:

  • Register your trade mark, in your own name, as soon as you register your company in China
  • Realise that your trade mark doesn’t just protect your brand name or logo, it can be used to monetise your brand as well.

For more information, please see:

Fighting online infringement

Vogmask is the leading anti-pollution mask available in China - using a revolutionary microfiber filtration fabric. Christopher Dobbing founded Vogmask China in 2013. Originally an education consultant, Christopher found that most students he worked with mentioned air pollution as major challenge for China in the next 10 years, and that many of them had breathing illnesses or carried an inhaler with them. When searching for a good quality mask that he could recommend to students, he got in touch with Vogmask USA. Vogmask UK and Vogmask China were born shortly after.

“Vogmask China was founded in 2013 and our business has grown rapidly since”, say Christopher. “The market for air pollution products is growing, and until we entered the market no good pollution masks for children were available in China”, he continues. “Our masks are available at hospitals, international schools and online. Because the designs of our masks is adaptable we can be creative in branding. Vogmask is a combination of fashion and function.”

Not long after its market entry, Vogmask found counterfeits and unlicensed products on the Chinese online retail platform Taobao. Christopher explains: “We monitor the market carefully and conduct a weekly online check. The volume of infringing products grows every week and includes both copies of our products and illegal imports of real products, meaning that the seller didn’t pay the required 17% import tax.”

Through the EU SME Centre Christopher came in touch with the Helpdesk, who provided information on how infringing goods can be taken down from Taobao. “This has been very useful and we have a clear idea on how to act now”, Christopher says. “We registered our trade mark in China immediately when we entered the market, but as registration processes in China can take some time, we are still awaiting our trade mark registration certificate. We need this certificate to prove to Taobao that we own the brand, and only then can we start with the take down procedure of infringing products”.

Other than the continuous battle with online infringers, Christopher has an adequate IP strategy in place. He states: “As the filters used in our masks are too advanced to be copied cheaply, the quality of infringing products is not nearly as good as the original. As people are aware of the health issues regarding air pollution, they won’t buy a cheap copy instead of the real product.” According to Christopher, the design of the masks changes frequently, so copycats can’t keep up with the changes: “The design of our masks changes every year, people want to keep up with new trends and would therefore not buy a copy of last year’s design.”

As a recommendation to other SMEs operating in China, Christopher advises: “Monitor the market, keep track of the business environment and deal with challenges as they arise. Start the process of registering your trade mark as soon as possible, because the registration process in China is very time consuming. Things take longer in China then they do in the UK, so you really need to assign time for all registrations in order to manage your business well.”

 

Lessons learnt:

  • Register your IP in China – better too early than too late.
  • All Chinese large online selling platforms have channels to take down infringing products. Use these to tackle online infringement.
  • Regularly monitor the market to keep up with infringers and act immediately.

For more information, please see:

 

22/04/2015 - Check out the latest post from Your IP Insider

22/04/2015 - Your IP Insider Blog post: E-commerce Platforms as Nests for Counterfeiters: A Case Study

The growth of e-commerce in China has not gone unnoticed: in fact, along with it comes a
renewed and sophisticated way for counterfeiters to enlarge their businesses. This China IPR SME Helpdesk blog post written by Dr Paulo Berconcini, consultant at CARROLL, BURDICK & McDONOUGH LLP, explains this trend using a case study example. To read the blog post, please click here.