How To Enforce Your Rights

Mike’s Answer: 

Thanks for your email. There are three ways to enforce your rights when the supplier is knocking you off. 

a) Demand Letter

God forbid, you found out that the supplier is knocking you off, you’ll be surprised to learn that demand letters actually work better in China than they do back home, in the US for example.  Sometimes you send a demand letter in America, and it’s just ignored. 

In China, that actually works. I’m not sure what are the reasons; maybe it’s because the seller is just surprised to learn that you actually know about it.  So, a demand letter, if well crafted, meaning it’s bilingual. It needs to be in Chinese and it’s from a reputable law firm that scares the seller a little bit, they might come clean.  Perhaps they’ll apologize, there’s going to be a little bit of loss of face on their part.  Whether you want to continue doing business with them or not is another discussion, but a demand letter in China does work. 

Click this link https://www.asiabridgelaw.com/2021/10/what-is-a-demand-letter-and-how-is-it-used-in-china-to-solve-disputes/ to learn more about demand letter and how it is used in China to solve disputes 

b) Contract

If you have a contract in place, that has terms about these intellectual property rights, who owns these rights, and it’s violated, know that if it does come to litigation, even a foreign company in China can win against the Chinese party. 

Learn a little bit more about contract customization https://www.asiabridgelaw.com/2020/04/formal-with-your-china-supplier-contracts/, what are the costs involved and how does it work.

c) Litigation

Litigation works in China.  The best part about going to court in China is, just like labor cost, the cost of a lawyer is also reduced. So instead of spending hundreds of thousands of dollars to fight a court case in China, it might be tens of thousands of dollars. It’s like you’re rich, and you can hire the dream team, almost! I’m exaggerating a little bit, but these court cases are not as painful as it is back home.

I’m happy to tell you in the vast majority of court cases that I’ve been involved in, the foreign party has won, mainly because we had clear contracts, and we used investigators, rather than the police. We used investigators first to collect all this information to catalog the infringement.  Then we went to the police and showed them. So, we made it really easy for the police to say “This is a clear violation of the contract.  It’s clear counterfeiting.” I’m talking about the Chinese police.

Learn more about hiring an English lawyer to file a case in PRC https://www.asiabridgelaw.com/2021/03/china-court-cases-qa-with-an-english-speaking-chinese-lawyer/

Thanks again for your email.  Hope the ideas above are useful to your planning.  Glad to help and make introductions if you like.