For many years, businesses questioned the merits of filing intellectual property (IP) rights in China because of concerns of widespread counterfeiting and limited enforcement and practical protections. While those historic concerns were not entirely unfounded, today, the greater risk for many businesses is not that Chinese IP rights cannot be enforced, but that those rights were never secured in the first place.
The myth was based on a flawed assumption
Scepticism around the protections afforded by filing IP in China emerged because infringement was widespread and enforcement was often difficult. These conditions led many to conclude that obtaining Chinese IP rights offered little practical benefit but in fact, without registered rights, businesses had fewer tools available to prevent infringement, challenge bad-faith registrations, pursue enforcement actions or protect their market position.
China’s IP framework: more essential than many businesses assume
China has been a member of the World Trade Organization and a signatory to the TRIPS Agreement for more than 25 years as well as a longstanding party to all the major international IP treaties, including the Patent Cooperation Treaty (PCT), the Madrid System and the Hague System. More than that, it is also one of the world’s largest users of all these international filing mechanisms.
One feature of the Chinese system that businesses should understand from the outset is its first-to-file approach, particularly in trade mark law. In contrast to jurisdictions where prior use may carry significant weight, ownership in China generally belongs to the party that first secures registration. The consequences of failing to file early can therefore be significant. A dispute involving the Michael Jordan brand and Qiaodan Sports illustrates this point. Despite Michael Jordan’s global reputation, extensive litigation with multiple appeals over many years was required to challenge registrations connected to the Chinese transliteration of his name that had already been secured by a third party. For businesses entering China, the case serves as a practical reminder that relying on overseas reputation alone is a risky strategy.
China has changed: shift from a manufacturing hub to an innovation economy
For many years, criticism of China’s IP system was linked to the perception that the country benefited more from imitation than innovation. That assumption is increasingly difficult to sustain. The country is now the world’s largest IP filing registry and one of the most significant centres of innovation globally. This shift has been supported by significant reforms, including specialised IP courts, the establishment of the Supreme People’s Court Intellectual Property Tribunal, and stronger remedies for intentional infringement. While enforcement challenges remain, the modern IP landscape bears little resemblance to the one that gave rise to the perception that filing in China was futile.
In short, the perception that filing IP rights in China is “pointless” reflects an outdated view of the Chinese market. Although challenges remain, China’s legal framework and enforcement mechanisms have matured significantly. Businesses should aim for a well-designed China strategy which should include early registration of trade marks, patents and designs where appropriate. In many cases, the greatest commercial threat is not ineffective enforcement, but discovering that a competitor, distributor or bad-faith actor has secured the rights first.