There is a common belief that whether you are planning to manufacture a product in China or are already doing so, you should have a well thought strategic plan for your IP (Intellectual Property) protection. No one wants their idea or technology stolen or pirated, especially from a Chinese company, right?
Well, this might be true for big players on the electronic market, however, if you are just starting out and have a keen desire to put your product out there, be prepared to change your mind, because your current protection strategy may turn out to be a waste of time and, more importantly, money.
China is well known for its huge demand for electronic goods. Factories are eager to produce and take out to the market the latest technologies and goods, in order to make them accessible to the people who cannot afford the “real” product. Shanzhai goods are all over electronic markets in Shenzhen, and they are also very welcomed. Even for you.
This enormous ecosystem works thanks to their open source philosophy. If a factory sees a good idea, they will share it with their partners in order to get the product out quickly and for the lowest price possible. The demand is there so things must be done fast.
Chinese engineers are a kind of Robin Hood for their people, they get the latest trends and make them affordable. Their cooperation network works as a net, where different manufacturers share information to create goods. Foreign companies engaging in business with Chinese companies must be aware that there is a high risk that their so precious technology or design ends up in the hands of a “hardware hacker”, who will reproduce the model and sell it for a cheaper value. However, this is a cultural fact and even experts in the field admit there’s very little you can do about it. For them, this is a form of collaboration and actually one of the reasons China became so successful.
So, how can you feel comfortable sharing your idea with factories? The smartest thing to do, by our experience, is to put all your energy into building a strong brand behind the product and have your selling strategy ready to go as soon as the product launches, or even better, before you even launch the product. Just be careful not to make it too soon and give room for copycats to start working and finish before you.
Another very smart way to protect your product is through software. You can hide the main functionalities of your electronic device in a Cloud or some kind of proprietary software that is only accessible to you and your team. Valuable software in some cases is more important than the hardware itself, and that can be protected by having your own platform or app and being able to manage everything privately and away from curious ways. bring value besides your hardware product and it will become irrelevant who copies it.
This is the most expensive and complicated way to protect an idea or product. If you feel you really must do it, go for it. But I wouldn’t recommend it. Because even if you have a patent, the cost of tracking down the hundreds of factories that will start copying your product will become overwhelming and a huge budget hole, not to mention the complete unfocus for you and your team.
There is always a chance you will find a copycat of your invention on the market, however, you will gain the best share by being the best one, the first one, the “original” one, the one that brings more value not only with the product but with the whole ecosystem your company will bring to your customers. Make sure you contact the right factories who are reliable and trustworthy. Make sure you don’t launch too soon, or too late. And above all, remember Chinese companies don’t copy products, they copy successes. Become successful with your product and accept that copies will surface and this is almost a kind of flattery for you and your team.
If you are interested in this subject, check out this episode by Wired Shenzhen: A New Breed of Intellectual Property (Part 3) | Future Cities | WIRED