The special guest in Episode 27 of the “Law & Business” podcast is John Eastwood, a partner at Eiger Law in Taipei. John and Anthony discuss the issues that many American businesses have when they start production of their products in the Greater China Market.
As a senior partner of Eiger’s Greater China Practice, John has headed up the firm’s intellectual-property and technology practice for the past several years, assisting clients with trademark, patent, copyright and trade-secret matters. In John’s role chairing the the European Chamber of Commerce Taiwan (ECCT) Intellectual Property Rights Committee for the past many years, he has worked closely with the European Commission, U.S. State Department, prominent academics and local government authorities on intellectual-property policy matters.
Our first topic is about having a sourcing agent, distributor, or other local agent in China file a trademark application for the American business. There are several pitfalls in having that local agent file a trademark application. Chances are the trademark application is badly drafted, only covering part of the product line or part of the scope of the planned-for business activities. John and his firm have seen filings that completely omitted key products and service activities because even a well-intentioned trading counterparty may not understand the business well. Local trading counterparts often don’t know how to respond to queries from the Taiwan IP Office (TIPO), meaning that they miss deadlines or
don’t know that some of these TIPO queries can be easily enough resolved.
This issue does not just happen in the the Greater China Market. For example, Anthony discusses a case in which his firm represented a Germany company, whose local agent filed trademark application in his own name and was required to be a party in a trademark cancellation proceeding, despite not having worked for the company for several years.
Another topic John and Anthony discussed was the failure to supervise the manufacturing company in the Greater China Market. There is some truth to the notion that when a foreign company makes goods in China, that business is basically training its own future competitors. John and Anthony discuss how a business owner is able to make sure those issues do not begin. After all, John’s view is his firm has found that the pool of counterfeit manufacturers includes formerly authorized manufacturers, whose exact skills in making authorized products in the past make them able to make dangerously close counterfeits of products in the future.
When a local manufacturing partner starts to realize that the American business is not paying attention, that’s when they start to evaluate their own rational self interest in the form of under-reporting, running extra lines of unauthorized product, inflating costs, or other such games. Typically, such situations continue onwards until finally a day of reckoning comes where the European brand owner terminates the local manufacturer, whereupon the local manufacturer speedily moves on to making straight-out counterfeits of the product. John gives some tips on how to keep that manufacturing company in the Greater China Market happy. Relationships still matter and having feet on the ground helps build those relationships.
This was another fun episode to record. It is chock full of excellent advice for any company trying to move outside of their home market and bring their manufacturing to the Greater China Market.