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Jan 18, 2012

Countering the Counterfeiters in China

Geoff Nairn of the Wall Street Journal wrote a great article entitled the Patents are Virtue: Countering the Counterfeiters.  He notes in the article that: "China is not the only source of pirated goods but it is by far the worst offender, accounting for 85% of counterfeit goods seized in the European Union last year, according to the European Commission."
  
The article has great advice on some of the reasons why companies doing business in China are plagued with IP issues.  The article quotes advice from Dan's china law blog on the ABC of Losing Your IP in China.
A: Failing to use employee invention agreements. These specify that any invention made using the company's time, material or facilities belongs to the company, not to the employee.
B: Thinking that patents are the only IP that matters. Western companies underestimate the importance and value of trademarks and trade-secret agreements in China.
C. Neglecting the three Ns. Non-disclosure agreements stop suppliers disclosing IP to third parties. Non-use agreements stop Chinese contract manufacturers setting up as your competitors. Non-circumvention accords stop contractors selling direct to your customers.
What do you think?
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SeanHayes@ipglegal.com
IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S. www.ipglegal.com