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Name of Speaker, Position
James Ng
Principal, JN Legal Consulting
Consultant, Wragge & Co LLP, Guangzhou Representative Office
18 June 2013 James Ng
Name of Speaker, Position18 June 2013 James Ng
“Go compare”
Population 1.35 billion (1st)GDP (2012) US$8.2 trillion (2nd )
Population 63million (22nd)GDP (2012) US$2.4 trillion (6th)
Name of Speaker, Position
Publicly available information e.g. Companies Registrar or in China, AIC (Administration for Industry and Commerce)
Visit potential suppliers
Use a consulting company especially in China and India
Covert investigation
18 June 2013 James Ng
Name of Speaker, Position
About the company – properly set up and solvent? What is its business scope?
Reliability – references and other international customers
Track record – managing IPRs
Will subcontractor(s) be used? How many?
Location of factory – counterfeit ‘hotspot’?
Factory’s processes, procedures and quality control?
18 June 2013 James Ng
Name of Speaker, Position
Are they worth the paper? Yes, common law countries (Hong Kong, Singapore, Malaysia, India). China?
What type of Agreement? Will standard T&Cs attached to POs do?
– Ongoing or a one-off sourcing order?
– Simple “off-the-shelf” goods with brand attached or highly technical products?
– Simply manufacturing? Additional services such as design or packaging?
Recommended approach – start with international standard agreement and adapt it taking local advice
18 June 2013 James Ng
Name of Speaker, Position
Ownership of IPR, use of IPR and protection of IPR and confidential information
Subcontracting/assignment
Ownership of tooling
Destruction of waste or substandard products
Insurance
Audit rights
Non-compete clauses
Indemnity
Product recalls
James Ng18 June 2013
Name of Speaker, Position
MOFCOM : Ministry of Commerce
BOFTEC : Bureau of Foreign Trade and Economic Commission
PSB : Public Security Bureau
SAIC : State Administration of Industry and Commerce
FESCO : Foreign Enterprise Human Resource Service Company
TSB : Technical Supervision Bureau
SAFE : State Administration of Foreign Exchange
Name of Speaker, Position
Representative office
“…to conduct such activities as market research and surveys, promotional activities, and liaising with local manufacturers, suppliers, distributors, the foreign office…”
Relatively easier to set up, little direct investment
Application process start to finish – ONE month
No restriction on location (Note: foreign business tenancies)
Can be easily closed down
Name of Speaker, Position
WOFE
WOFE is a limited liability company with NO local Chinese investment.
Freedom to operate without a local Chinese partner
Only permitted to conduct the business that the Chinese government has agreed it can conduct – BUSINESS SCOPE
Extremely important to get the BUSINESS SCOPE right. Can submit for approval a business scope that the approval authorities will ultimately scale down or redefine
3 broad categories (1) service WOFEs (2) manufacturing WOFEs (3) trading and manufacturing WOFEs
Name of Speaker, Position
Must have a Chinese name. Four requirements
(1) Trade name (2) City (3) Industry (4) Co. Ltd.
e.g. James Ng Engineering Plastics (Guangzhou) Co. Ltd
To use the word “China” – a minimum registered capital of USD6.5 million
Choosing not to have an industry indication – a minimum registered capital of USD13 million
Name of Speaker, Position
Planning Paper
Location
Capital contributions
Technology and IP Contributions
Approval Procedures and Time Frames
Staffing
Negotiation and confidentiality
Name of Speaker, Position
Local partner? Need connections? Local market experience?
What is your industry?
Are you bringing technology?
Conducting business in Asia or testing the water?
How much control do you want?
What due diligence have you conducted on your other options/partners?
Name of Speaker, Position
Trade Mark Law (2001, amendment proposed in the next two years)
Patent Law (2009, third amendment) Copyright Law (2001) Anti-Unfair Competition Law (2007) Other IP-related Laws: Product Quality Law, Internet
Copyright, Computer Software Regulations, Plant Varieties, Integrated Circuits, Technology Transfer, Food & Drug Administration, Anti-Trust Law…)
Very Young: Only about 20-25 years old Up to International Standard: Compliant with TRIPS and
WTO in most areas
18 June 2013 James Ng
Name of Speaker, Position
There are three main enforcement options:
administrative route
civil litigation route
criminal route
Also, customs protection
18 June 2013 James Ng
Name of Speaker, Position
Factors to consider:
Nature of your business
Remedies
Source of infringement or market clean-up
Scale of infringement
Evidence - extent and strength
Budget
Time pressure
18 June 2013 James Ng
Name of Speaker, Position
Prevention better than cure.
Do your homework:
– Effective IP registration programme
– due diligence on business partners/supply chain
– ensuring contracts are in place and getting good translations
– scheduled and unscheduled visits to your operations in China
– build up contacts with local government authorities (importance of “guanxi” e.g. in China) and educate them about your products/IPRs
18 June 2013 James Ng