China intellectual property tactics evolving
10-Nov-07
Trimmed by IPsoon Global Agency
China intellectual property and trademark landscape is changing very quickly, according to sources at the China Pack conference, held May 23-24 in Chicago.
Although intellectual property issues eventually will be addressed in China, it is just one of a huge number of social and economic issues that the Chinese government needs to address, said Tianjun Hou, an associate with law firm Foley & Lardner LLP in Palo Alto, Calif. He spoke about intellectual property in terms of China's broader economic environment.
"Much has been reported on China's red-hot economy,'' he said. "Eight-hundred [research and development] centers have been established by multinationals in China.''
Foreign companies have invested $580 billion in China between 1995 and 2006, and the investors include more than 400 Fortune 500 companies.
Still, for China, 800 million people still are in farming, many of whom are at subsistence levels and not well-educated; 200 million rural people are either unemployed or underemployed; 100 million to 150 million migrant workers who converged on cities need to be integrated; 12 million jobs are needed per year to keep pace with growth in population. In the entire schematic of the Chinese economic revolution, the national pension, health care and adequate housing are urgently needed. The western part of China remains significantly less economically developed.
Against that background, Hou said, the government will place emphasis on intellectual property protection in proportion to the extent that the issue is deemed to impact China economic growth.
National strategy
Under the Chinese government Eleventh Five Year Plan, announced in 2006, there will be a focus on developing science and technology where self-reliant innovation is a national strategy.
A national intellectual property strategy in line with the plan is expected to be released at any time, Hou said.
It also is important for Western companies to understand that domestic Chinese companies increasingly develop their own intellectual property and lobby for more effective protection.
Intellectual property largely is territorial in nature, he said, and U.S. patents and trademarks do not provide protection in China. The U.S. patent and trademark must be filed and registered in China to be enforceable there.
Under the Berne Convention, there is no need to register U.S. copyrighted works for them to be enforceable in China. However, according to Hou, registration is recommended to facilitate that enforcement. And, if a U.S. firm doing business in China does not file patent protection in China, it should fully expect that someone else in China will, he said.
With trademarks, the rights are awarded in China to the first to register, not the first to use the trademark. Therefore, ¡°it is strongly recommended to register your trademark as early as possible in China,¡± Hou said. There also is a huge backlog in the Chinese trademark office, and it takes 30 months to register a trademark.
Protecting rights
To secure intellectual property rights in China, Hou said companies also must be aware that China is part of the Patent Cooperation Treaty and Madrid Protocol, and companies should use international treaties to secure their rights. Also, companies should work with good local counsel within China to ensure an enforceable patent and a good Chinese version of a trademark.
IPsoon Global Agency comments:
Foreign companies should apply for their own China intellectual property rights to protect business profits when they first come to China.