IP protection for design businesses in China  

Illustration: Enni Koistinen

This article is part of #DESIGNIPR, an online guide to making your design business more profitable, more competitive and safer on the international markets with the support of IP rights (IPR). Written by legal adviser of Ornamo Jussi Ilvonen, the online guide gives an overview to markets and law in the EU, US, China and Japan. 

 

Overview  

The following focuses on the most important aspects of design companies’ and designers’ IPR protection measures in mainland China. In China, the intellectual property rights (IPR) system protecting e.g. designs, inventions and works of art, is similar in many parts compared to ours. Most same IPR’s are known there as well. There is a huge amount of IPR registrations in the country, especially by Chinese companies but also by foreign companies and entrepreneurs every year.

However, many differences and unique national features in the Chinese IPR system exist as well. For example, unregistered IP rights have weak position as a defense. However, to gain better protection, one is able to register copyrights in China, unlike in the EU and most other countries of the world. Furthermore, careful IPR related business planning before entering the market is always highly recommended – ideally before any public disclosures of designs, inventions or business ideas. This, as you may already have read from earlier parts of this IPR guide material, is a somewhat universal and crucial strategic issue to remember when planning IP intensive commercialization or other type of expansion to foreign markets. 

The registration authorities in China are Intellectual Property Administration (CNIPA, formerly SIPO) and the Copyright Protection Center of China (CPCC). They allow you to register your rights directly, but doing so one is required to use a local attorney or other agent, unless the applicant is domiciled or established in the country.  

Basically in most cases it is highly recommended to consider at least consulting an experienced agent for best IPR protection; for example, national applications must be made in Chinese and for trademarks the sub-classifications differ from those known in Europe. In Finland, as well, there are IPR expert offices with well-established contacts with local agents. Alternatively, the applicant can use WIPO’s international registration and application systems (”Madrid system” for trademarks, ”PCT system” for patents). For now, however, international registration of a design right by an international application (”Hague system”) is not in use in China. In the following paragraphs, we’ll cover the key features of most important forms of IPR for design businesses protection in China. 

  

Useful links for general information: 

 

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Copyright (in Finnish: tekijänoikeus) 

  • Protects, in principle, all forms of expression of creative work, which are original and reproducible, e.g. original texts, sculptures, paintings, videos, photographs, computer programs and databases.  
  • Protection is born automatically by creating an original work. Copyright is also registrable in China. It is recommended to always consider registration, and in any case, document the work steps associated with the work. This reduces risks in the event that allegations of infringement are made. Copyright registration is a relatively quick and inexpensive means of protection for especially artistic work. Registration is possible get retrospectively from the time the work or works were created.  
  • Long term of protection, but shorter than in Europe: valid until 50 years after the author’s year of death, or 50 years from the year of publication, if the original right holder is a company.  
  • For works of applied art, such as many forms of design, the term of protection is only 25 years (the provision only applies to foreigners). It is quite possible, however, to have an applied art design also receive copyright protection for a term of protection of 50 years, if it is considered original enough. 

 

Design patent (also known as design right, in Finnish: mallioikeus) 

  • Protects the appearance or decoration of products  
  • Design can be protected in a certain color. However, this is not usually recommended, as this narrows the scope of protection 
  • Novelty, individual character, and relation to a product is required for registration of a design patent in China. The authority does not examine the novelty of the model ex officio.  
  • Valid only for 10 years from the date of application (cf. eg EU, where maximum is 5 x 5 years). The maximum duration may possibly extended to 15 years in the future  
  • the design must not have been published before registration, ie. there is no 12-month “grace period” for registration in China, unlike eg. in the EU  
  • Two-dimensional patterns cannot be protected in China – unless it is part of the product (eg on the label or on the label in clothing)  
  • The three-dimensional object of protection is, as a general rule presented from six angles  
  • graphical user interfaces at least not at present may obtain design protection  
  • a written explanation of the design must be provided in the application – images are still crucial in China as well  
  • dashed lines, dotted lines, shading, etc. allowed in application images  
  • one application can contain up to 10 designs (cf. EU: no restriction) and must be either the same different product designs or product design protection as a group. Parts of the product can also be protected as stand-alone designs  — design rights do not protect parts of a product without a specific design patent application that indicates, that the object of protection is a part of the design. 
  • designs patent protection cannot be obtained without filing for registration (cf. EU Unregistered Community Design, UCD, which is in force without a registration for 3 years) 
  • The registration process normally takes about 6-12 months 
  • Price roughly about 1000-1500 euros per design patent 

 

 

Trademark 

  • Protect the trader’s goods and services  
  • Created by registration, valid only for selected product and/or service classes. Registration can be applied through either as 1) WIPO’s Madrid system, in which case a previous trademark application must be filed in another state (such as in Finland), or 2) nationally directly through CNIPA, using a local attorney. 
  • Use of the ® symbol in China is only allowed for trademarks which are registered in China 
  • Valid for 10 years at a time, starting from the date of registration, renewable indefinitely 
  • registration is subject to distinctiveness, ie easily distinguishable from others and not descriptive. 
  • The mark must not be functional (eg patentable) or against the law or good manners 
  • Significant difference eg to the EU: classification practices for goods and services differ from the EU, it is recommended to familiarize yourself with them carefully in advance.  
  • Prices from just under € 1,000 per brand, depending also on the number of service categories. The application is taking time to process usually about 12-18 months, i.e. clearly longer than e.g. in the USA 
  • Where possible, you should also plan localization of the trademark to the Chinese market, e.g., the Chinese version of the trademark. Here you should consult experienced and a Chinese-speaking professional. 

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Patent (also known as invention patent) 

  • Protects inventions as well as methods that are new, inventive and have industrial applicability 
  • Created by registration. Registration can be applied for 1) directly from CNIPA using a local agent, 2) by filing an international patent application with the PCT Authority (NBPR in Finland), or 3) by extending the national registration with an international patent (PCT) application to cover also China (PCT application must be done within 12 months from filing the national application). 
  • Valid for 20 years from the date of application, non-renewable
  • Price expensive compared to other IP rights, several thousand euros per patent. It takes an average of 3-5 years to get registered 

 

Utility model 

  • Form of protection of the invention, subject to novelty and inventive step, but under lighter conditions than with a patent
  • Term of protection 10 years from the date of application, non-renewable
  • Clearly cheaper than a patent.It takes about 12 months to get it registered. 

 

Business name (trade name, company name) 

  • Protects the company name (must also be in Chinese). Registration is sought from the SAMR (State Administration for Market Regulation) 
  • It is quite common for foreign companies to protect only their products or services and do not set up an enterprise in the country. Many also register a business name with the same name as a trademark, which may in some cases strengthen a company’s brand protection. 

 

Domain name 

  • .cn domains are managed by CNNIC (China Internet NetworkInformation Center) is obtained through a CNNIC-approved domain registrar  
  • costs some tens of euros / name / year

 

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Trade Secrets 

  • Trade secret legislation offers prote information that has economic value, is non-public, and is protected by the right holder with adequate measures 
  • With regard to the protection of trade secrets, it is very important to maintain practical confidentiality: as regards the terms of the contract confidentiality, information security and, for example, instructing staff on the management of business secrets 
  • Due to the violation is entitled to sue compensation, in more serious cases also a penalty. 

 

Protection against unfair competition 

  • In cases of imitation of another product or brand, it is also possible to invoke Chinese unfair competition law (AUCL), but the form of protection is more uncertain than, for example, a registered IP right, so its usefulness should always be assessed on a case-by-case basis with an legal expert with sufficient knowledge of the Chinese legal system. More information.

 

The role of agreements

  • Along IP rights, agreements are the main supporting instrument for using one’s IP commercially. Like elsewhere in the world, the designer should always license (or in some cases assign) the rights as narrowly as possible and as “slices”. 
  • Agreements can enhance IP protection and significantly reduce the risk of misunderstandings and liability: for example, division of responsibilities, limitations of liability, ownership of ancillary materials, confidentiality, contractual penalties, dispute settlement procedures between the parties (eg negotiation + arbitration), the place of dispute settlement and the law (eg “neutral” country) 
  • Common contract types for design commercialization: e.g. design agreement, license agreement, collaboration agreement, agency agreement, distribution agreement.  

 

Enforcement of IPR  

  • the IP rights can be defended in China by administrative proceedings (AIC), which can be clearly faster and easier than litigation  
  • e-commerce platforms (eg Alibaba) can submit takedown requests to remove pirated products platforms. Generally speaking, this is allowed if some form of national IPR protection is in force in China 
  • Digital IP management services are also being developed to facilitate monitoring and help with enforcement actions in online platforms (eg Red Points, Sentryc) 
  • Customs control can be one effective means of combating counterfeiting from China: China also has a customs control service for outgoing goods, cf. more specifically CAG (General Administration of Customs).

 

Earlier issues:

 

#DESIGNIPR is part of Ornamo’s national IPR project supported by the The Ministry of Education and Culture Finland.

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