A few weeks ago, I met with Elisabeth Bourgeois, who is based in China and specializes in brand protection & anti-counterfeiting. She is the managing director of Bourgeois & Yang and is a member of the European Union Chamber of Commerce in China.
Elisabeth accepted to answer a few questions about intellectual property risks for importers:
Q: Let’s say a European or American company needs to produce in China. They have their own brand, and they develop their own products. What are the main risks they run, in terms of intellectual property?
Q: Many companies help a Chinese supplier to develop customized products. And they don’t want that supplier to sell these products to other buyers. What is the easiest way to check if a supplier respects this commitment?
Q: Sometimes, one of your employees infiltrates a company to gather information and to collect proofs. Maybe you can tell us about one example where you did this successfully?
Here is an example of a company that was victim of a violated patent. Their products were flooding the European market. Their goal was to identify the buyers in Europe rather than raiding factories in China.
Our Chinese investigator infiltrated the targeted factory. There, he gathered information about the production and the distribution channels.
He established a close relationship with the workers close to the boss to see which leverage could be used with the manager in charge of international export.
Then a foreign investigator was sent to offer to pay that manager for any information.
After we got a list of foreign buyers importing the patented products, we established that one of them used Paraguay to get raw materials there without suspicion, assembled all the pieces in China, and then dispatched finished products to the rest of the world very easily.
With the Customs’ help, we were able to follow the supply chain channels and gather enough proof and evidence to catch the infringer.
In the end, the victim was able to stop the production in China and gain compensation.
Q: In case your company collects proofs of a supplier’s wrongdoing, what type of resolution do you advise to your clients? Is litigation in China a good option?
Civil procedures, arbitration and litigation are the best options. They are quicker and cheaper than administrative and judicial solutions, which require much more involvement from the authorities.
Nevertheless, each situation should be evaluated according to the danger associated with the finished products and the amount of the prejudice.