By Dan Harris
My firm’s international IP lawyers get the saddest emails.
With the fraying of relations between China and the West, Chinese companies are becoming increasingly concerned about their ability to maintain long-term relationships with foreign companies. This heightened concern has manifested itself over the last 3-5 months in an increasing incidence of Chinese companies “grabbing” IP from the foreign companies.
And boy are our China IP lawyers hearing about it. Oftentimes in panicked emails.
The below is an amalgamation of three emails we received of late, modified to make them more general and to make sure not to reveal the senders:
I came across your blog while trying to secure a copyright here in China for my [artistic piece].
I’m an artist in-residence here in _________, all as part of a program between [my country] and China.
Morally and legally I own the rights to all that I have created during the residency, however I suspected my host was making moves to take ownership of the IP to my material. I challenged them and indeed they stated they believe ownership is theirs. This terrifying thing is that as I rely on my work to live. It is what I know and what I do. The materials they claim to own represent years of my own processes and months of my own hard work. Losing the rights to them would be very difficult for me to recover from.
I have been trying to access China’s online copyright registration page so that I can register my works as copyrights in China but my lack of Chinese prevents me from doing so. Any quick advice you can give me would be greatly appreciated. I leave China soon and I would really like to have all of this resolved before I leave.
Our responses to all three were roughly the same and were was mostly as follows:
I do not see how anyone other than a China IP lawyer fluent in Chinese could secure a China copyright on their own. But my bigger concern is not so much with your securing the copyright, but whether you actually are entitled to a copyright. I fear there is some sort of agreement/contract (probably in perfect Chinese and horrible English that you never understood or took seriously) between you and your host saying that in return for hosting you your host gets all or at least some share in the IP rights to whatever you create. I also fear your host has already registered a China copyright in your works. If either of these things are true, there may not be much benefit in your seeking to register a copyright. You may have a good argument for the copyright to the works belonging to you because you created them, but if there is a contract or a registration saying otherwise, you may need to undertake a costly legal fight to get that ownership.
These recent artist problems are the tip of the iceberg in terms of what has been happening in China lately, but they nicely illustrate a core point for anyone doing any sort of business in China: get IP ownership clear and in writing with your Chinese counter-party(ies) before your IP vanishes. For example go here for what to do with product development agreements.
This core point holds true not just for China but for anywhere, and especially for any country with weak IP protections. I mention this because in addition to our seeing more companies losing their IP to Chinese companies we are seeing more companies lose their IP to companies in other countries they were scoping out as China replacements. If you are looking to move your business from China to some other emerging market country, you should not reveal your trade secrets to anyone in those new countries (be it Vietnam, Cambodia, Indonesia, Malaysia, Thailand, Turkey, etc.) without first making sure you have the right protections in place to protect your IP. It usually makes sense to start with a country-specific NNN Agreement and trademark registrations then move on from that.
It is a truism to say that much is in flux with China these days. It is another truism to say that flux increases risk. But both of these things are true and those who do not act accordingly are going to suffer.
Dan Harris is founder of the Harris Bricken law firm, a boutique international law firm focusing on small and medium sized businesses that operate internationally. China is the fastest growing area for the firm. Dan writes ChinaLawBlog.com as a source of China legal and business information.