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Tuesday, September 7, 2010

Protecting IP in China

Good common sense article...

In China, Western Firms Keep Secrets Close - WSJ

What I have picked up after hearing so many horror stories of doing business in China:

1. Avoid joint ventures. You are training your competition for free. Not to mention mid night shifts that may create perfect counterfeits.

2. Have your own people in the factory monitoring production.

3. If possible, have the high tech part made in your own country. Japan does this and uses China for the assembly.

4. Use several different factories so no one factory has the information necessary to make your product. One firm makes parts in China at several factories, and then assembles them in Mexico.

5. If you have to joint venture, go for majority control.

6. Have the QA People report directly to your own people. QA is key.

7. Evaluate is the cost advantage of China that significant?

8. Don't share the crown jewels of your IP. Ask the question, if we lost this IP could we stay in business?

9. Do joint ventures with companies that are smaller.

10. If possible, do not do joint ventures with potential competitors.

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