Corporate compliance series | Part 1: Intellectual property compliance
What do you think when you hear “corporate compliance”?
In China topic of corporate compliance remains a concern and a risk for many companies due to rapid change of policies, not always clear guidelines on the implementation process, and lack of measures and systems within the company to avoid potential risks.
Corporate compliance management for a company involves a wide range of aspects, which lead to a huge workload. Companies need to carry out various compliance management tasks one by one, in order to better ensure healthy, stable, and risk-free company development.
Topic and guest introduction
To provide more insights on this topic, we had a Q&A session with Ms. Li from Allbright and she kindly provided us with an overview and suggestions for companies on what to focus on and where to start to mitigate potential risks.
We went over several types of compliance: Compliance of intellectual property, compliance of storing personal data, labor and employment compliance, and anti-corruption and criminal and discussed what would be the start of implementation support system for them within the company.
Intellectual Property Compliance for Enterprises
SONG: Thank you for your time, Ms. Li, we are looking forward to learning more about corporate compliance from your side. We would like to start by asking what is the current situation with the enterprise intellectual property compliance?
Ms. Li: In recent years, the field of intellectual property has become a “delicious cake ” that entrepreneurs would like to have a bite from. The State Council has issued documents such as the “Thirteenth Five-Year Plan for the Protection and Application of Intellectual Property Rights” and “On Strengthening the Implementation of Innovation-Driven Development Strategies” to promote intellectual property rights.
However, some enterprises in China are still are not aware of the management and application of intellectual property rights.
Especially small and medium-sized enterprises, due to their own development conditions, technical strength, and intellectual property awareness restrictions, resulting in their low awareness of intellectual property protection and lack of due knowledge of the intellectual property rights of others.
In the implementation of commercial trade, especially in the process of foreign trade, it is easy to get involved in the whirlpool of intellectual property disputes, which makes enterprises in a passive and disadvantaged position in commercial activities.
SONG: Thank you for the overview, Ms. Li. What would you suggest for the companies to start with in case of implementing enterprise intellectual property compliance?
Ms. Li: I would suggest starting with the following 3 aspects:
1. Setting up an intellectual property management department
First of all, we need to make clear that not every company requires to have an intellectual property department. It would depend on the industry type and company size. Large-scale enterprises, high-tech companies, independent brands, export-oriented large and medium-sized companies it is necessary to set up an independent intellectual property management department with professional personnel to take care of the intellectual property management under the direct leadership of the decision-making level of the enterprise.
In case, if there are not enough resources within the organization to set up an independent intellectual property management department, there is still an option to outsource it to professional services. That way would allow the company to obtain complete intellectual property management services and save part of the money and energy needed to set up an internal department for that.
2. Establish a complete IP compliance management system
The company can develop an IP management system adapted to its development stage to improve management efficiency for that it should be combined with the following factors: company’s own organizational structure system, personnel allocation, division of responsibilities and workflow of enterprise intellectual property management, patent acquisition, maintenance, application, protection, resource management, contract and confidentiality management, R&D, production, procurement, manufacturing, sales risk management, assessment, and reward management, etc. to ensure the integrity, operability and tightness of the system.
3. Strengthening incentives under people management
Reward employees who create intellectual property achievements for the enterprise and make achievements in intellectual property protection and compliance management. Set up a dual reward mechanism of material and moral rewards to improve the quantity and quality of intellectual property of the enterprise. It would allow enhancing innovation ability and comprehensive competitiveness.
The quantity and quality of patent applications are included in the grading and promotion evaluation of technical personnel, so as to motivate professional and technical personnel to innovate independently and make continuous improvements in the course of their work, and gradually develop an awareness of intellectual property rights.
To summarize, for the effective functioning of the IP system in the organization deep integration with already existing systems within the organization is required. Introducing the IP management system into the activities of each department and creating the conditions for its effective functioning requires a very precise and careful design. In the development of management systems, by external independent third parties and law firm reviews and assessments are often can provide high reference value.
SONG: Thank you, Ms. Li, that was very insightful and I believe will help company leaders to design their first steps in implementing an IP management system or reaching out to partners who can support them with it.
In the next part, we will talk more about the compliance of storing personal data. If you have any questions feel free to reach out to us for more clarifications.
