A Trademark Win in China

For ADC, the ruling makes it easier and more profitable to do business in China. Ouyang thinks that all American companies should stick to their guns as they try to protect intellectual property in China. He and Johnston suggest that other firms:

• See hassles around intellectual property protection as a necessary part of reaching a vibrant new market. “Even though their system and culture aren’t perfect from an intellectual property standpoint today, being in that market might be very valuable five or ten years from now,” Ouyang says.

• Assertively enforce all intellectual property rights in China. “Though we’ve agreed to some settlements, more recently we have received a public court order finding infringement. That’s a publicly available document that builds our reputation as a company that enforces its rights,” Ouyang says. That reputation, he says, makes it less likely that intellectual property pirates will choose ADC as their victim.

• Claim copyright in every possible class and subclass. Because Chinese intellectual property law is based around property classes and subclasses, unclaimed spots are available to new copyright or patent applicants, no matter how closely related their products or concepts may seem to your product or concept. “You really need to cover all the subclasses in your registration,” Johnston says.

• When fighting an infringement, “throw everything you have at it in the beginning, to maximize your chance of success,” Johnston says. Use every bit of evidence the first time you protest, as you may not be able to add evidence on appeal.

• Realize that it’s gradually getting easier for American companies to enforce intellectual property rights in China—in part because of firms that diligently protect their ownership. In December, for instance, ADC filed a patent infringement suit against another Chinese company, and received an injunction and damages. “It was quick, inexpensive, and they reached the right result,” Ouyang says.

In retrospect, the years ADC spent fighting the initial infringement may have set a new precedent for foreign companies doing business in China. “This case gives people like me and my clients hope that we’ll be able to more easily enforce our rights in China, even when we don’t have a perfect case under Chinese law,” Johnston says. “We have this perception that the Chinese system puts foreign companies at a disadvantage, and here they went beyond the established law and ruled in favor of a foreign company over a local, Chinese company. That’s good news for intellectual property owners outside China.”