Monday, January 29, 2007
So I will give you my non-official view on the HK Patent later.
I have been very busy in January. Not that I have finished my work now, I just do this during lunch for an reply to one of the reader. Will tell that works in January later.
A reader asked about what is the definition of Patents in Hong Kong. I am not adding value to cite you the law, as law are easily accessed via the web.
Hong Kong was under British ruling for more than 150 years, so law and regulation related to intellectual property protection pretty much follows British system and that has not been changed since China took over, excepted for some operational aspects.
Now the fine print: legally Hong Kong has an independent legal system, meaning patent needs registered in Hong Kong before it got protection. For example, if a patent is registered in China, it won't get automatic protection in Hong Kong.
Then what is the patents application system? There is no examination system but only a registration system. The Hong Kong Intellectual Property Department doesn't have a group of engineers and attorneys to examine patent applications. They rely on the respective 'central government' patent office(s), this is not a political correct statement but will give you the idea. Before 1997, legal owner of a patent can apply for registration in Hong Kong if the same have been granted in U.K. Since 1 July 1997, legal owner of a patent can apply for registration in Hong Kong if the same have been granted in China, U.K. OR the European Patent Office (designating U.K.).
I want to add that there are two types of patent in Hong Kong and there is a time schedule when to file registration.
More questions before you read this? Guess so, let me put some more Hong Kong patent related issues in future blog.
Tuesday, January 16, 2007
When I was searching for association in China, I was told that we could have other form of cooperation: I, as a business man, can look for investors from oversea. The guy was very proud of the files of patent applications, saying that some of those information represented potential for investment, and most important of all, he knew the invention before anyone else.
I have difficulty in dealing with a self appointed invention dealer and I couldn't trust the guy with confidential information, so I said goodbye as soon as I can.
Tuesday, January 9, 2007
In China, there are many ways to classify patents, one of the way is the nationality of patent applicant (owner). The first difference is the application fee. A local Chinese citizen or company enjoy a much lower application fee, while a foreign resident or company have to pay a higher fee for the patent application, both governmental fee and handling fee charged by patent attorney. There are two sides of a coin. For example, a customer had companies registered in Hong Kong and China, we recommend the customer to use the Hong Kong entity (regarded as a non-domestic under Patent system) as the applicant. Why pay more for a foreign status?
In the Chinese socity, government is like the grand parents, and the local government officials are the parents, so we have the old saying of "father-and-mother-officials", these officials are the fathers and mothers of the countrymen. The central government actually represent the heaven. So much so for the history, nowadays goverment officials still want to protect their people like parents taking care of children, in particular against some bad-faith foreign business man.
Now, a Chinese inventor, after all the hard work and went though the patent application process, eventually got something valuable, decided to sell the patent rights to an investor in Europe, say for USD200,000. The parent(s) may step in and say, look, the international market value of such piece of work should be USD500,000. The inventor may say "my price is the best I can bargain for." Well, in the transfer of patent right process, the government have the right to look at such transfer and make requistion, and in the end, the tax man will charge tax based on the USD500,000 value estamted.
However, a Hong Kong inventor may sell the patent to a US company and such transfer of right only calls for a simple registration. No question asked.
So pay more for the foreign status and less trouble when such transfer is required in the future.
There are tax implication even before such transfer, so talk to your accountant as well as the patent attorney.
Thursday, January 4, 2007
We need to find one or more Patent Attorneys in China as an association to get our business started.
Apart from the smaller firms, there are national firms. National firms may have one office in Beijing and branches in cities of their choice. A national firms with offices close to us are important. It is the Chinese traditions to deal with some one you met before, not some one you talked over the phone or communicated by email. By simple logic, a large firms have a more diverse field of expertise. Be it chemical, electronic, mechanical, and even legal. That may be useful for us, so that when we expand beyond the first customer. In house attorney at law would take up the legal fight for IP protection in China. That was not part of our initial reuirement for association but nice to know our potential partners have attorney at law when we need one.
Interesting enough, there were large and small firms who charge US rate, at the same time, there are large firms who charge less then US rate. So high price is not a guarantee of professional service.
We ended up using one national firm and one local firm in our first year of operation. However, we only gave one job to the local firm in Guangzhou and switched to another national firm, making two national firms as our partners.
Tuesday, January 2, 2007
A Hong Kong customer engaged us for about one year. The customer has Small and Medium Enterprise (SME) status in Hong Kong. The current definition is on the number of staff. A manufacturing company with less than 500 staff, or a non-manufacturing company with less than 50 staff is an SME. The Hong Kong SAR Government may grant a fund of HKD100,000 (about USD12,800) for the application of patent in countries of the SME's choice, when certain conditions are met.
The company runs his management, design and engineering office in Hong Kong. Manufacturing are being done in China with customers in US. They engaged us in doing trademark work and had some discussion on patent works. So we had an early start on their patent process and adviced them of this governmental funding scheme. We worked with the company for filling up the grant application about three months before the patent application was ready. The grant got approved in mid-2006.
The China Patent Application (Design Patent, equivalent to Utility Patent in US) was ready and waiting for the paper work for the grant, when the grant was approved, the Application was filed within the week. Then we did the translation back to English and get ready to file the US Patent Application after this New Year holiday. This patent would claim the China Patent filing date as priority and so no time was lost. Later on, we will file for Hong Kong Standard Patent.
It is so nice that 90% of all these worked are paid out of the HKD100,000 grant. So a Hong Kong company is on his way of protecting his intellectual rights of products he sells in US.
Monday, January 1, 2007
Those we called foreign firms, they have local staff who can handle both English and Chinese work, no problem in working with us for any patent applications coming from our US customers. They have engineers from different fields, including biochemical, electronic, mechanical... So we would be very comfortable working with these people. What is the catch? We would price ourself out of the market. These firms were charging US rate, that us USD5,000 and up for standard process utility patent.
Then there were a large number of local and national firms. Local firms with one office in their city of operation, among other things, are likely to be small firms with one or two experience attorneys. Again, some of these firms were a special products in China.
Years before, China have a very large government structure in the local levels that duplicated Central Government. That means as there was a Patent Office in the Central Government level, they had a similar offices in province, county and city levels. For some of these officies, they were actually an office with many plates, that is, one small office taking care of a lot of different areas of trade, commerce, manufacturing, etc. For some of the local governments that really need to govern local activities that were related to intellectual property protection, then a number of local government officials were handling patents and related matters. Then cames 1990s, to downsize government and drive privatization, some of these local goverment officials were asked to leave the government and set up their own Patent Attorney business. They had their local government and business connection. This was good for them to start off their business.
However, some of the local and national firms were charging US rate. With that knowledge we would wish them luck and said goodbye.
The party was hosted in the roof top car park of Ocean Center. Actually it was on the fourth floor, so we were surrounded by buildings nearby.
There were about 8000 people there, a lot of people from nearby hotel were watching too, from the roof top, and of course, there were people without ticket, they may be in the Star Ferry, they may be floating on a boat around Ocean Park, etc. Of course, we have TV Pearl live broadcasting starting at 2230, and when the web is running, web casting as well.
There were quite some popular Hong Kong singers performing, and AK from UK. Great fun.