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Protect your intellectual property in China!

November 2010 - Corporate & Commercial. Legal Developments by Wikborg Rein.

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Recently, several containers of goods to be exported by a Norwegian company doing business in China were confiscated in a Chinese port by Chinese customs authorities.

Investigating the matter, we discovered that the Norwegian company’s trademark surprisingly belonged to the company’s Chinese agent. Many years ago, he had registered this distinct Norwegian name as his personal trademark in China. Now, following a disagreement with the Norwegian company, the agent applied to Chinese customs authorities for confiscation of the goods.

The customs authorities, whose duties include enforcement and investigation of intellectual property rights ("IPR"), checked whether the applicant was, in fact, the owner of the trademark in China.

After confirming that the agent was the registered trademark owner, the authorities checked whether the registered trademark matched the logos on the goods that were to be exported. It did.

The customs authorities confiscated the containers and declared the Norwegian company to be in violation of Chinese IPR laws.

A shocking number of these kinds of incidences have occurred in China over the past several years, not just involving trademarks, but also patents and well-known corporate logos. Chinese agents and business partners of naive Westerners have made good business from registering foreign IPR as their own property. Westerners have paid large amounts of money to buy back their own trademarks, patents or corporate logos. Many Western companies have also been fined heavily by Chinese authorities for violating Chinese IPR laws. Paying these fines is often less costly than spending months or years in a Chinese court, with an uncertain outcome.

The lesson is simple: protect your IPR in China! It does not matter if your trademarks, service marks, trade dress, logos or patents are registered elsewhere. If you have not registered your IPR rights in China, your property is unprotected and you may just discover that your IPR belongs to someone else. Worse, you may be in violation of Chinese laws.

The good news: the Chinese IPR registration system is modernizing and becoming more efficient. Registration is easy and the costs are trifling compared to the grave consequences of having your IPR stolen.

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