China: IP Enforcement In China

Last Updated: 20 June 2014
Article by Denis F. Berger

This article is a summary of the author's presentation at the SwissCham Shanghai event of 13 Feb 2014.

The usual perception of intellectual property (IP) enforcement in China is not a good one. Whereas many have realised that the laws in China, especially when it comes to IP, are flawless, actually enforcing the rights granted through these laws is considered an utter nightmare. This perception, right or wrong, does not have to influence or even prohibit the establishment and execution of a reasonable IP strategy. Things are not that bad--it is just a question of how you look at it.

Yes, there are several horror stories when it comes to IP enforcement in China. There was the case automobile powerhouse BMW had against Shuanghuan in which the German company claimed the Chinese company had completely copied the design of the former's X5 model. It still doesn't take hours and an advanced degree in industrial design to side with BMW after a quick sizing up of the two cars. They are identical. However, the court disagreed and denied BMW's claim to ban sales back in 2008. China, right? Nope! This case was decided in Torino, Italy!

The same claimant, BMW, decided in 2013 to move against MBWL, a Chinese clothing manufacturer. MBWL used a logo very similar to BMW's (the white and blue circular one on the hood and the back of the cars). This case was decided in China and this time in favor of BMW, to the tune of RMB 2 million. The judge presiding over the case explained the court's decision to award: "the highest statutory monetary compensation shows China's determination to crack down on infringement and to support brands."

This determination is supported by most senior Chinese officials. More importantly, the relevance of IP and its protection and enforcement seems to have sunken into the heads of many managers of Chinese companies. How would you otherwise explain numbers like 24,544 IP cases in China in the first five months of 2013? Furthermore, only 504 involved overseas litigants. It clearly indicates that Chinese companies rely on IP enforcement, and with increasing tendency.

What exactly is the extent of litigation? In 2012, nearly 80-percent of the 87 IP cases handled in Shanghai that involved foreign litigants were decided in favor of the foreign party. This is a very encouraging sign. This could even be interpreted as a reason to now focus on all the other challenges foreign companies face in China, such as labour costs, talent retention, administrative hurdles, local competition, investment restrictions, etc. However, IP enforcement is not a one-off event. It is instead a constant effort to screen the market, educate staff, maintain control over IP and how it is registered, used, renewed, etc. and, above all, to continue enforcement.

All these efforts need to be based on a strategy that is tailor-made for a company and its IP in question. Such an IP strategy needs to be based on realistic expectations. Despite the very large amount of compensation BMW was awarded, most compensation amounts range between RMB 200,000 and RMB 400,000. Suing to get rich is therefore not a real option in China. However, enforcing IP against infringers can help a company build up a reputation in the industry for being more proactive than others, making the active IP enforcer and copying its products less interesting and better left alone. One must consider that being involved in a legal action often also effects on the counterparty, as defending itself is time-consuming and costly.

Furthermore, communication is key as the realities change from case to case (what might be true for Shanghai may be not be the case in Zhejiang province) and the goals may have to be adjusted as new facts come up in the process. This requires a watchful eye in respect of communication between, for example, a local GM and his or her staff, the attorney, the decision makers in the headquarters, headquarters' legal counsel and external advisors, etc. Communication errors, over-promising, misunderstandings, delayed updates, incorrect instructions, etc., are all possible and happen faster than one might believe. Fast-changing realities, time differences between China, Europe and the U.S., language issues and sometimes a basic lack of understanding of what is actually happening are only some of the reasons for redundant, wrong or inefficient communication. Underestimating the time a company's management has to allocate to dealing with legal matters is often also a factor that can cause further frustration.

The actual enforcement, based on a proper strategy and to achieve realistic goals, can now be initiated. It often starts with building a case against an identified infringer by notarising online material, notarising the staged acquisition of products, and notarising photographs of points of sale in shops and stalls in trade fairs. Online trading platforms such as Alibaba provide a low-key, online IP infringement claim system to address, for example, fake products being sold on the platform. If successful, a seller may face different consequences, from removal of their offers to deletion of accounts. Understated measures could further include early screening at trade fairs for infringing products and requesting protection measures from the event's own IP office, which would include the removal of the infringing material, closing the stall, or even banning the infringer from further participation.

A very effective option is to exert commercial pressure on the infringer, provided, of course, such pressure is possible. Outstanding invoices in favor of the infringer, for example, can only be paid after a newly concluded non-infringement agreement is signed and fulfilled. The availability and success rate of administrative actions highly depend on the location of the authorities. Whereas such actions are probate measures in Shanghai, for example, it has proven difficult to impossible in other provinces. Pre-emptive measures such as preliminary evidence preservation have proven to be a very effective measure and have been granted in a very short time--two months since the application is the fastest so far. Of course, such measures require commitment to file a full-scale civil lawsuit. But the results can be more than worth the commitment. Even the toughest copycat gives in to the authority of a judge, his assistant, two policemen and a couple of lawyers. Judges have performed very efficiently and adopted a straight-forward approach when it comes to identifying and sealing probable copies or parts thereof. Such measures can also have the benefit of revealing further information such as the identities of the copycat's suppliers. This information can then be used to put these suppliers under pressure and even lodge subsequent lawsuits against them, drying out the supply chain. We have even observed judges pro-actively offering solutions which were even more favorable for the claimant.

Furthermore, the benefits of attacking from different angles should not be underestimated. Blocking online trade can cause massive financial losses. Halting exports of export-oriented infringers can also have a serious negative effect on their businesses. Furthermore, by conducting enforcement measures, most of which will result in publicly available information, a company can build up a track record in scaring away future infringers. It can also gain additional and valuable knowledge about the infringer's industry, its suppliers and distributors.

Conclusively, securing IP registration and protection in the relevant jurisdictions (in "Greater China" this would be in China, Hong Kong, Macao and Taiwan), is of course inevitable for any successful IP enforcement strategy and its execution. Based thereon, a reasonable and pragmatic enforcement package can be made and executed, adjusted or extended if necessary, in close and clear communication with the involved parties. Relying on an approach of realistic expectations, clear goals, the necessary flexibility, efficient communication and a tailor-made strategy allows the rights owner to benefit from a rising star in China's legal system, IP law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.