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IPR and China – Putting Czech SMEs ahead of the game Presented by Helpdesk Experts: Simon Cheetham Jannik Skou. The Helpdesk Initiative.
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IPR and China – Putting Czech SMEs ahead of the game Presented by Helpdesk Experts: Simon Cheetham Jannik Skou
The Helpdesk Initiative • European business is 99% SMEs, about 2/3 of employment & about 57-58% of value added (a bit like ratio of Chinese origin goods to all counterfeit seizures….) • Definition of SMEs isn't only 'micro-enterprises' (under 10 people) but extends up to 250 employees, so covers more of economy than you might think • SMEs tend to assume that IPR is: costly, technical, 'too complicated' and 'not for me' leading them to do even less than they could do otherwise • SMEs have fewer resources so need help
Helpdesk services Office Network Business tools Online Portal Research/Publication Training/Workshop IP Expert Network
Online Portal – A business tool for you to use Upcoming events listed Ask our IP experts a question Business tools easily accessible Navigation bar for ease of use Helpdesk news Coming soon! E-learning module: Trademark protection in China
Workshop Agenda • Getting ahead through innovation - • why EU SMEs Need To Consider IPR • What Do You Need to Protect? • How Can Businesses Best be Protected: • - Know before you go • - While doing business with China
Why Do Companies Need To Consider IPR? EU - China trade in 2008 = US$360 billion EU China = US$113 billion EU China = US$247 billion Source: Ministry of Commerce for China
Why Do Companies Need To Consider IPR? To protect products & ideas To protect & harness brands & reputation To justify research & development costs To take ownership of new rights To prevent other companies from using inventions & designs To keep competitors at a distance To create a market for future development To create a strong defence in case of conflicts / infringement To record attract investors To enable licensing- & co-operation agreements; To arrive at the best decisions for registering rights internationally.
What Do You Need To Protect? Brand names Inventions Technology Artistic works Literary works Domain names Designs Software Systems & procedures Know how Trade secrets
How Can Businesses Best Be Protected? Issues before you start doing business with China, you should consider: Are your rights registered? What countries are covered? What about Chinese versions? Who are you dealing with? How do you know if they are reliable?
How Can Businesses Best Be Protected? China is a “first-to-file” country when it comes to IPR registrations. - Key issue for many EU Businesses – case study China, Hong Kong and Taiwan use separate legal systems, i.e. there is a need to file in both. For trademarks: register broadly in many classes, Chinese versions of your TM should be registered
How Can Businesses Best Be Protected? While you are there: Contracts/NDAs/confidentiality – notarise agreements Are they likely to develop your product – what about IPR? Does your supplier/manufacturer have control of brand labels/moulds/production equipment/proprietary information? Assess risks – who else does the supplier work for? Is there a conflict of interest?
How Can Businesses Best Be Protected? Precautions against loss of technology & IPR Modular sourcing Protect parts against copying Integrate in-house if possible Don’t openly send tech drawings Keep data in Europe Do your homework: Integrate employees
How Can Businesses Best Be Protected? Consider how you want the relationship to work and what controls you need to put in place to secure your rights Conditions should be put into a written agreement and accurately translated and understood by all parties Take steps to verify that your potential business partner are genuine and share the same goals as you If possible, consider keeping your most valuable IP a ‘trade secret’, for example, the formula for Coca-cola. Business partners and IPR protection
How Can Businesses Best Be Protected? Consider what samples and promotional materials you provide to potential partners Ensure that your property is protected after an agreement has ended e.g. include the return of moulds within the written agreement Clearly state what Intellectual Property Rights are owned by whom in respect any items you supplied Use confidentiality, non-competition and non-disclosure agreements Specifically state that your supplier may NOT use a sub-supplier without your permission Business partners and IPR protection
How Can Businesses Best Be Protected? Register IPR - Use a layered defence Domain names – a growing issue in China: list of officially recommended registrars on the CNNIC website: http://www.cnnic.net.cn/en/index/0L/index.htm Keep trade secrets ‘secret’ Contracts / sourcing NDA / Confidentiality agreements - notarize Check & ensure IP materials used correctly Control labels / packaging / marketing material etc
Detection Police your market e.g. Check suppliers Audit manufacturers Internet sweeps Feedback from customers/sales staff Market surveys Customs (China & EU) Trade Fairs Check exhibitor contract Research other exhibitors Prepare an IP pack Determine strategy
Enforcement Administrative action: There are over 30 different administrative authorities. No-one coordinates nor investigates. You need to obtain evidence and convince the authorities, who can: carry out unannounced raids seize, impound and destroy fake goods issue punishment decisions impose fines (not large) revoke business licenses Criminal action – usually escalated via Admin Authorities SAIC building - Beijing
Enforcement - Raids Examples of raids – car parts, garments, shoes
Enforcement - Raids Exterior of Military area – PLA production base Shoe boxes printed with sale price in £ & Euros Factory making infringing footballs
Enforcement Civil action – plenty of resources: - 120,000+ lawyers, 10,000+ law offices, 350,000 court staff To guide you through the maze: Trade associations / Chambers of Commerce etc China IPR SME Helpdesk Complaint Centers
Summary & Questions You don’t have to be an expert –there are plenty out there Register rights – if you don’t own it you can’t protect it You need to be the first to file IPR in China Use good contracts Prevention better than cure Be proactive
Online Protection of IPR in China Jannik Skou Thomsen Trampedach GmbH
Online Protection of IPR in China • Content • Introduction • Overview: The Internet and China • Why is internet domain name protection in China important? • How can European SMEs protect their IP assets online and mitigate related risks? • The domain name registration process in China • How can one recover an infringing .cn domain name?
Introduction Introductory Project Meeting EU-China Chamber of Commerce, Beijing 12 March 2009
Online IPR Strategy Operations Domain name policy, work flows, monitor, enforce etc. IP Strategy Domain Strategy IPR Protection Marketing IT Visibility Infrastructure and security Domains as IP assets
1. The Internet in China is booming • Almost 300 million netizens • Surpassing the US as largest Internet Nation (VIDEO CCTV 2008) • Growth of 41.9 % Source; CNNIC.cn
Internet is going mobile – especially in China • 650 Million mobile users* • 40 % of netizens accessing Internet via Mobile phones ** • China Telecom to purchase 50 million mobile phones this year, 20 million 3G mobile phones.* • China´s ”go West – programme” likely to accelerate growth in number of mobile netizens in China • Why important for European SMEs? • Direct navigation > increase importance of domain names • Impatient : Guess for the name of the website Sources: *ChinaDaily.com.cn and **CNNIC.cn
Rapid Growth in Domain Names • The world’s largest country code; .cn • More than 14 million .cn registrations • .cn dominating domain registrations in China (80% .cn)
Domain Names in China not just another TLD • Romain Characters .cn • Simplified Chinese .cn • Traditional Chinese .cn • Chinese Characters ”dot” Chinese Characters • Key Words • Wireless Keywords • 34 Regional suffixes (bj.cn, sh.cn etc.) • .cn / com.cn/ net.cn / org.cn • domain.cn • 清华大学.cn • 北京大学.中国 • 手机 • (‘mobile phone’ in Chinese)
The .cn Domain name regulations have four important characteristics • It is based on a ‘first come, first served’ principle • Instant registrations • Low costs • Low demands for documentation • as long as the domain name is available, anybody can register the domain.
Future Domain Name Developments already end of 2009 • New gTLDs - .car, .shop, .brand, .berlin • New fast track IDNs (internationalized Domain Names) – local characters ”dot” local characters • Chinese government specifies four Chinese character domain names as the first candidates which are ".Zhongguo (means China)", ".Gongsi (means company)", ".Wangluo (means Internet) and ".CN", which is the original domain name in China's domain name system. * • VIDEO chinese characters in domain suffixes • *Source: http://english.ipr.gov.cn/ipr/en (China Daily)
Online Protection of IPR in China • Content • Introduction • Overview: The Internet and China • Why is internet domain name protection in China important? • How can European SMEs protect their IP assets online and mitigate related risks? • The domain name registration process in China • How can one recover an infringing .cn domain name?
Why is internet domain name protection importantin China? • I have a .com domain name or a .cz – that should be sufficiant... • You heard that Chinese Chery will buy Volvo? • Let us find them:
Oups, I forgot the ”.” after www Chinese Car Manufacturer...easy to find?
Where is the ENGLISH button? Chinese use and search for .cn... And Expect Chinese Content! Maybe just chery.cn ?
