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How to protect your IPR while doing business in China

by Sophie Mao

One of my clients asked me a question, which I believe is a common concern:“How can we protect our IPR effectively in China?”

The following was my answer:

1. First of all, register your IPR in China, ASAP. All IP laws & regulations in China are based on the protection for legitimate registered IPR. Furthermore, for IP registration, China operates a “first-to-file” system, which means, whoever first applies for IPR will be granted the ownership. Thus, if you want to protect your IP in China, you should register it in China.

2. Sign an NDA or similar contract with your partner. No matter you want to sell, buy, or manufacture in China, make sure you sign a Non-Disclosure Agreement (NDA) or a contract with NDA clauses with your partners, who are probably your distributors, suppliers or local staff.  In the NDA, you may specify that a penalty will be payable once either party breaches it, no matter whether any actual damage is made or not. Nevertheless, it is vital to find a good partner, worst NDA +best partner is still better than best NDA + worst partner. Due diligence and IP audit are necessary when you choose your partner.

3. Register your IP with China customs. Though an NDA may work with a partner, you can not stop any third party by signing an NDA with them. However, according to regulations of the People’s Republic of China on Customs Protection of Intellectual Property Rights, you may register your IP with customs to stop the infringement of goods when the goods are shipped out of China.

4. Finally, but not less importantly, you may resort to the following procedures to stop infringement: civil litigation, criminal prosecution and administrative action. Different procedures have different effect. You had better consult your local lawyer before you take any of these procedures.

Sophie Mao is the founder & Directing Partner of Chibridge Law Firm, which offers advice on foreign direct investment and sourcing in China. She writes for overseas investors and buyers at Chibridge Law Blog, and lives full time in Guangzhou. You can contact her at This email address is being protected from spambots. You need JavaScript enabled to view it..

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