In today's business environment where globalization and digitalization are deeply intertwined, intellectual property has become the core asset of enterprise competition. For foreign enterprises developing in China, the protection of intellectual property rights is not only about the survival of innovative results but also affects the market competitiveness and sustainable development capabilities of the enterprises. During the China Intellectual Property Innovation Summit, Chang Tsi’s partner Tracy Shen deeply analyzed the current situation, challenges, and response strategies of intellectual property protection for foreign enterprises in China by providing professional insights.

Current Status of Traditional IP Protection System

The traditional intellectual property protection system often adopts a "single-point defense" strategy, which has exposed many disadvantages in the current market environment. Many foreign enterprises were unable to fully assess intellectual property risks before entering the Chinese market and have not conducted a comprehensive intellectual property layout. Taking trademarks as an example, some companies have not registered various trademarks related to their own brand in time, resulting in others preemptively registering them, leading to a series of trademark disputes and consuming a lot of time and cost in rights protection.

Secondly, due to the lack of detection and early warning mechanisms, many foreign enterprises often fail to detect infringement acts in the market promptly. By the time they are discovered, market confusion has already been established. At the same time, many enterprises rely on post-infringement litigation for rights protection due to their single approach to prevention and control. Data shows that the proportion of trademark rejection review citing absolute reasons is fluctuating and rising, while the success rate of overcoming rejections to obtain registration continues to decline. The time to close civil cases involving foreign intellectual property rights at first instance is long. All these indicate that the traditional protection system is inefficient and costly, with insufficient long-term governance and deterrence.

The Rise of a Multidimensional Protection System: The Strategic Evolution of "Ecological Warfare"

Tracy Shen pointed out that with the changes in the business environment, foreign enterprises have higher demands for intellectual property protection, and the multidimensional protection system of "ecological warfare" has emerged in response with profound background.

From a business demand perspective, enterprises hope to transform intellectual property from a cost center to a revenue center, to realize the maximization of intellectual property value; when expanding business across multiple fields, they need comprehensive intellectual property protection; digital transformation forces enterprises to face new intellectual property issues, such as data protection, online intellectual property infringement, etc.; globalization expansion requires enterprises to establish a unified and effective intellectual property protection strategy in different countries and regions.

In terms of rights protection objectives, there is also a diversification. It is not only necessary to protect innovative results and maintain the core competitiveness of enterprises but also to protect brand image and consumer rights, prevent infringement acts, maintain market order, and maximize economic benefits.

The increasingly complex infringement situation is an important factor driving the development of the "ecological warfare" strategy. The forms of infringement are diverse, covering multiple fields such as live streaming platforms, cross-border e-commerce, domain names, websites, social media, digital cloud platforms, etc. Offline infringement has also become more covert, and the concealment and mobility of the production and sales stages bring great difficulties to enterprise rights protection.

The "ecological warfare" strategy mainly includes:

• Multidimensional affirmation of rights to build a moat: Enterprises need to comprehensively inventory their core competitiveness, and build a solid rights system to ensure effective protection of intellectual property in all dimensions such as trademarks, patents, copyrights, domain names, company names, etc.,
• All-around surveillance with a radar system: Using trademark monitoring, specific target monitoring, company name monitoring, infringement market monitoring, domain name monitoring, as well as customs recordation and training, to keep real-time tabs on market dynamics, promptly identify potential infringement risks, and achieve early detection and response.
• Synergistic linkage to construct a three-dimensional combat matrix: Employ a variety of means including civil litigation, non-litigation approaches, administrative channels, and criminal enforcement to form a comprehensive protection network. In litigation, precisely choose causes of action and jurisdiction courts, present reasonable litigation claims, and ensure enforcement; non-litigation approaches include sending attorney letters, platform complaints, negotiation, etc.; administrative channels such as trademark opposition, patent invalidation, etc.; criminal enforcement targeting the source and serious infringement acts. At the same time, focus on the combination of multiple rights, the integration of civil, administrative, and criminal actions, and the combination of non-litigation and litigation to build a unified rights protection system in the Greater China region.
• Joint efforts to amplify the impact of actions: Enterprises, law firms, and administrative and judicial institutions work together through marketing by the market department, media publicity, international conferences, industry forums, official media case reports, etc., to expand the influence of rights protection actions, deter potential infringers, enhance consumer confidence, and maintain a good corporate image.

Case Review:

Case 1: Ambiq - Combining Offense and Defense to Turn the Tide

Ambiq Micro, a Texas-based semiconductor company, had vulnerabilities in its intellectual property protection when entering the Chinese market. A Hong Kong-based company took the opportunity to preemptively register the "Ambitmicro" trademark and initiated rights protection actions. Ambiq Micro adopted the "ecological warfare" strategy, starting with a comprehensive investigation of the registrant, collecting evidence of its own prior rights, including company names, domain names, and trademark usage. Strategically, the company actively responded to attorney letters and administrative complaints, prepared a non-infringement defense, and participated in civil litigation defense, successfully winning the case with the prior use rights defense. Afterwards, it evaluated its own registration protection status, cleared the preemptively registered trademarks through invalidation actions and administrative litigation, secured the rights registration, and strengthened infringement monitoring, preemptive registration monitoring, and customs recordation. By utilizing typical case publicity to reinforce subsequent governance, Ambiq Micro ultimately turned the situation around and safeguarded its intellectual property rights.

Case 2: ITW DEVCON - Combination Punch Against Infringement

In 2020, ITW discovered a large amount of counterfeit DEVCON products in Sichuan and employed the "ecological warfare" strategy. In the civil aspect, they filed civil lawsuits against all infringers along the infringement chain; criminally, they facilitated the transfer of the case to the public security organs, resulting in the infringers being sentenced to fixed-term imprisonment along with fines and confiscation of illegal gains; administratively, they filed complaints with the Market Supervision Administration to identify the source of the infringing products. In addition, through the coverage by official media such as Leshan Politics and Law, the case's influence was expanded, enhancing the company's brand image and deterring potential infringement within the industry.

Promoting Intellectual Property Protection Upgrade with Ecological Thinking

The "ecological warfare" strategy emphasizes constructing a closed-loop system with ecological thinking, transforming legal rights into market combat capabilities. Unlike the passive "shield" role of traditional "single-point defense," "ecological warfare" is more like a sharp sword, proactively striking to achieve offensive and defensive transitions and strategic upgrades. Through multidimensional affirmation of rights, all-around surveillance, synergistic linkage, and joint efforts to amplify impact, enterprises can build competitive barriers, form institutional advantages, and create sustainable commercial value.

In the current competitive business environment, foreign enterprises in China face complex intellectual property challenges. The traditional "single-point defense" can no longer meet the development needs of enterprises, and the multidimensional protection system of "ecological warfare" provides a more comprehensive and efficient solution for foreign enterprises. By implementing this strategy, enterprises can not only effectively protect their intellectual property but also transform it into a market competitive advantage to achieve sustainable development. The promotion and application of this concept will also help to drive the development of the entire intellectual property protection industry and create a fairer and more orderly market environment.