How to Secure Away IP infringement in supply chain management

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How to Secure Away IP infringement in supply chain management-Mobike Sued DiDi car lock for infringement: Qingju and Xiaolan Bike

According to the Beijing Intellectual Property Court, Mobike sued Qingju and Xiaolan bicycles operated on DiDI for infringing the invention patent of “a kind of lock” horseshoe lock. It is reported that the invention patent was applied in 2015 and officially authorized to be announced in 2018, with legal intellectual property rights. Mobike asked the two companies to stop manufacturing and using the infringing products and claimed compensation totaling 2 million yuan. After the Beijing Intellectual Property Court accepted the case, it sealed up and seized the shared bicycle of the accused infringement according to law. At present, the case is under further trial.

Though the west media love to publish stories deriding China’s intellectual property protection, the reality is it is still a long way for most Chinese companies/China government to strengthen the protection of IP. In this case, the fault lies with the supply chain management of the infringers/even their top management team. They did this for either had been cheated by their supplier or their dead eagerness for a shortcut to save R&D timing and cost with the desperate want to accomplish project development goal for market share fighting war with their competitors. They would usually make a wrong mistake once they were surged and driven under such a tight and high-pressure circumstance.

For the cost and time efficiency consideration, it is normal for a company to source/purchase/ produce their components from the competitor’s supplier. Especially the supplier/factory claiming they own the IP thus has a real right to authorize any party to produce but actually not.

The number of IP protection infringement has been accelerating in recent years. It was ascribed to two reasons. One, companies holding the IP try to expect protection. Two, the IP protection is systematic work, supply chain management (real team and people) is top critical to secure it normally is ignored or might have been considered important as it should be.

One factory is not able to produce every component itself. There are even hundreds of suppliers needed to collaborate together for a complete product. The following are necessary and helpful for a legal and safe purchasing from your supplier:

  1. Look for a qualified IP firm company/consultant to check documents and certificates before going on.
  2. Need an agent or your own team to be on-site to verify all the information. Merely relying on sign law agreements with one factory is not efficient. You need persons in place to monitor and to confirm. You need to make sure all steps and actions can really happen in a proper way.
  3. Provided any potential risk for IP infringement, find a solution on design improvement/amendment to make sure it could be able to get around the IP infringement. (NOTE: Critical to verify the legitimacy and effectiveness of such change with the IP service firm. )

The agreement signed with your factory/supplier can be a lawsuit proof when you were sued by others in the court. For a prudent company, it is always helpful to align together an experienced company dedicated to supplying chain management. I do not advertise my company for this article. I always have confidence we can help your purchase and business in China. If we can’t do any help with your business, we will endeavor to find anyone who can do any help.

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