IPR Protection in China for the Creative Industries

China’s rapidly expanding consumer market creates both opportunities and challenges for European businesses in creative industries. Ideas and designs are the lifeblood of creative businesses and infringement can be particularly costly and damaging. Because intellectual property (IP) that is not adequately protected can easily fall victim to infringement by potential Chinese clients or competitors, European businesses are sometimes reluctant to enter the China market. The China IPR SME Helpdesk shows us how to effectively use the Chinese system to protect your company’s IP and foster successful partnerships in China.

Copyright

As in Europe, copyright in China is automatically awarded upon the creation of a copyrightable work. These include: architectural or engineering drawings; works of fine art; applied art; literary works; music or sound recordings; dramatic or cinematic works; compilations; and software, to name just a few.

China also allows you to voluntarily register your copyright. Registration is presumptive evidence of ownership if you wish to enforce your copyright and greatly reduces the preparation of evidence for cases of infringement. Copyright registration in China is inexpensive, easy, and generally recommended. 

When creating works for others, or commissioning others to create works for you, make sure your contract clearly states who owns the copyright. In China, the commissioned party owns the copyright to the works unless the contract states otherwise.

In addition to using copyright as a form of protection, it is also equally important to make sure you do not infringe upon somebody else’s, such as when using their work. For example, this can happen if you download someone else’s photograph from the Internet without permission to use in your project proposal. It is important to obtain the permission of the copyright owner when using their work.

Design patents

A design patent protects the aesthetic features (shape, pattern, colour) of industrial products.  To protect a design, it must be registered as a design patent. Designs registered in a foreign country do not enjoy protection in China. For foreign designs to qualify for protection in the Chinese market, it cannot already exist and must be sufficiently distinguishable from other designs. Currently, it takes approximately nine months to a year to obtain a design patent in China, which gives you the exclusive right to use or allow others to use your design in China for 10 years. 

If you disclose your design anywhere in the world (in any way) before you apply for a patent in China, you will be ineligible for protection in China.

Trade Secrets

Under Chinese law, a trade secret is any non-public information of commercial value that is treated as confidential. Trade secrets include items such as undisclosed designs/sketches/concepts, customer/supplier/price lists, contractual terms, business operational methods, internal emails and negotiations. To protect their IP, many firms implement measures such as confidentiality agreements tied to disclosure, non-disclosure agreements with employees, the use of passwords, or marking documents as confidential.

Prevention is the key to protecting trade secrets. Although legal action is available, it is often difficult and not always feasible to prevent the dissemination of sensitive information once it has been disclosed. It is good practice to periodically catalogue what potentially valuable trade secrets you may have so that proper precautions can be taken.

Most cases involving the theft of trade secrets involve former employees or potential clients. It is important to require all employees to sign an employment agreement with non-disclosure and, if necessary, non-compete provisions – where the employee must agree to not set up a competing business once s/he leaves. It is also wise to limit access to valuable information to only employees with a need to know, and to conduct exit interviews.

It is also good practice to insist that third parties, including potential clients or suppliers, sign a confidentiality agreement before you start negotiations or transfer documents. Sometimes, however, a potential client may consider such a request ‘hostile’. It is recommended that companies insist on a non-disclosure agreement (NDA), otherwise—according to Chinese law—your documents will qualify as non-trade secrets.

Takeaway message

Though seemingly daunting, with a few simple preventative steps and appropriate registration of rights, your creative work can be adequately protected in China. Remember these key points:

• Use preventative measures: Don’t wait to take action. Most of the steps described previously should be taken before entering the Chinese market.
• Use the system: Register your IP in China. China has a robust, effective IP enforcement system. Registered IP should include copyrights and design patents, as well as others such as invention patents and trademarks.
• Use contracts: Protect your business from the inside out. Include contracts and agreements with all involved parties, including employees, partners and clients, to properly protect your trade secrets.

The China IPR SME Helpdesk supports small and medium-sized enterprises (SMEs) from European Union (EU) Member States to protect and enforce their intellectual property rights (IPR) in or relating to China, Hong Kong, Macao and Taiwan, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (question@china-iprhelpdesk.eu) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.

The China IPR SME Helpdesk is an initiative by the European Union.

To learn more about the China IPR SME Helpdesk and any aspect of intellectual property rights in China, please visit our online portal at http://www.ipr-hub.eu/.