EU SMEs and IP: Taking your ideas to China’s market

Innovation is a key source of growth, and protection of Intellectual Property (IP) has always been the driving force of innovation. The European Union (EU), as global leader in green and digital technologies, has been taking measures to incentivise EU SMEs to make use of the full potential of IP and put them on the right track towards economic recovery.

IP has proven to be a useful tool for enterprises to reach new markets as it provides them with comparative advantage over competitors. Issues covering the application, protection and use of IPR are no longer exclusive to big enterprises and are as important for SMEs due to their vulnerability to external risks. Yet, less than 10% of EU SMEs uses IP to protect their intangible assets. Not protecting your IP assets (patents, copyrights, trademarks, designs, trade secrets) could seriously jeopardise efforts to enter markets outside the EU such as China.

EU-China trade and IP relations

The EU and China are two of the largest global economies and important trading partners. Trade in goods and services, as well as mutual investments, have registered steady growth over the past years. The EU is committed to providing a level playing field, easy market access and efficient intellectual property rights (IPR) support for its enterprises by cooperation, exchange and dialogue with major partners. China on the other hand, pledges to open its market to the outside world and continuously optimise business environment, whilst strengthening IPR legal framework. Yet, despite certain noticeable improvements, there is a long way to go and many problems continue to occur as EU businesses often encounter legal or administrative barriers and uncertainties.

Although the EU and China are members of the WIPO and parties to international IPR agreements such as the Paris Convention, Berne Convention and TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights), which ensure that the EU and China largely adhere to the same IPR framework, we cannot ignore the differences between them.

The EU has taken various actions including trade negotiations, IPR working group meetings, and IPR technical initiatives to positively engage with China’s IPR stakeholders. As a major headway in EU-China trade and IP relations, on 14 September 2020, EU and China signed the Geographical Indications Protection and Cooperation Agreement, which took effect on 1 March 2021. The agreement can boost trade in GI products between the EU and China benefitting SMEs on both sides while also protecting their intangible assets.

EU businesses and China’s IP landscape

EU businesses operating in the Chinese market should be wary of the IPR conditions in China, especially those SMEs who have limited financial means or those who might be more prone to IP infringements. Because of the sheer size of China, monitoring competitors and possibly enforcing your rights might become quite the ordeal. To limit the chance of unpleasant surprises, it is of crucial importance for SMEs to be well informed, allowing them to make strategic decisions regarding their assets.

While the EU and China largely adhere to the same IP framework, there are some significant differences that SMEs should be aware of. For example, while unregistered trademarks and design rights could enjoy some protection in the EU, this is mostly not the case in China. Furthermore, as China follows the so called first-to-file system, whereby the first person to file an application to register IP will usually be granted rights over that piece of IP, it is vital that SMEs planning to do business in/with China register their IP in China as soon as possible. Because IP is territorial, the IP rights that EU SMEs enjoy at home do not automatically extend to other markets such as China, unless specifically registered there.  

To inform and support SMEs that operate abroad, the EU runs IP support tools and projects in complicated third markets such as China, South-East Asia and Latin America.

For those SMEs operating or planning to do so in China, the EU runs a specialised China IP SME Helpdesk project, as well as an IP cooperation project called IP Key.

IP Key China is directed by the European Commission and implemented by EUIPO (EU Intellectual Property Office). The extensive IP cooperation between the EU and China prompted its launch over a decade ago. It aims to support and facilitate market access to international firms and innovators, especially taking into account concerns expressed by European businesses. To ensure market access, the EU cooperates with the Chinese authorities to increase transparency and improve the implementation of the intellectual property and IP enforcement system. It also supports the EU-China IP Dialogue Mechanism and works to raise awareness on the importance of IP in China.

Through years’ efforts, IP Key China has become a well-known brand for EU-China IP cooperation, which is featured by a wide range of stakeholders, including government, businesses, academia, service providers, industrial associations, research institutes, and by a broad geographical scope, from Changchun in Northern China to Haikou in the South. High-level meetings include the EU-China Conference on IPR Protection and Innovation, hosted by IP Key China since 2018, and with over 450,000 online viewers in 2020.

The China IP SME Helpdesk supports European Union (EU) Small and Medium-sized Enterprises (SMEs) to both protect and enforce their Intellectual Property Rights (IPR) in or relating to Mainland China, Hong Kong, Macao and Taiwan through the provision of free information and services. These take the form of jargon-free, first-line, confidential advice on intellectual property and related issues, plus trainings, materials and online resources. The Helpdesk also raises awareness about IPR matters in China affecting EU SMEs, and helping them make informed IPR decisions for their business’ success.

Available to all EU SMEs and SMEs from COSME countries, the Helpdesk co-operates with European SME networks, chambers of commerce and industry associations to offer the following services free of charge:

• Helpdesk Enquiry Service: Individual SMEs and SME Intermediaries can submit IPR enquiries directly to the Helpdesk via phone, email or in person, getting access to a panel of experts to receive free and confidential first-line advice within 3 working days.
• Comprehensive library of IP Resources, including industry and business-focused guides and training materials that address IPR issues in China.
• IP trainings: the Helpdesk arranges training events and webinars in Europe and China on China IPR protection and enforcement, tailored to the needs of SMEs.