Helping SMEs protect their rights in China
China is a major trading partner for the EU and its biggest source of imports. More and more European companies are thus naturally finding themselves operating on the Chinese market - but many are worried about intellectual property rights (IPR) issues. The new China IPR SME Helpdesk aims to help Europe's SMEs be better prepared for business with their Chinese partners.
Trade with China has increased tremendously over the past 30 years. In 2006, China was the EU's second largest trade partner and its foremost source of imports. Unfortunately, it is also the largest producer of counterfeit goods. Some 58% of counterfeit products seized by EU customs in 2007 were from China. Complaints about IPR breaches have also been intensifying.
The problem is widely acknowledged, and China itself is making determined efforts to tighten up provisions for intellectual property protection in the country. Europe is supporting those efforts, including through the EU-China Project on the Protection of Intellectual Property Rights (IPR2), launched jointly in 2007 by the European Commission and the Government of the People's Republic of China.
A major new initiative in this area is the China IPR SME Helpdesk launched by the European Commission on 23 May 2008. Its objective is to provide support to Europe's small and medium-sized enterprises in particular with regard to the protection and enforcement of their IPR in China.
Know before you go
The problems faced by SMEs operating in China are, to a certain extent, due to lack of preparation. "The market has changed in China over the last ten years," points out the Commission's project officer for the new Helpdesk, Stephanie Mitchell. "Initially, it was mainly multinationals, large companies, and those with a conscious strategy to enter the Chinese market, which were operating there. Now, many smaller companies are finding themselves working in China, in many cases without adequate preparation."
One of the aims of the Helpdesk is to increase awareness among SMEs of the need to be prepared and to provide the information necessary for them to be able to protect themselves. "Over the last few years, there has been an increasing drumbeat of complaints about IPR infringements relating to China," confirms Mitchell. "These have increased both in number and intensity, but in many cases the companies complaining have done little or nothing to protect themselves."
"There is a certain perception that China is a sort of 'wild west' with regard to IPR and that either there is nothing to be done, or it would be too difficult, or too expensive. This is not always the case. There are things which can be done and not necessarily at great cost," insists Mitchell. "The situation may not be perfect, but China does have a legal system and administrative structure in place to deal with IPR issues. It is a matter of knowing how to go about it."
Information, training, advice
This is where the Helpdesk will come in, providing first-line information for SMEs, training in the protection of IPR in China and offering advice aimed both at preventing problems and at helping companies deal with situations that arise. A panel of 15-16 experts, with extensive experience in the protection of IPR in China, will be available to advise SMEs on how to make the necessary provisions for the protection of their business. "They will help companies analyse their particular situation so that they can decide what they should protect and at what cost," confirms Mitchell.
The experts will also work closely with the Enterprise Europe network, training trainers, participating in seminars, both in China and in Europe, and providing a range of information materials. Initially, materials will be available primarily in English, but the aim is to have them translated into five or six other languages in due course, depending on demand.
The Helpdesk is intended as a first port of call and, where necessary, companies will be directed to the most appropriate source of further information/advice. The service will also provide useful tips on how to manage each step of the process: dealing with law firms, working with the relevant parts of the Chinese administration, and so on.
The best protection is prevention
"As with so many other things in life, prevention is definitely better than cure when it comes to protecting IPR. Some European companies have learnt this at great cost," points out Mitchell. A recent example is that of a Scandinavian company which had goods it had produced in China seized by Customs on their way out of China on the grounds that their product breached Chinese trademark law. It turned out that their former Chinese supplier had registered their trademark himself in China. This was not illegal as the Scandinavian company had not thought to protect their rights outside Europe. "Instead of the €1000 it would have cost to register the trademark themselves, the company ended up having to spend almost €2 million rectifying the situation," she adds.
The Helpdesk will help European SMEs with their forward planning and assist them in growing their IP value. It can also help with obtaining redress. "The Chinese situation with regard to IPR is more complex than in the EU, and there are many different bureaucracies with responsibility in different areas of the market," says Mitchell. "Ironically, this can mean that there are more possible avenues for redress, but you have to understand the system - or have access to someone who does." This is where the Helpdesk will come in, offering European SMEs their own source of local expertise.
The text only of the articles can be republished as long as the source of the article is quoted: Enterprise & Industry magazine (http://ec.europa.eu/enterprise/magazine/index_en.htm), © European Union, 2008 - 2012
