Intellectual Property Concerns

Goals

To identify the current challenges that companies are facing around intellectual property in China and how to address them, IP related challenges from doing open innovation with other companies in China and how to address them, with examples from the packaging/labeling industry.

Early Findings

OVERALL CHALLENGES: IP RIGHTS PROTECTION

  • According to a source from the U.S. Department of Commerce, firms trying to protect their intellectual property rights are faced with unique challenges in China due to its market size and its "ongoing difficulties implementing a robust IPR protection and enforcement system."
  • US companies doing business in China face can face other IP related challenges such as bad-faith trademark registrations and rigorous IP ownership and research and development localization requirements.
  • Also, there are structural issues in administrative, civil, and criminal IP enforcement in China that presents challenges in protecting the IP rights of companies.
  • According to the US-China Business Council, there are ongoing issues with China's IP legal framework related to "trade secrets, uneven enforcement, and significant procedural barriers that frustrate company efforts to protect IP in China."
  • If further states that counterfeiters and infringers in China are increasingly sophisticated and are able to "exploit procedural loopholes, proactively seek to invalidate legitimate patents and trademarks, deploy advanced techniques such as reverse engineering, and find new ways to infiltrate legitimate distribution networks and build their own parallel networks."
  • An article by the Diplomat states that enforcing IP rights in China is difficult due to "local judicial protectionism, challenges in obtaining evidence, small damage awards, and a perceived bias against foreign firms."

Proposed next steps:

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