Protect first, enforce when you need to
First, however, you need some rights
If China is remotely on your horizon, think about your IP before you book the flight. China remains an extraordinarily active trademark jurisdiction. Recent annual filings have been running at roughly seven million applications — approaching 20,000 every day. Amongst all those applications could eventually be something inconveniently similar to yours.
Bad-faith filing remains a problem. China's Trademark Law and examination practices have developed provisions aimed specifically at malicious applications and trademark hoarding, and regulators continue to act against bad-faith filings. But the better strategy is still not to need those remedies in the first place.
Register early
Register the appropriate English-language marks and think carefully about your Chinese name and Chinese-character trademarks. For some businesses, the Chinese name may eventually become as valuable — or even more valuable – than the English name. And own the registrations yourself.
Do not casually allow your distributor, agent, employee, customer or "good friend who knows somebody" to register your trademark on your behalf. The cleaner structure is generally: You own the IP. Your Chinese partner receives clearly documented rights to use it.
Trying to unwind ownership later through bad-faith proceedings is considerably more expensive than registering properly at the beginning. Lawyers, rather inconveniently, also like being paid.
Contracts and know-how matter too
Not everything valuable can or should be registered. Formulas, manufacturing methods, customer information, software, technical processes and commercial know-how may depend partly on confidentiality and trade-secret protection. That means thinking about NDAs, employment arrangements, manufacturing agreements, licensing arrangements and distributor contracts. Most importantly, agreements involving China should be drafted with actual enforcement in China in mind.
A beautifully written New Zealand contract that becomes commercially impractical to enforce against assets and activities in China may provide rather less comfort than its page count suggests. For important China matters, consider getting advice directly from experienced lawyers practising in China. Two service providers within the wider New Zealand–China business community are George Chan in Beijing and Rocky Meng in Shanghai. Both have experience engaging with Kiwi businesses and understand that the needs and budgets of SMEs can be rather different from those of global multinationals.
They are not the only options, of course. Companies should undertake their own due diligence and choose counsel appropriate to their circumstances. But the broader point is important: sometimes it makes sense to short-circuit the process and speak directly with appropriate counsel on the ground in China.
What if somebody has already taken your mark?
Don't panic — and perhaps don't immediately start sending angry WeChat messages either.
Preserve the evidence. Who filed it? When? What relationship, if any, did they have with your company? Have they registered other foreign brands? Have they approached you seeking payment? What evidence exists of your earlier use and reputation?
China has strengthened mechanisms for attacking bad-faith trademark registrations, but evidence matters. China also does not replicate Western-style litigation discovery in exactly the way many New Zealand businesses may expect. So collect what you have and call your legal counsel early.
Four practical takeaways
After several decades of dramatic change in China, perhaps the most dangerous thing for a Kiwi exporter is relying on a mental model that is twenty years out of date. China's IP system is not perfect. Neither is anyone else's. But the proposition that "you can't enforce IP in China, so why bother registering" is increasingly difficult to reconcile with what is actually happening.
For Kiwi companies, you can reduce it to four principles:
1. Treat China as a serious legal jurisdiction rather than assuming protection is impossible.
2. Secure your rights early and understand what creates value in your business and protect it appropriately. Register your English and Chinese marks and retain ownership yourself.
3. Don't be afraid to enforce as an IP right that everyone knows you will never defend eventually becomes a rather weak commercial asset.
4. Choose your advisers carefully and find China-based counsel who understands both the law and the commercial realities of your business.
China's extraordinary economic transformation has involved plenty of imitation, technology transfer and IP disputes along the way. But it has also created Chinese companies with enormous amounts of intellectual property of their own. Those companies want protection.
And that, perhaps more than anything else, explains why the system has changed. For many of us who have dealt with China for a long time, old perceptions can be surprisingly difficult to let go. But modern China deserves to be assessed on modern evidence. The numbers may vary depending on the measure and year, but the direction of travel is difficult to miss.
So the old Kiwi adage remains useful: forewarned is forearmed.