I’ve heard some variant of this question a few times now. Typically, the company wants to manufacture the patented product overseas. Currently, China is a popular choice due to the technological capabilities of Chinese companies, yet affordable production costs. Unfortunately, these companies, as a whole, have developed a reputation among many U.S. inventors for continuing to sell products outside the contract. Inventors and U.S. companies are then stretching for some sort of protection in China.
The first thought seems to be that patent rights should protect the invention, because the invention is recognized as patentable. However, there is a wrinkle in this logic – the grant of a patent is a sovereign governmental act. Therefore, the grant of a patent in typically limited to the territory of the government that granted that patent. For example, a U.S. patent only protects against infringement in the U.S., whereas the rest of the world is fair game. (There are a few treaties that establish processes for achieving recognition of patentability across several countries, such as the European Union, but patent grant fees and maintenance fees are still paid for each individual country).
What ways can an inventor prevent copying by the foreign manufacturer?
One option is through contracts and trade secret protection. It is highly recommended to seek counsel when trying this method, because Chinese contracts require special formalities for enforceability. For example, most U.S. companies have never had to deal with a “chop” to make the contract binding. Additionally, trade secret protection requires measures to keep the information a secret. Policing these security measures in China can be very expensive from the U.S.
Another option, which requires a bit of foresight, is to file a patent application in China at the same time as the U.S. patent, or to file a Chinese patent application that claims priority to a U.S. patent application. There are strict time limits and formalities with this process and the inventor is limited to the U.S. and China. For a broader reach, the inventor could file a Patent Cooperation Treaty application within 12 months of the U.S. priority date in order to obtain 30 months (from the priority date) to decide on other countries in which to pursue patent protection.If you need help with your patents, trademarks, copyright, or trade secrets, please contact us.
Jeremy I. Maynard
Registered U.S. Patent Attorney
Troutman & Napier, PLLC
4740 Firebrook Blvd.
Lexington, KY 40513
Web: Troutman & Napier, PLLC
Originally Published at: Maynard.Law
Originally Published by: Maynard.Law