SME Spotlight #6- James Love Legal - Intellectual Property Special
'Intellectual property' is one of those subjects on which everyone has opinions, and it's very hard to find a real expert. But James Love is a real expert.
James' legal practice specialises in sorting out international IP issues – China has been an important focus for him for many years, and he visits there regularly. His senior colleague at James Love Legal in Harrogate is Lindsey Wrenn, a Registered Trade Mark Attorney; together they help British companies protect their IP in China, and Chinese companies to protect their IP in Europe.
Is that so? "We've had some litigation to do - Chinese companies suing British companies for infringing their products. There have been some interesting cases. The Chinese Intellectual Property Office has highlighted it as being a real success story".
The American Chamber of Commerce in China made some interesting findings regarding IP this year in its annual survey (available here). IP protection is now outside their members' top five concerns (increasing salary levels, unclear rules and staff retention rate highest), and their general belief is that both IP legislation and enforcement continue to improve year-on-year. Crucially, these members are, of course, already doing business in China. As James puts it, "It's not just a China issue. Wherever you're going to do business – the USA, Europe, even at home in Britain – you have to protect your intellectual property".
So why do many Western businesses not yet in China still seem to associate the country with specially high IP risk? "The issue of intellectual property has to be put in context; before 1985 there were precious few IP laws in China at all. It was close to a free-for-all. Copying wasn't breaking the law - it was part of the culture. This had an impact in two ways: first, Chinese who were copying didn't believe they were doing anything wrong, and second, the rest of the world gave China a strong reputation for being a place where people would copy you and would rip you off. I think there's still a legacy of that today – some Western people's views remain based on the 1970's and 80's.
"If you look at the last thirty years, China's IP laws and structure for protection have developed faster than probably any other country in the world. They are still advancing at a pace, every year you hear about new developments. There's a difference between the law and its enforcement, but I feel that the laws they have are actually reasonably advanced. You do hear stories of enforcement lagging behind the law, but you also hear about how this lag is being recognized and addressed. For instance, three specialist IP courts have been set up – that's something not even every European nation has. They are in three different cities. The further west you go in China, the less reliable enforcement is perceived to be, but even there the issue is being addressed. For instance, the fake Apple store in Kunming…"
Ah yes, I remember that one. Not even the employees in their Apple uniforms knew it was fake. Living in Chengdu at the time this case blew up (2011), it was a popular topic of conversation, mainly around the question: There are hundreds of fake Apple stores in this country – why pick on one in Kunming? But one high profile prosecution can be very important, and James tells me a special reason feature of this case, one that I hadn’t heard before: "The action was apparently initiated by the Kunming government, not by Apple. That indicates the seriousness with which the authorities take this sort of infringement".
I ask James how important he thought the "carrot" of WTO membership was in inducing China to strengthen its IP protection regime. He agrees that it was, "but the big turning point was in the 1980's when they introduced the patent system". What? China didn't have patents before then? "No, not that we would recognise. But its introduction has been very successful; now China registers more patents than anywhere else in the world". I've read that too – it certainly challenges the common prejudice that whereas the UK invents, China merely copies. "Yes I agree", says James, "though some commentators question the value of these patents, I don't think we should doubt that China is working hard to develop its own technology, and sees protecting that intellectual property as an important part of doing business".
How does one go about registering a trademark in China? "There are two ways. One is that you engage a Chinese lawyer (possibly via a UK specialist such as us) to take you through the process of filing. The other is that you file an international application which names China as one of the countries where it would be applicable; you can do that from any country which is a signatory to the international system, also known as the Madrid System. So, for instance, we can file an international application direct based on a UK or EU trade mark application, although it's still quite likely that we would need to involve a Chinese lawyer to see it through the final stages, when any local objections are being raised”.
In the case of sales from China to the UK, if copyright is infringed where do you take the case? "It depends where the damage is taking place; you may be able to make a case outside of China, but ultimately you would need to enforce it in China one way or the other. If you win the case outside of China, where has it got you? So it might be best beginning in the Chinese courts."
James also mentions that another option, rather than suing in a court, is to refer intellectual property infringement cases to the Administration for Industry and Commerce (AIC) system, a national government department with regional branches throughout China. As long as certain criteria are fulfilled, the local AIC can take action for you – there is a clear process laid out. "Many people don't realise that there are a number of options available. It's not quite the Wild West that people sometimes suggest".
My thanks to James Love Legal for their time. You can find them at www.jllip.com. If your business would be happy to feature in our SME Spotlight, please get in touch by writing to firstname.lastname@example.org
 For more information see https://www.chinacheckup.com/kb/explanations/china-aic