I just got back from a talk given by Mark Cohen, an American intellectual property lawyer currently serving as U.S. Patent and Trademark Office attaché in the Beijing embassy. Very, very enlightening.
This guy literally wrote the book on Chinese IP law. One of his PowerPoint slides was a picture of the book from its side. The reason he put this on a slide: he was talking to an American businessman on a transpacific flight, and mentioned the book in conversation. The businessman said it must be one of the shortest books ever. It’s actually about 500 pages… as thick as many of the casebooks we get in American law schools.
Honestly, if I were sitting next to Mr. Cohen, I would have had the same reply. The impression most people get of intellectual property law in China is: “what intellectual property law in China?” What Cohen had to say was a paradigm shift for me: the problem is really that there’s too much IP law in China!
Say what? If there’s too much IP law, then why does China produce two-thirds of the world’s supply of counterfeit goods? Why do many Western companies have to use different trademarks in China because they discover a Chinese company has “squatted” on their trademark? How do so many Chinese components of joint ventures end up running away with trade secrets?
As it turns out, China has volumes of copyright, patent, trademark, and trade secret law. China even has some forms of intellectual property you won’t find in the States (for instance, in China, you can protect trade secrets before concluding a contract; generally not so in the States).
To top it all off, China has a slew of specialized IP enforcement agencies: effectively, they have a copyright police, a patent police, a trademark police, and so on. These agencies have made some pretty impressive busts (we saw a submarine seized while carrying bootleg DVDs from Hong Kong to Macau).
So why is piracy still rampant? The system is too complicated. There are too many laws and many of the laws are so recent that people have difficulty knowing how to put them together. Foreigners in particular often have no clue what they’re doing. They don’t realize that Chinese trademarks are given to the first to file; this means that if they haven’t already registered their trademark in Beijing, someone else is probably squatting on it. They don’t realize that they can obtain trade secret protection with little more than a rubber stamp that says “SECRET” in Chinese. They often don’t know how to prosecute infringement… and even if they do, they’re likely to have messed up in getting their rights under Chinese law, rendering the prosecution impossible!
It was quite a talk, and the moral was clear… get yourself a skilled lawyer (or two, or ten) in Beijing or Shanghai before you move into the Chinese market, and don’t ignore your rights just because you don’t think the rights exist. China has the law in place: much more than it needs. The issue is using the law effectively.