The reality for Australian SMEs who become the victims of IP infringement, or even worse, competitors to the manufacturer they originally introduced their new designs to, seldom fully recover. Protection is about being proactive and investing time and money into laying good foundations with a long-term view.
China Blueprint Consultants believe that through good management, proactive due diligence and contracts, the following protection strategies can be achieved on a budget:
- Prepare in Chinese, and have signed, legally enforceable contracts to protect against competition and to maintain confidentiality.
- Educate the manufacturer to ensure they understand the meaning of the contract/s.
Regularly monitor and undertake checks on the factory, even if they belong to a JV partner
- Register the intellectual property with the relevant authorities
- Seek advice from experts who know and understand the local China conditions.
- Have an action plan for the worst-case scenario before it happens and be ready to enact it at the first sign of trouble.
- Educating the manufacturer about the actual meaning of the contract once in place is time well spent. It is easy to assume that all signatories know what they are signing up for, but this is a common area for misunderstanding.
China Blueprint Consultants recently had a shoe manufacturer sign a confidentiality/anti-circumvention agreement. After the signing, the manager was surprised to learn he would not be able to sell the client’s designs to his other clients without permission.
It is also important to remember that it may not always be the Chinese manufacturer looking to copy the IP. China Blueprint Consultants have seen disgruntled Western employees and business partners taking their ex-Australian employer’s knowledge to another manufacturer to go into direct competition with them. It is therefore important to make sure that one pays equal attention to his or her contracts back home as well as those overseas.