From the China Desk of JMB: Celebrating The Year of the Rooster (Every Crowd Cloud has a Silver Lining)

The new Chinese year is the Year of the Rooster. As we move away from the western new year celebrations, I would like to congratulate the Chinese entrepreneur, wherever he or she may be. It’s easy to tell when the Chinese entrepreneur is doing something right –  all you need to do is to look at the faces of their counterparts in the West; they’re green with envy. I have no other explanation than that of pure envy for the myriad entrepreneurs or would-be entrepreneurs in the West and their cries of ‘foul’ in response to the Chinese copying of products from public postings on the internet.

Let there be no misunderstanding. I’m not condoning the infringement of IP rights. If patents, trademarks or copyrights are infringed, I am absolutely in favor of enforcing those rights to the hilt. What I’m against is the assertion of some supposed rights of an entrepreneur to a product posted on a crowdfunding site when, in fact, the entrepreneur has not bothered to register any rights. We hear about these supposed rights when a Chinese company copies the idea and, because they’re so quick to produce and bring to market, and because they recognize the opportunity in innovative ideas that have been laid open to the public, they end up marketing the particular product long before the original entrepreneur is able to make any sales and have any real market presence.

The key expressions above are:

  • ‘supposed rights’, because none have been obtained by the entrepreneur, at least, not when making the posting on the crowdfunding site;
  • ‘innovative ideas that have been laid open to the public’, which is an exact description of what the entrepreneur has done by displaying the product on a public site on the internet; and
  • ‘real market presence’, because, unlike the Chinese copycat, the entrepreneur does not have, as yet, any product for sale.

So the only ‘sin’ that been committed by the copier is that of knowing a good unprotected idea when he sees it, and bringing it to market quickly. And some entrepreneurs can’t handle that – they wish they had the ingenuity, the ability to identify an opportunity, and to act on it – possessed by their Chinese counterparts.

I’m an entrepreneur. What should I do?

So, as an entrepreneur with an original idea, what should you do if you want to raise money on a crowdfunding site, and you (now) know that it’s not a smart idea to be unprotected and that you stand a good chance of being copied?

It’s actually quite simple. Register your patent, design and trademark rights, or at least start the process before going public. Discuss your plans with a Patent Attorney, particularly one who is knowledgeable about and well-connected in the Chinese market, and seek advice as to what to do. You won’t be able to stop the copying initially, but once you have the rights registered, you’ll be able to assert your rights.

Every Crowd Cloud has a Silver Lining

As a last thought, consider this scenario: a Chinese company has copied your idea, sending it viral over the internet. As a result, 1 billion people now know about your great invention without your  having lifted a finger. Imagine the possibilities if you have registered IP rights, and you now start enforcing these exclusive rights in a market which knows all about your product.

Now, isn’t that a somewhat silver lining to this particular Crowd Cloud?

Happy Chinese New year to all! Be in touch!