you are sourcing from China, manufacturing in China, or selling
into the Chinese market, you need to be aware of the risk that your
intellectual property can be stolen. Horror stories abound. We sometimes
think of China as completely lawless and irresponsible in this regard,
when in reality they are simply at a stage that parallels our history
about 100 years ago, at which time the US showed as much disdain
for intellectual property rights. Since the Chinese are not breaking
new ground in this regard, we can learn from our past and understand
that respect for intellectual property rights will grow, and in
fact is now growing albeit slowly, and at the same time be very
aware of current risk and be careful to manage it.
Risk management will
involve knowledge of the culture, and of the fact that employees’
loyalties may not lie where we think they do, thus care in splitting
responsibility and knowledge so that no one group has all the pieces
to the puzzle, and also caution in utilizing certain business vehicles
such as joint ventures. It will involve strategic planning that
allows various components to be manufactured in different facilities
with final assembly in still another one, or in a different country
altogether, and diligence with respect to patent filings so that
we are assured that filing patents internationally, particularly
in China, will in fact help rather than hurt our rights.
Other steps will involve
investigation of potential business partners, and the use of the
proper employment agreements with the right confidentiality provisions.
Additionally, the Chinese market will need to be monitored for evidence
of trademark or patent infringement.
It will be important
in some cases to explore the Intellectual Property insurance market
to see if such coverage will make sense for our situation.
We will conduct and/or
oversee and control all of the above processes, and more, as appropriate
to your circumstance.
company should think like
an intelligence organization, sharing technology and know-how only
to the extent necessary.”
Shenkar, author of
The Chinese Century