Protecting Your IP in China: Spreading The Love
It’s time to continue our series on protecting your IP in China.
In previous posts, I’ve mentioned that we use a three-pronged approach to protecting your IP when manufacturing in China. The first two prongs covered:
- Ensuring that your contracts are legally binding in Chinese courts.
- Building strong, long-term relationships.
Having these in place will go a long way to not only protecting your IP but will also help you have a positive experience working with Chinese manufacturers.
However, there is a third element that will add a further layer of protection to your IP. We call this third prong “Spreading the Love”.
We call it “spreading the love” because we are literally talking about taking the different components of your cherished product and spreading them amongst different manufacturers. For example, you may have a product made up of ten to twenty components. There’s a PC board, a lens power cable, the outer casing, the packaging, etc. “Spreading the love” means strategically dissecting your design into these separate components so that, on their own, it is not worth the time or effort for manufacturers to copy them because they have no idea what they are for. Only the information necessary for manufacturing that single component is handed to the factory and these factories may not even be in the same city or even the same province.
Once the components have all been manufactured separately from each, they are brought together at a final, trusted and fully vetted factory that then assembles your product. However, this factory specialises in assembly, not manufacturing so, while they can assemble the product, they are not set up to copy or reproduce your product. Often, they will not even know what your product does, because the only information they have is specific instructions on how one component connects with another. Because of this, it would not be worth their time and effort to attempt to reverse-engineer something that they still don’t fully understand.
A lot of the products and the designs that we deal with also have a software component to them. The software runs through the hardware and gives the product life. This software can be encrypted before it leaves your team so thatwhoever is installing the software can’t look into the software and see what it does.It simply becomes another piece that needs to be assembled.
So, by “spreading the love” between multiple manufacturers and then using a final trusted factory that specialises in assembly, you have added another powerful layer of protection and made the cost of copying your IP (time, effort, resources, money) too high.
But what if you are still nervous that your product is going to get knocked off? You’ve seen them in marketplaces all over the world, high-ticket items selling for incredibly cheap by some random street vendor. It happens, right? The Louis Vuitton bags, the Ray-Ban sunglasses. Shouldn’t you be worried about that?
Something we tell our clients half-jokingly, but also with some seriousness, is your goal should be to have, one day, someone trying to knock off your products. But why? This doesn’t sound right! Surely you don’t people trying to steal your IP. A perfect example is Dr Dre Beats headphones. You can find them in almost every market across Asia. It’s a problem. Absolutely. But, why is it a problem?
It’s only a problem because they’re selling hundreds of millions of dollars of merchandise and they have created something that millions of people want. People want to copy their product. It’s a problem because they have been successful. And you should want your product to be so successful that others will start to notice. It’s a sign that you are doing something right.
However, for now, this is not a problem that most small to medium-sized businesses need to worry about. And, if it ever does become a problem, it’s a ‘good’ problem to have because you will have become so successful that others want to do what you are doing. So, for now, we would recommend you protect your IP as much as you can by using our three-pronged approach. And then, focus on what you do best by creating and marketing an incredible product that the masses will love.