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Businesses urged to protect intellectual property in China

04 July, 2006

With China predicted to become Australia’s biggest export market up from its current number two spot, Austrade said businesses must view protecting Intellectual Property (IP) as a central element of a Chinese business strategy.

The advice comes as exports to China continue to climb. Latest figures show in five years, merchandise exports to China more than doubled. For the financial year 2005-06 to April merchandise exports were valued at $14.4 billion compared to $6.3 billion for the same period in 2000-01.

Austrade’s Beijing-based Senior Trade Commissioner, Kym Hewett, says that it is essential Australian businesses properly manage IP as a core element of their China export strategy.

"Protections for IP routinely found and used in Australia may not apply at all, or in the same way, in China. Local advice in China and knowledge is essential to Australian businesses, otherwise any product that attracts a premium because of its brand appeal, or technology is at risk,” Hewett says.

“It’s imperative to register your IP in China to obtain protection and Austrade can advise on professional experts to assist with this process.

“There’s been substantial progress over the last 15 years in China to protect IP with well established procedures for the registration of patents, Trademarks, designs, trade secrets and domain names. China subscribes to all relevant international treaties and conventions.

“Managing IP in China is crucial and must be approached in a systematic and effective way.  Businesses need to ensure they have a good understanding of the realities of the Chinese business and legal environment,” he says.

Export opportunities in China go across the board and include resources and energy, agribusiness, food and beverage, health and well being, fashion, consumer goods, education and business services, ICT, infrastructure and automotive.

Hewett says there are some strategies businesses can use to utilise IP infrastructure to protect them.

“Businesses planning to enter the China market need to identify upfront their main IP risks,” he says.  “It’s important to find if you have IP that’s registrable in China and be aware of the costs and timeframes involved.  Also, check if your product or service is at risk outside of China (eg if it’s discovered by travellers, business visitors etc). It’s also important to find out just how loss of control of IP might compromise your core business objectives and to develop strategies to ensure IP doesn’t leak out into the market.

“Some of the strategies to overcome IP problems include maintaining secrecy around key elements of a production process, the provision of “black box” componentry, organising for partial manufacture in China and part elsewhere and surfing the wave of innovation,” Mr Hewett adds.

In the financial year to April 2006, export figures show Western Australia leads the way with merchandise exports to China valued at approximately $7.9 billion, Queensland follows with $2.2 billion, then New South Wales $1.6 billion, Victoria $1.5 billion, the Northern Territory on $460 million, South Australia $353 million, Tasmania $216 million and the ACT on just over $400,000.