China continues to be an enticing but challenging market for many international companies, but in-house counsel for some of the most successful foreign brands in China say that there are a number of strategies that can help rights owners protect their intellectual property.
That's the message at a panel yesterday at Managing IP's Global IP & Innovation Summit in Shanghai featuring Helen Xu of Jaguar Land Rover, Ben Wang of Unilever, along with Gordon Harris and Jamie Rowlands of Wragge Lawrence Graham.
Strict adherence to formalities is a must, warned Xu. Though following rules and regulations is important in all aspects of IP protection, it is particularly crucial when preparing evidence and putting together an enforcement case.
For example, when a brand owner is preparing to engage enforcement officials for a raid, it is crucial to bring a copy of the trade mark registration certificate, Xu said. A simple printout from the trade mark office's website is not enough. This is true even if the enforcement official assures you that the printout is sufficient- even if the officials are willing to carry out the raid with just the printout, the targeted infringer may challenge the raid later. If the case goes to court, the infringer may well avoid liability by pointing to this deficiency.
Similarly, foreign companies need to make sure that they get a certification of legal representation and authorisation, a document required by some courts in China. Xu said that though not having one does not automatically mean that your filings will be rejected, that can be one of the outcomes, which would obviously severely hinder enforcement efforts.
Xu stressed that a focus on following these rules is important in all parts of your enforcement efforts. While it may be tempting to take shortcuts, it is often not worth the risk as they can undermine your enforcement actions down the line.
"Avoid haste as it could make waste," she advised.
Pick your spokesperson
Ben Wang of Unilever also stressed the importance of preparation. This means not just preparing your case, but also putting in the effort to pick the right counsel. Wang said that rights holders sometimes seem to forget to find lawyers who are good speakers and have a strong court presence. For rights holders especially those not based in China, this means that you should not rely only on email communications. If you can't meet your lawyer in person, the next best option is to speak with them regularly on the phone.
Wang also said that it is also important to be in regular communication with the actual lawyer who will represent you in court, not just the client-facing partner who speaks good English.
He noted that though some of this advice seems rather basic, it is very important given some unique aspects of Chinese courts. Often, your case will be heard by judges who do not have a technical background. Judges, Wang explained, are really trying very hard to learn about the case, so having a strong communicator is especially important.
Wang said that another important difference for international rights holders is that some judges in China act more like mediators or arbitrators than judges. Rather than simply deciding the right and wrong of matters, some of these judges are also balancing the interests of parties and are also considering local concerns.
"The process is more collaborative, at least in the initial stage," Wang said.
In addition to picking lawyers carefully, clients need to prepare their cases thoroughly from the outset. For example, statistics show that courts are very unlikely to overturn invalidation decisions at the patent office- in 2013, the court upheld 472 invalidity decisions and only overturned 65. Numbers from previous years were similar.
Thus, rights holders need to front-load their preparation for these cases. Whereas in some jurisdictions a party may strategically save their efforts for the appeal (a decision sometimes made to save costs), such tactics are not recommended in China.
Some of the strategies we considered when I was a lawyer in the US would not work here in China, Wang said.
Rowlands of Wragge also addressed the issue of judges weighing factors beyond the legal dispute in a case. He noted that in some instances, a rights holder may be suing an infringer that is one of the largest employers in a small town. An injunction against the infringer may affect the economy of the town, and a judge based there may be subconsciously aware of this fact, Rowlands said.
Thus, lawyers may want to consider ways to bring the case in other venues. So for example, if the infringer manufactures in a small town but distributes the goods through a seller in Shanghai, then the rights holder can bring the suit in Shanghai where the judge would not have the same concerns about the local economy.
Know the land
Though international rights holders sometimes complain about the state of IP enforcement in China, understanding the nuances of the Chinese market and learning the rules can help companies protect their rights.
"It's like the old saying in English: When in Rome, do as the Romans do," Xu advised.
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