Protecting IP in Multiple Jurisdictions

A Dutch start-up InMotion VR, providing virtual reality solutions in the field of physical therapy, recently managed to secure a new important client in Hong Kong. The new client would not only become one of the biggest clients for the company, but would also be the company’s first Asia-based client. This business opportunity could potentially lead to several new ones, especially in Asian markets. As the SME relies on innovative technology, the owners were well aware of the importance of IP protection when entering new markets, so they were ready to invest in IP protection. The company understood the importance of software protection via copyright as well as the need to register company’s trade marks (including company name, product name and logo) and took the necessary steps to protect their IP in Europe. Furthermore, the company also decided to invest in design patents to protect their Graphic User Interface. As the SME was not familiar with IP rules and regulations in China, they contacted the China IP SME Helpdesk for advice on how to protect IP when entering China’s vast market. During the online consultation session with the Helpdesk IP Business Advisor, the SME learnt that when it comes to IP protection, there are, in fact, 4 different and distinct jurisdictions in China: Mainland China, Hong Kong, Macao and Taiwan. To enjoy full protection in Greater China, 4 different IP registrations must therefore be done. The IP Business Advisor also highlighted some key differences between the jurisdictions. For example, the fact that Hong Kong cannot yet accept Madrid System trade mark applications means that while it is possible to use one international application to obtain trade mark protection simultaneously in the EU and in Mainland China, the SME would currently need to draft a separate application for Hong Kong, which would have to be filed with the Hong Kong IP Office. Another relevant difference concerns software protection – while software is protected as copyright in all jurisdictions, Mainland China, in some specific cases, also accepts software patents. The Dutch SME finally had to choose the jurisdictions in which to protect their IP. Their main client in Asia was based in Hong Kong and the SME would initially be doing business only in that jurisdiction. However, the SME quickly realised the big potential for new clients in Mainland China as well as understanding the risks involved in not registering their IPRs in the jurisdiction that is so close to their main target market. Leaving their IP unprotected in Mainland China would expose the company to copycats in that jurisdiction. Furthermore, potential bad faith trade mark registrations could complicate market entry to Mainland China in the future.