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China’s
Software Industry to Grow 30% Annually
Speaking at the 2006 China Software Industry Development Forum,
a top official of China’s Ministry of Information Industry
said that China’s software and information services industry
is expected to increase 30% annually over the next five years.
Ding Wenwu, Deputy Director of the Electronic Information
Product Management Division of the Ministry, said the
total value of the sector would exceed RMB100 billion by the
year 2010, and the export value of Chinese software
would reach $12.5 billion.
Chinese Economy Roars Ahead
China’s economy accelerated at the fastest rate in
more than a decade in the second quarter of 2006, growing
by 11.3 percent year-on-year on the back of a swelling
trade surplus and rapid expansion in investment.
The economy is expected to slow in the second half of this
year, but not by much, with almost all forecasters predicting
growth of more than 10 percent for the whole of 2006.
The Asian Development Bank said it expected developing Asian
economies as a whole to grow by 7.5 percent this year,
partly because of a rebound in the global IT industry,
according to the bank’s Asia Economic Monitor report.
Protecting Your IP in China: Advice
from a Leading Law Firm
Deacons, a global law firm, recently issued a white paper
entitled, “Developing an Intellectual Property Protection
Strategy for Today’s China.” The white paper contains
valuable advice concerning strategies for IP enforcement in
China, including the following:
- Do not rely on legal tactics to enforce your IP
rights.
It is important to take a holistic approach to
enforcing IP rights, rather than trusting a particular legal
strategy that may not be effective in practice. The aims
should be to
- Promptly stop infringements
at a reasonable cost, and
- Ideally, simultaneously
discourage other potential infringers.
Rather than having to resort to legal enforcement action,
companies may try to handicap infringers through constant
innnovation, reputational marketing, providing exceptionally
high levels of service or using anti-counterfeiting markings
or packaging.
- Co-operate with authorities
It is important to build up a good relationship
with local enforcement agencies. In practice, this may mean
that it is necessary to take seriously official reports
of possible infringement, even if the economic consequences
of the infringement are small.
- Register your IP portfolio
Registered protection
should be obtained to make it easier to commence litigation
or enforcement actions, should the need arise. It is extremely
important, in particular, that protection be obtained for
Chinese language versions of foreign trade marks, to help
prevent piracy.
- Sign non-disclosure and non-compete agreements
with employees and business partners
Employees should be bound by comprehensive employment contracts
that include both non-disclosure and non-compete clauses.
Keep in mind that local legislation may require compensation
to be paid to the employee in order for such clauses to be
enforceable. Such clauses are, of course, no substitute for
ensuring that access to commercially sensitive information
is restricted to the smallest possible group of employees.
Business partners, as well, should be required to agree to
reasonable non-disclosure and non-compete contractual terms.
- Control use of IP by business partners
A foreign company should never permit a local partner to register
IP rights in its own name. It is also important to retain
full control of IP rights used by a joint venture company
and to prohibit registration of those rights in the name of
the joint venture.
- Keep in mind that IP protection in China is a
constantly moving target
In a period of such rapid evolution, nothing should
be taken for granted and all possible steps should be taken
to avoid loss of IP rights that may prejudice the future
operations of your company in China.
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