Intellectual Property Protection in China
Innovation in China, that has never been that stronger than today, is traditionally related to counterfeit for European companies. This is not about tangible goods (furniture, machines, and factories) but creations, ideas, and concepts, and it raises the question of the importance of the Intellectual Property Protection in China.
The Young Start-up in China
For a start-up, the question would be to know whether this intellectual property could eventually be copied and if it is necessary to protect it. This crucial question for a young startup in China is most of the time, not enough considered by young entrepreneurs. Indeed, before initiating the necessary procedures, they want to make sure that their concept and product are adapted to the market and that it will answer to a demand. If this way of apprehending a new launch is commendable, it can get very risky in China. When the time comes, if the confrontation with the market was successful, the counterfeits were already made and your idea will not be able to be protected anymore. In a case of a conflict, the judicial procedure is very complicated. “To prove to Chinese authorities that the intellectual property is well protected by international commitment of the People Republic of China would be to explain again the whole operation system to the civil service, confronted to the suspected counterfeiter that will use the exact same arguments” explained professor Stéphane Grand, expert accounting in China. In other words, once the leak of your IP is identified, an appeal remains completely useless.
How to maintain your lead onto your competitors?
There are 2 solutions, strategical and administrative. “Technically, the best way to protect innovation in China is to always be in an offensive position, by improving your technology, by selling better and more in order to become the leader on the market, and by always giving to your customers the last version of your product”, told Professor Stéphane Grand.
According to the American government, China was the stage of 80% of stealing of intellectual property declared by American companies in 2013. The impacts of counterfeit in china are represented in every field. Counterfeits are to be found in luxury fashion, in the automobile sector, in toys, pharmaceutical, or hardware. “If your strategy can allow you to always maintain your lead onto your competitors, that does not mean that you can forget to have at least a minimum administrative protection”, added Stephane Grand. “It is, of course, to register your brands, patents, as you would do in the West. The best approach is having your intellectual property registered by the local authorities in China”.
But there are many means holding up the protection of intellectual property for young start-ups in china. “There are many obstacles; the legislation on technology transfer and the way Chinese civil service in charge of the registration of intellectual property handles cases do not help to protect innovation”.
The best way for a French startup to be protected in china is thus to call on experienced partners. “With a little experience and help, it is possible to establish in this market with an innovative concept without having your intellectual property stolen”, said Professor Grand.
“The sensitive aspect is about local partners. It is recommended to innovative entrepreneurs to trust less international agreements, the skills of the members of some organizations or even the membership to some conventions about intellectual property protection”. Innovation in China, that has never been that stronger than today, is traditionally related to counterfeit for European companies. This is not about tangible goods (furniture, machines, and factories) but creations, ideas, and concepts, and it raises the question of the protection of intellectual property in China.
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