Your worst fear has come true: your brilliant crowdfunded idea, the one that you spent countless nights drawing up, or that you borrowed money for, is making a splash in the markets. However, someone else’s product name is splattered across it–and someone else is making all the profit.
Intellectual property theft is a lamentable reality for many inventors; just ask Yekutiel Sherman, whose idea for a smartphone case with a built-in selfie-stick was listed on Kickstarter one week, and the next, was being sold by various vendors throughout China for much less than half of the intended retail price.
In today’s global economy where speed is everything, it is essential to take steps to protect your intellectual property (IP) so that your brilliant idea can eventually make it to market.
Register Your Intellectual Property
If you are planning on sourcing your product in China, register your IP there even before you begin your search for sourcing agents. China recognizes the first entity to register an idea as the rightful owner–not the one who first markets an idea with advertising or a logo. Without registering your idea, you leave a gap open for someone else to register it for you instead. In this case, to secure your rights to the idea, you would have to pay the entity that registered your trademark in China.
It is best not to navigate this process on your own, but to hire an IP attorney that is fluent in Chinese and well-versed in the laws of patents, trademarks, and copyrights.
Patents, Trademarks, and Copyrights
File applications with the State Intellectual Property Office (SIPO) or in an international patent arrangement like the Patent Cooperation Treaty. Ensure that this application is translated correctly before filing.
Now that you have a brilliant product in mind, and the perfect name for it, you should take quick action to protect that title with a trademark. Pick a strong trademark–ideally, one that indicates the type of product you are selling to customers, and that is not so similar to another product that there would be confusion in the consumer base. Register your trademark in English, Chinese character, and Pinyin names with the China Trademark Office. Before you file, check China’s online trademark database to identify too-similar trademarks that are already registered, even if that product is very different from your own. Once you have your trademark registered, you must continually use it to protect yourself from counterfeiting and infringement.
Registering copyrights is not required, but may be done through the National Copyright Administration. This serves as useful, publically-available evidence if you have to enter into a copyright dispute.
Protect Yourself While Seeking Quotations
You will likely request quotations from various suppliers as you attempt to find the perfect one to bring your idea to fruition. Be conservative with the amount of detail you give on your product, as others could run off to develop a competitive product with your ‘secret ingredient.’ For example, if you have designed fashionable yoga pants that also come equipped with an innovative antimicrobial lining, aim to reveal the basic design to potential suppliers without getting too detailed on the specific materials. You can reveal more details as necessary once you develop a deeper relationship with your supplier.
Hide Your Secrets with a “Black Box”
If you are still feeling cautious about the safety of your intellectual property with your chosen supplier, you can split up the production of your product by hiring a third-party assembly contractor to put on the finishing pieces or branding. This third-party is often referred to as a “black box.” In this way, your product cannot be imitated by your supplier down to the minor details of the final piecing and logo. Your “black box” assembler could have equipment that your initial supplier does not, or you may introduce an element to production at this point in the manufacturing chain that cannot be easily replicated, such as a logo stamped in a particular way.
Clear Contracts and Documentation
The contract between you and your Chinese supplier should be clear, concise, and ideally, bilingual in your native language and Chinese. If worded well, you lower the chances of your supplier accidentally violating terms of your IP agreement. This contract should be finished before the onset of production. If you already hired an IP lawyer located in China, they can write this contract for you.
In addition to your contract, document your organization’s other IP efforts, like the dates in which you registered with the China Trademark Office, in case you will ever need to enter into any infringement disputes.
Play the Game
At some point, threats to your trademark can be inevitable. For this reason, take a lesson from larger companies that operate in China without the competition from counterfeit goods, like Adidas, who employs full-time IP attorneys in China to be on the lookout for trouble. Or Nike, who works closely with Chinese customs to sniff out counterfeits of their products going in and out of the country. If you register your trademark in China, you can similarly provide your product information to Chinese customs so that they can similarly watch out for imitators. You can also build relationships with government officials dealing in IP, like those working for the Ministry of Public Security or the General Administration of Customs.
Take the time to get all your required intellectual property paperwork organized, and if you need help, don’t be afraid to seek it out. The cost of dealing with competitors and counterfeiters after your IP has been stolen will always exceed the cost of hiring a well-versed, local IP attorney to lead the way. Be cautious with the information you provide potential suppliers, and consider compartmentalizing production of your invention to prevent a single employee from knowing your product precisely from start to finish. When you have laid the foundation of your IP management, consider establishing relationships with Chinese government officials and customs agents that may help you identify and deal with threats.
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