Intellectual property protection in China

Canadian companies should develop and implement a comprehensive strategy for protecting and enforcing their intellectual property (IP) when doing business in China. 

Registering your IP in Canada does not automatically give you IP rights in China. Also, while there are some similarities, the IP registration and protection systems in Canada and China are not the same. It’s important to be familiar with the Chinese IP system.  

Over the past few decades, China has:

• modernized most of its IP laws and regulations
• joined most major international IP-related agreements
• established specialized IP courts
• streamlined legal processes to better align with international standards

Core IP-related laws in China include:

• Patent law
• Trademark law
• Copyright law
• Anti-Unfair Competition law

There are also many regulations and guidance documents that accompany these laws. These measures protect patents, designs, trademarks, copyrights and trade secrets. China also has specialized laws and regulations that provide protection in specific areas, such as geographical indications and plant varieties. 

To register IP in China, a company must submit applications to the appropriate agency or via the relevant international system.

Trademarks are registered through the China National Intellectual Property Administration (CNIPA). This can be done in two ways: 

• Directly, which generally involves checking the availability of the trademark, preparing the necessary documents, submitting and paying for the application.
• Through what is known as the “Madrid  System”, which allows for the filing of trademarks in multiple countries through a single application filed with the World Intellectual Property Organization (WIPO).     

You can apply for a patent either directly to CNIPA or through the Patent Cooperation Treaty (PCT) system. The PCT system lets you apply for protection of invention patents in multiple countries at once through a single international application. Applications need to include detailed documentation such as the request, claims, descriptions, and any necessary drawings.

There are three types of patents in China:

• Invention Patent: Protects new technical solutions or improvements related to a product, process, or method
• Utility Model Patent: Covers new technical solutions related to the shape, structure, or combination thereof of a product that are fit for practical use
• Design Patent: Protects new designs of the shape, pattern, or combination thereof, as well as the colour, shape, and pattern of a product, which create an aesthetic feeling and are fit for industrial applications

 The National Copyright Administration of China manages copyright registration in China. Unlike other types of IP protection, copyright protection is automatic upon creation of a work, no matter where in the world that takes place. However, registering your copyright in China provides formal legal evidence of ownership, which can be crucial in disputes. The registration process involves applying to the Copyright Protection Center of China and paying the required fees. 

In most countries, including China, trade secrets are not registerable. In China they are protected through a multi-layered framework that includes the Anti-Unfair Competition Law, the Civil Code, and the Criminal Law. This allows for criminal prosecution in severe cases. Companies need to implement strict internal controls to manage their trade secrets. This can be done by:

• limiting access to sensitive information
• using non-disclosure agreements (NDAs)
• training employees on confidentiality obligations

These steps can help you pursue civil or criminal legal action when misappropriation occurs.

The enforcement of IP rights in China involves multiple agencies and mechanisms:

• Administrative enforcement:  The State Administration for Market Regulation (SAMR) – China’s central market regulator, along with its local branches, can:
  • impose fines
  • confiscate infringing goods
  • order cessation of infringing activities
• Judicial enforcement: Specialized IP courts and IP tribunals handle IP-specific disputes.
• Customs enforcement: The General Administration of Customs of the People’s Republic of China (GACC)  has the authority to enforce certain IP rights (registered trademarks, copyright, and patents). GACC also has the power to seize infringing goods, and prevent counterfeit products from entering or leaving the country. IP rights holders can register their rights in GACC’s IP protection system, and it will inspect imported and exported goods either on its own (ex officio), or at the request of IP rights holders if they suspect infringement.
• Alternative dispute resolution: Mediation and arbitration are increasingly used to resolve IP disputes and are generally available in China.
• Criminal enforcement: The Public Security Bureau (PSB) investigates certain criminal IP infringement cases. 

Despite improvements made over the years, China’s IP regime continues to present significant challenges for companies doing business in China. Ongoing concerns include:

• counterfeiting and piracy
• bad faith trademark registrations
• trade secret theft
• inconsistent enforcement of patent and trademark infringement cases
• online piracy
• compulsory/involuntary technology transfer

Complex legal procedures, local protectionism, and lengthy litigation processes can create challenges for Canadian companies seeking to enforce their IP rights.  

Canadian companies must remain vigilant and proactive in protecting their IP rights. As early as possible (ideally before entering the market), companies should develop a comprehensive IP protection strategy for China. 

Properly registering your IP is essential. If the right is registered in China, enforcement is much more straightforward. Monitoring the Chinese market is also important to ensure that copies of your products are not making their way to your clients being circulated to your clients, wherever in the world they are located.

Understanding the legal framework, leveraging enforcement mechanisms, and addressing the unique challenges of the Chinese market are all crucial for safeguarding your IP in China. 

Finally, you must establish clear contractual clauses on IP protection with partners, distributors, licensees, or employees to help minimize the risk of infringement by these parties.

Canada’s Intellectual Property Office (CIPO) provides information and guidance on protecting  Your IP abroad., including a China-specific guide.

Please do not hesitate to contact us  directly with any inquiries.