Intentional sharing is fine; unintentional sharing isn’t. Who owns your product design? Who owns your software? Who owns your molds and tooling? Who owns your trademark when you license it out? If you don’t have the appropriate contract in place, the answer will be the Chinese company (not you), way more often than not. Too many times I have had to inform companies that they unknowingly relinquished ownership of XYZ to their Chinese counter-party and now we just need to try to try to limit that damage as much as possible.
We are constantly writing about the need to clarify “ownership” in China but always from the perspective of who we are: China lawyers. Today, while reading Seth Godin’s Blog, I had an aha moment regarding ownership in China. But let me digress just a bit.
I am a huge fan of Seth Godin, such that it would not be an overstatement to say he has influenced my law firm. I must have read his missive, Small is the New Big, at least twenty times. We even used to post it on our website, we thought it so important. And his overall theme of always always always (no matter what) being truthful to your clients, is yet another constant Godin theme our law firm strives to embody. I regularly read Godin’s excellent blog, but more for my own law firm business than for China Law Blog ideas.
But Godin’s post today, entitled, Joint Ownership, is just so China relevant and so clear I have to quote it:
Before you create intellectual property (a book, a song, a patent, the words on a website, a design) with someone else, agree in writing about who owns what, who can exploit it, what happens to the earnings, who can control its destiny.
This is sometimes an uncomfortable conversation to have, but it’s far worse to have it later, after the thing you’ve created has been shown to have value.
It’s almost impossible to efficiently split a soup dumpling after it’s been cooked…
As someone who spends a huge chunk of his time trying to split the IP soup dumpling after it has been cooked, I vehemently agree. As is true of so much in law, doing it right from inception costs around one tenth as much and is around ten times more likely to succeed than trying to fix things later.