We recently came across a new article from the China Law Blog that seems particularly relevant for those who are doing business in China and/or using Chinese distributors and we wanted to share their great insights into the matter as we have blogged about this topic several times. They provide a great explanation behind the decision to sign a licensing agreement with Chinese distributors: they could “steal” it, or tarnish your reputation without your knowledge or approval. For example:
“If you are going to use a distributor of your product in China, you should have a contract with your China distributer, that, at the very minimum, protects you from your distributer destroying your reputation in China (or even possibly subjecting you to liability) by providing a terrible product or terrible service and makes cleat that you own your name and logo (and whatever IP is important to you) and are merely licensing it to your distributer.”
There have been cases were people have registered trademarks of different companies so they can use the trademark in China (lawfully) without showing any original proof of ownership because the law is basically “first come, first served”. The best ways to cover your assets are introduced in the article.
“There is one easy solution to prevent your Chinese manufacturer or distributer from “taking” your trademark for China. Register it yourself in China and do not allow anyone to use it without a properly registered license to do so.”
With this China Law Blog advice, these steps can stop the headaches and heartaches of not covering all your bases before they happen, but sometimes you’re not that lucky. So here’s some more advice: There’s more ways to protect your intellectual property in China, like using at least two different factories to product your goods without telling them who each other are because then they cannot completely copy your product. Produce a strong contract in Chinese that has consequences for behaviors, so if they violate it you can take them to court. Lastly look at different sites like alibaba.com to see if your product is there, so you can take quick action to resolve the problem and have full protection for your product again.
To see the full China Law Blog article, click here.