chinaI recently attended a meeting with a client in which I learned a lot about the real processes of doing business and protecting intellectual property in China. Because the process is still underway, I need to protect the information. Which, in my opinion, is tantamount to saying, “If I tell you I’d have to kill you.” When you can say that about your job, you know you are in the right place!
But I can discuss the issues involved with the case. First of all, though our client filed a patent to protect their product first, it turns out that their patent was not broad enough. Say, for sake of discussion, that they protected the idea of getting Goo from Play-do, because, at the time, they only did not know they could get Goo from other places. But it turns out that Goo can actually be gotten from Laffy Taffy! So now the company, we’ll call them Acme, must race to protect their patent on a broader scale. But to make matters worse, a Chinese company, we’ll call them Pirates Inc., has already applied for a broad patent that covers Goo from a wide variety of sources. Acme should be protected because they filed first, but it is far from certain. Either way, Acme needs to file a new patent to protect their Goo business.
But before Acme fights Pirates Inc. by applying for a broader patent, they are concerned about two things. First, does it hurt to have more than one patent on the same basic idea, Goo? No, it doesn’t. It turns out that Viagra is protected by several patents, so when one of their patents was disqualified by the Chinese government, they were ok, because they still had a couple more. Second, patents filed in one country can be applied to other countries through two treaties: the Patent Cooperation Treaty (PCT) and the Paris convention. Acme is concerned that filing in China instead of a Western country might make the patent weaker under those treaties. This is not the case, a patent filed originally in China is just as strong as one filed, in say, France. But the whole issue is still very complicated! Acme filed first, which gives them first right to protection, but only with Play-do Goo. Now a Chinese company has filed for a patent for Play-do Goo and Laffy Taffy Goo and whatever else Goo might come from, like Tootsie Rolls. So Acme is in a bind. But don’t worry, Acme is fighting back.
Lesson One: when you apply for a patent, make it as broad as you can. Lesson two: the more patents the better. Lesson Three: go ahead and file in China, everyone else will respect it.
Next, how did Pirates Inc. get the idea that Goo was something to get in the first place? Well, it’s likely that a company that Acme hired slipped the information to Pirates Inc. The thing is, the company that Acme hired was under a non-disclosure agreement (don’t disclose/give away our secrets!) with strict penalties. But the unnamed company is not the company Acme wants to go after at this point, they want to get Pirates Inc. But Pirates Inc. is a Chinese firm and the non-disclosure agreement was not written to be effective in China. So even if Acme sues Pirates Inc. for using secret information in the country the non-disclosure agreement was written in, it doesn’t matter, because that country does not have authority to punish Pirates Inc. by taking away Pirates Inc.’s money.
Lesson Four: are you afraid that Chinese pirates are going to black-market your goods? Make sure your contracts and agreements are enforceable in China!
All of this seems clear in hindsight, but Acme didn’t know Goo could be gotten from Laffy Taffy, nor did they know that the company they hired would slip the information to the Pirates. But this is what learning is all about, let’s not do it again!
