One of the biggest concerns that foreign investors have regarding doing business in China is how to protect their intellectual property while working in another country. Intellectual property protection continues to be targeted for reform.
Recent changes including the establishment of the State Administration for Market Regulation, which is responsible for governing China’s National Intellectual Property Administration provide greater intellectual property protections than in years past.
The most important intellectual property laws in China are discussed below.
If you would like more information on these laws, recent updates regarding intellectual property regulations, the regulatory structure, registration requirements or any other matter concerning your IP rights, Horizons can provide strategic consulting and legal assistance.
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China’s Laws on Patents
China’s National Intellectual Property Administration governs the People’s Republic of China Patent Law. Patents are integral to the success of many businesses as they provide a legal right to those who register them to protect their inventions, utility models and designs from being reproduced without their permission.
In order to qualify for protection, inventions and utility models must be novel, creative and of practical use. Designs that are distinctive and that are not in conflict with existing designs are also eligible for protection under the patent law.
China’s patent system is unique in that it provides patents on a first-to-file basis, even if the invention has been used in other countries and is protected by a patent elsewhere. Once the patent is granted, a business cannot exploit that patent without consent from the person or business that registered the patent.
China does not have a specific patent opposition procedure if a business wants to challenge the validity of a patent that has been granted. However, any business can file an invalidation application and submit evidence to the Patent Review Board to oppose the patent.
How to Register Patents for Inventions
China’s procedure to register patents for inventions is different than its procedure to register patents for utility models or designs.
The first step to register a patent for an invention is to complete and file the patent application. You will submit any relevant documents at the same time and pay the applicable filing fee.
China’s National Intellectual Property Administration will then review the application and conduct a preliminary examination within 18 months from the date the application was filed. It conducts substantive examination on the applicant’s request. If approved, it registers the patent and grants a standard patent for the invention.
The patent application process for inventions is usually between three and five years. This patent is valid for 20 years.
How to Register Patents for Utility Models or Designs
The process to register a patent for a utility model or design starts similarly with the payment of the fee and submission of the patent application and relevant documents.
China’s National Intellectual Property Administration conducts a preliminary examination. It then registers the patent and grants a standard patent. This process generally takes one year. The patent is valid for 10 years.
Additional Legal Requirements to Obtain a Patent in China
The patent application can be submitted on a paper application or electronically. Foreign businesses that do not have a regular residence or business site in China are required to appoint a local patent agency to act as its agent.
China’s Trademark Law
A trademark is a word, phrase, symbol or design that identifies and differentiates one source of goods from those of others. This mark helps your customers recognize your products.
In China, the State Administration for Industry and Commerce administers the People’s Republic of China Trademark Law. Having a registered trademark gives the registered owner the exclusive right to use the trademark.
In China, trademark rights accrue on a first-to-file basis. Foreign businesses must appoint a Chinese trademark agency for trademark registration.
However, this system has resulted in people and businesses registering trademarks for known foreign businesses and then blackmailing these companies. This has resulted in widespread litigation from conglomerate corporations like Apple, Tesla and New Balance.
How to Register a Trademark in China
The first step to register a trademark in China is to check whether it is already registered.
Then, you must submit your trademark application and accompanying documents to the State Administration for Industry and Commerce, which then conducts a preliminary and substantive examination within nine months of when the application was filed. It then publishes and registers the trademark.
It generally takes about 14 to 18 months to file and receive approval for a trademark in China. Anyone can file an opposition against the trademark within three months of its publication. A China trademark is valid for 10 years. Businesses can apply to renew them within 12 months before they are set to expire.
China Trade Secrets Law
The Anti-Unfair Competition Law defines trade secrets as any technical or business operation information that is not known to the public, has commercial value and which the owner has taken steps to protect. The State Administration for Industry and Commerce is responsible for administering the law. Additionally, the trade secret law protects negative value information, such as results from failed research data or business models. Foreign businesses can seek compensation if their trade secrets are infringed upon, but they must provide sufficient evidence that the defendant was responsible for obtaining and disclosing the trade secret. The law states that if a third party is aware of an infringement, it is considered an alleged party to the infringement.
China’s Copyright Law
The People’s Republic of China National Copyright of Administration and the Copyright Protection Center of China are responsible for administering China’s Copyright Law. This law protects literary, artistic and scientific works.
How to Register a Copyright
While there is an automatic copyright process, to obtain a copyright certificate in case litigation is necessary, the copyright can be registered by applying with a sample of the work. The applicable governmental agency conducts an examination and issues the certificate once approved.