IP Protection Challenge & Solution in Creative Business in China

You might also like:
Can an Employer Terminate an Employee for Concealing Sickness?
Key Considerations Before Establishing Your Business in China

Ideas and designs are the core assets of all enterprises in creative businesses, and their infringement can lead to significant financial losses and damage to reputation. In China, creative ideas and designs that aren't adequately protected are vulnerable to exploitation by potential clients or competitors.

To address these concerns, this article offers insights into intellectual property (IP) issues faced by creative businesses across various sub-sectors, including architectural design, product design, graphic design, web design, brand design, photography, cinematography, writing, and more.

1. Copyright & copyright registration

Copyright in China, much like in Europe, is automatically granted upon the creation of a copyrightable work. Works eligible for copyright include architectural and engineering drawings, fine and applied arts, literary works, music, sound recordings, dramatic and cinematic works, compilations, and software. It's crucial to remember that copyright safeguards the expression of an idea rather than the idea itself.

China permits voluntary copyright registration. Registering your copyright serves as presumptive proof of ownership and simplifies the process of enforcing your rights. Registration is inexpensive, straightforward, and highly recommended.

If you choose not to register, maintaining evidence of creation and ownership becomes paramount for proving your rights. Indicating the author's name, the date of creation, and using the © symbol on all drafts can help. Having a copy of your work notarized by a Chinese notary is another effective method to establish admissible evidence of creation.

2. Ownership of commissioned works

When creating works for others or commissioning someone else to create works for you, it's essential that your contracts clearly state who owns the copyright. In China, the party commissioned to create the work typically holds the copyright unless otherwise specified in the contract.

3. Registration of IP is mandatory for protection

Registering your IP in China provides the strongest protection. For industrial designs, invention patents, utility models, and trademarks, registration is mandatory for protection in China. Please be noted that registration in your home country is useless as such IPs are all territorially based rights. Your registration in China can only provide the necessary protection you are looking for. Although copyright doesn't require registration, doing so is beneficial if you ever need to enforce your rights.    

4. A contract well prepared by PRC lawyer.

Contracts can also protect your IP by specifying ownership and containing confidentiality clauses. However, contractual protection is only effective once negotiations reach a stage where a contract can be drafted. Confidentiality agreements ( " NDA" or "NNN")are advisable during preliminary discussions.

Employing preventative operating measures is key to IP protection in China. Before negotiations, set clear limits on how far you're willing to compromise on IP protections.

Knowing when to walk away from potential business deals that don't respect your IP is crucial, for example, you wanted to sign an NDA with a potential supplier and they are unwilling to do so, then forget it, find someone else.  Likewise, potential clients unwilling to acknowledge your IP protection are likely to infringe on your rights or fail to compensate you for your work.

5. Documenting is crucial & other strategies

In early stages or during bidding, clients might demand full conceptual designs and 3D renderings. Here, it's challenging to enforce confidentiality. Registering your IP and meticulously documenting document transfers becomes crucial. Meeting clients in person to gauge their professionalism and build a relationship, showing them only preliminary sketches, requesting upfront or milestone-based payments, seeking references, and inviting them to view full designs at your premises are additional strategies.

In summary, protecting your IP in China involves a multi-faceted approach. Registering your IP, crafting solid contracts, and implementing preventative measures are essential components of a comprehensive strategy to safeguard your creative assets in this dynamic market.