More than Just a Legal Aspiration
By Jayde Wood, Intellectual Property Lawyer
In today’s innovation-driven economy, it is often said that ideas are the new currency and their value is based on the available protection. The exclusive right to monopolize ideas is one of the most powerful commercial tools to protect market share and leverage deals. Intellectual property (IP) is therefore a valuable business asset and is more than just a legal aspiration.
IP rights are jurisdictional in nature, meaning that you will need to secure IP protection in each one of the countries where you plan on doing business. It would be impractical and costly to obtain IP rights in each and every country in the world. In this regard, it is important to implement an IP strategy that aligns with your business strategy to protect your core IP and enable you to expand into your target markets. An IP strategy that does not include China is incomplete. With a population of 1.3 billion, China is the world’s second-largest economy and represents an exciting untapped global market.
Since China joined the World Trade Organization in 2001, its IP regime has developed rapidly and its IP office, the China National Intellectual Property Administration (CNIPA), works at an efficiency level that is very much in line with international standards.
China’s IP regime is somewhat similar to the ones in North America in that commonly recognized IP rights, such as trademarks, patents, designs, copyrights and plant breeders’ rights, can all be protected under Chinese law. However, many nuances exist. For example, unlike North America, China offers a third distinct type of patent rights: utility models. A utility model is sometimes referred to as a “small invention” in China because it involves a lower level of inventiveness, has a shorter term of protection and costs less to acquire than an invention patent such as we have in North America. When used strategically, utility models can offer better IP protection in China beyond what is afforded by invention patents alone.
Registering IP in China provides many advantages. For example, the owner of a Chinese patent or a Chinese trademark registration can ask the Chinese Customs Office to seize any infringing or counterfeit products and prevent them from leaving the country.
China’s IP regime is not perfect and may not have the best reputation. However, many positive changes have or are already occurring. For example, there are dedicated IP courts with judges to handle highly complex IP cases. The Trademark Law has also been amended to introduce an intent-to-use requirement to combat trademark squatting. The amendments came into force on November 1, 2019.
China is Canada’s second largest trading partner and represents a massive opportunity for Canadian businesses looking to diversify and expand their clientele. It is important to consider how to enter the Chinese market from an IP perspective. IP rights are not merely a litigation trump card. Instead, they are business assets that can be used to enhance value and establish market share in the world’s second-largest economy.