Learn how to monitor your intellectual property rights in China
Learn how to monitor your intellectual property rights in China! Build a mechanism to monitor your intellectual property in China.
In an earlier blog post “Trade War Strategies: Preventing your suppliers from violating your patents” we covered how to set up multiple layers of patent protection with the focus on the first layer- registering your Intellectual Property in China.
Today, let’s review three more essential layers of protection:
Contracts, Monitoring & Enforcement
Contracts define the Intellectual Property Rights:
In addition to registering your patent in China, it also helps to structure bilingual NNN (Non-Disclosure Non-Usage Non-Compete) terms into your contract. The contract should also state penalty clauses in the event a break of contract is proven. The penalty clause will make it easy for a Chinese court to rule in your favor and award damages.
Much more information on the subject of China contracts to come in an upcoming blog post.
Monitoring the Intellectual Property Rights in China:
After registering your patent and implementing a good contract, the final touch is to build a mechanism to monitor your intellectual property in China.
On behalf of clients, at periodic times during the year, AsiaBridge Law’s multilingual investigators will do the following (and more):
- look for infringement at the local and global level (online/ offline marketplaces & trade shows)
- carefully review the websites and online profiles of the target entity
- discreetly contact the subject companies
- monitor the patent office for the registration of competing patents
Click here to learn how to hire ABL and download the rate sheet for services related to the Monitoring of IPR & Contract Terms. But if you prefer to look into ways to monitor your intellectual property rights yourself, here are some practice tips, tools and strategies:
Question: How can I do some basic monitoring of my supplier’s factory to ensure they are not violating my exclusivity agreements and selling my product to other buyers?”
- If there are tooling/molds which are to be used exclusively for your production, be sure to keep an eye on the following:
- Where are the tools?
If they are not stored in the right place at the right time, they may be in use at another factory running your parts for other buyers!
For your reference, visit this page at our sister company- PassageMaker, if you want to see some ways in which buyers were abused and how to protect your tooling/molds.
- How are the wear patterns on the molds?
For example, if you ordered 10,000 units but the tooling shows wear marks indicated a much larger production run…that’s a red flag your product is being sold out the back door.
- Where are the tools?
- Keep close watch the supplier’s sample room and check the company brochures to see if the product you have under the non-disclosure, non-compete agreement is being show for sale to other buyers.
Pro Tip: Don’t forget to check the Chinese language website and brochures. The vast majority of sellers assume the English-speaking client will never visit their Chinese language website. These are the places where they show off “your products” to other trading companies in hopes of getting some back-door orders. For example, you place an order for 10,000 units. They run 12,000 and sell the 2,000 out the back door!
- It’s also a good idea to visit the warehouse and see which products are being shipped to where. Often the brand and buyer are listed right on the master cartoon. If we have a list of your competitors, you can cross reference those names when you visit the warehouse if you do it in a discreet fashion.
- Don’t forget to walk the trade shows where your supplier exhibits to check and see if your product is being shown to other buyers without your consent.
- Even if you are overseas, you can still monitor your Chinese supplier from a distance in the following ways:
- Have a friend contact the seller pretending to be interested in the product you have under exclusivity with the seller. If the seller is willing to take an order, that’s a big no-no.
- Visit the seller’s listings on GlobalSources.com and Alibaba.com to see if they are showing your product.
- TaoBao.com is by far the biggest channel used by factories or factory staff to sell products out the backdoor. Check in periodically to see if your product is for sale and who is selling it!
- Have a friend contact the seller pretending to be interested in the product you have under exclusivity with the seller. If the seller is willing to take an order, that’s a big no-no.
Additional Resources:
- More whitepapers & video tutorials on related subjects can be found https://www.asiabridgelaw.com/resources/
- 10 short videos covering 10 Common Mistakes when conducting business in China.
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ABL Blog: Sr. Editor and Primary Content Creator: Michael J. Bellamy
Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses. Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.
A featured presenter on China issues at seminars, trade shows and corporate events across the globe.
Learn more about Mike and AsiaBridge Law at
https://www.asiabridgelaw.com/business-advisory-services/
Mike is the author of “The Essential Reference Guide to China Sourcing”
(available on Amazon).