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