Intellectual property rights (IPR) is an increasingly important weapon in the international marketing wars. A growing number of Chinese companies have been aware of this principle as they seek to expand their businesses overseas.

East China's Zhejiang province houses the largest number of domestic small- and medium-sized enterprises that prove practicing IPR protection is an essential part of a business expansion strategy in foreign countries.

As one of the country's leading export-oriented textile manufacturing centers, Zhejiang province has seen many companies achieve fruitful sales revenue in the international trade market in recent years. Also fruitful is the large number of international trademarks registered by Zhejiang's enterprises.

Statistics from Zhejiang province's Administration for Industry and Commerce show that by the end of March, local companies registered 29,000 international trademarks covering more than 200 countries.

In 2004, the number of international trademarks registered by Zhejiang's companies was only 3,400.

"The fast growth of local companies' consciousness on IPR issues should be related to the huge challenges posed by foreign competitors at the beginning of our global business expansion works," said a spokesman from Shanshan Group, one of the largest textile manufacturers in Zhejiang province.

According to him, in the current international trade world, business competition is not only focusing on product quality and service. "New problems have appeared. We faced a growing number of foreign companies deliberately creating trademark disputes," he said.

According to the spokesman, in recent years, Chinese products have played a significant role in the international trade market. But lacking IPR awareness, many Chinese companies have found it difficult to confront the challenges posed by foreign competitors.

"Losing our trademark and brand in the overseas business world is equal to losing the market and the business opportunities," added the spokesman.

Take a recent example: Early this year, with a plan to expand its business into Canada, Zhejiang-based Kangnai (Group) Co Ltd, one of the leading shoemakers in China, was surprised to find that the company's trademark had been registered by a Canadian company.

At nearly the same time as Kangnai's case, two other Zhejiang province companies, Mengna Hosiery Co Ltd and Neoglory Jewelry Co, were told their trademarks had been registered in Canada by foreign investors.

Many Chinese companies cannot quickly respond to IPR challenges such as this due to a lack of professional trademark protection knowledge, said a lawyer from Beijing Wisway Lawfirm.

Thanks to the efforts of the Chinese government to strengthen cross-country cooperation on IPR protection in recent years, some domestic companies have already learned how to effectively deal with trademark infringement cases in overseas markets.

According to an official from Zhejiang Administration for Industry and Commerce, one of the most significant ways that Zhejiang-based companies actively protect their trademarks is to build partnerships with international anti-piracy organizations, such as the Madrid Trademark System.

"One of the obvious improvements in the country's IPR protection works is the increasing number of Chinese companies entered into the Madrid Trademark System for registering international trademarks," said the lawyer from Beijing Wisway.

So far, 8,607 Chinese companies take part in the Madrid Trademark System, obtaining protection for their trademarks and business rights. More than one-fourth of those enterprises are from Zhejiang province.

As more companies enter the anti-piracy system, the risk of trademark infringement cases around the world will decrease. This will have the added benefit of saving legal costs amid the current financial crisis.

Moreover, Wisway's lawyer said Chinese companies should understand that using effective tools to build good brand reputation in international trade will result in a strong and healthy public image, which will support the higher goals of a business's development in the long term.

(China Daily 05/04/2009 page11)