What To Do When You Find Your IP being Knocked-off on Alibaba?
Help! My product is being knocked off in China.
The lawyers in our network receive this kind of request on an almost daily basis:
I am the GM of a US based brand of XYZ products and we have a supplier in China. Our products have US patents and TMs in USA. I am finding Chinese copycats selling the exact same design, even using my brand and logo on Alibaba. Can I engage your lawyers to remove listings from Alibaba?
Pitfalls and Best Practices for getting copycats shut down on Alibaba in specific and in China in general
In theory, you don’t have to be a lawyer to contact Alibaba and report the knockoff. If you show Alibaba, you are the legitimate owner of the IP, they may take action without the need to take legal action.
BUT, in reality, Alibaba earns money from the sell side, not the buy-side. So, if that knock-off artist is paying Alibaba listing fees, you can assume Alibaba is going to at least ask the sell-side for their side of the story, before even considering removing them from the platform. That can actually make the situation much worse. For example, if the knock-off artist sees that the US company is getting serious about IP, but doesn’t yet have the IP registered in China, then the Chinese company may quickly register that IP in China under their name. Suddenly the US company finds themselves with an uphill battle on their hands
China is “first to register” rather than “first to market” and while it may take months to complete the registration process, the “first person to apply to Beijing” essentially controls the IP in China. It’s kind of like the “patent pending” that we are so familiar with in USA.
So, Alibaba could reach out to the unauthorized seller on Monday to ask if they own the IP.
Seller could engage an IP lawyer on Tuesday to do some research and confirm that the IP is not registered by the US company in China.
On Wednesday the lawyer could move to register the IP in the seller’s name and on Thursday show Alibaba that they have started the registration process.
At the very least, even if they haven’t completed the registration process, it only takes them a few days to easily make the case to Alibaba that the IP is contested. If it’s not black and white, you can expect Alibaba to lean in the favor of the Chinese entity.
Register your IP in China. It’s easier than you think!
Since registering IP is fast and affordable, the US buyer should move quickly to cover their bases in China by engaging a legitimate, well-seasoned IP lawyer in China. At that point, things start to look a lot better for the US company. Non-Chinese entities have the right to own IP in China. So, it is not like you have to be Chinese or even be in China, to own IP in China. Furthermore, US companies are likely to get a fair shake in a Chinese court (and even with an Alibaba help desk peon) when the US company can show proof of IP ownership in China with PRC government issued paperwork to back it up.
The US company may also want to explore working with US customs to seize counterfeit goods at the ports in the US. This can hit the knock off artist where it hurts- in the pocket book. But there are a number of dangers to seizing a shipment in the US without first registering the IP in China.
As mentioned above, if the seller gets wind of your efforts to leverage IP, they may race to Beijing and snap up IP rights in China before you do. That prevents you from hitting them at the production base. Even if you stop them from importing in the US, if you can’t stop production in China, then they will continue to sell the counterfeits in other countries and perhaps even into the US via gray channels.
Suggested course of action:
- Get your IP registered in China right now. Pray they haven’t beat you to it!
- Quietly collect as much information as you can about the offending party. It may come in handy down the road.
3. Once the IP has been registered or in process of being registered, talk to your Chinese lawyer about issuing Cease & Desist letters or exploring lawsuits to claim damages. Don’t bother sending demands from a US lawyer. It will only show the seller you don’t know how to get things done in China. They will ignore it. Have the letter issued in Chinese language under signature of a China registered lawyer. It will save you money AND be more effective.
Is there a 1 stop shop to register IP globally?
Some of you may be saying “but my lawyer back home told me I had global coverage for my IP when they registered under WIPO”. Registrations under the World Intellectual Patent Office sounds great in theory and may cover you in certain 3rd party countries. But China is a different beast. This blog explains in detail.
Your Chinese supplier may be the source of the knock-offs!
On a side note, you mentioned that you have a supplier in China. Are you sure this supplier or a cousin of the supplier is not the source of the knock-offs? You would not believe how many suppliers in China run “back door” production runs. Take a look at the video tutorials found at AsiabridgeLaw Resources to learn how to register, monitor and enforce IP rights in China
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).