IPR seems to be one of the biggest concerns for companies that consider of entering Chinese market. First thing to remember is that international patents do not apply in China. Three different types of patents can be applied under the China’s Patent Law:
- Invention patent – valid for 20 years and subject to annual fees. The registration procedure time varies depending on the case. In general, the application process goes through the procedures of acceptance of application, preliminary examination, publication, substantive examination and approval.
- Utility model patent – valid for 10 years and subject to annual fees. The registration procedure time is around 5-8 months. Registration application usually goes through the procedures of acceptance of application, examination and approval of the authority.
- Design patent – valid for 10 years and subject to annual fees.
The patent is granted based on novelty, inventiveness and practical applicability. The documents shall be provided in Chinese.
One may also protect its trademark, which is important factor in branding and localization process. First-to-file principle applies in registration. One should consider whether to apply the trademark in both Western alphabets and in Chinese characters as significant number of Chinese still can only recognize their own characters.
I am often asked whether it is worthwhile to apply patents in China as it is time and money consuming. There is not one clear answer. For the branding purposes I definitely recommend to protect the trademark and make clear its origin. Finland has very good reputation in China. Our products and services are considered of high-quality, advanced and ecological. Not to mention, how reliable and easy going people we are.
IPR infringements do happen in China a lot. However, nowadays foreign companies get more equal treatment in Chinese court than before. But if you have not patented your innovations locally in China, you may not sue the copycats.
You should consider how critical for your product or method is to be protected. Consumer products can be copied rather easily if they are already available in the market. If your products are copied and sold in the Chinese market, it is a good sign. It means that there are indeed people in the market who like your products and design and therefore the copies are made. However, Chinese consumers have become very brand conscious and are willing to spend more money on the original product than the cheap copy. It is the brand and country of origin that counts. Therefore, make sure that your brand and trademark are known if you want to sell your original product in China.
In the case of high technology products and processes that are difficult to replicate I would recommend applying for Chinese patent -unless you may keep the manufacturing processes secret. It is common for industrial manufacturing companies to transfer only parts of their production to China and maintain some critical parts in someplace else or carry out the installation themselves. In some cases the Chinese manufacturers have copied the design of foreign brand identically but the technology has been totally different. In these cases it is again a benefit to have protected trademark to prove the origin of the product.
Sometimes you do not even need to go to the court to demand your rights. One CEO of Finnish machinery company told a story how their machinery was copied identically from the outside but otherwise the product was of poor quality. The replicates were being sold to the clients of the Finnish company. The CEO and his colleague, both big and tall Finnish men, went to talk directly with the owner of the copy making factory and told him kindly but firmly: “You do anything else that you wish but stop copying our machinery”. That was enough and no more copies of their machinery were made.
Whatever your protection need is I advise you to discuss on different options with professional patenting officers or other. There is not a simple guidebook for IPR in China, but who ever said China is a simple market ;)?