Do not do it. Just don't.
Making these sorts of payments could cause you huge legal
problems, particularly if the media outlet is government owned.
Such payments may be illegal under Chinese law, U.S. law (the
Foreign Corrupt Practices Act), and European Union law.
Determining when such payments constitute illegal bribes is
usually very complicated and case specific. It's not worth the
risk.
3. Intellectual Property
China does a pretty good job of protecting trademarks, but the
only trademarks it protects are those that have been registered in
China or that constitute a "well-known" mark. If your client's
brand name is not as well-known in China as Coca-Cola (and it is
only within China that matters), you should just assume that
registering it in China is the only way for you to protect it.
Because China maintains a "first to file" trademark system, the
first to file for a trademark almost invariably becomes the owner
of that trademark. So you must register before anyone else.
As a rule, a company should register its brand as a trademark in
China before marketing it. If it markets the brand before
registering, the odds are good that someone else will register that
brand as its own. Many American companies have gone into China,
marketed their brand, and then had to forsake it because someone
else went ahead and registered it first. Trademark first, then
market.
You should also consider securing a .cn and/or a .com.cn domain
name.
And be aware that China, unlike many countries, provides for
portrait rights, which means using someone's portrait for profit
and without their consent is prohibited. So make sure you have a
written agreement.
4. Contracts
In the U.S., important provisions left out of a contract will
usually be implied by a court, whereas provisions left out of a
China contract are usually treated as though they do not exist.
Here's a great example: a U.S. company purchased and received a
large shipment of laptop cases from China, which featured handles
that nearly always broke when used to carry a laptop. The Chinese
manufacturer insisted it had provided exactly what had been
ordered, and if the U.S. company had really been concerned about
the handles not breaking, it would have purchased the Chinese
company's $4 bags -- not its $3 bags.
In other words, the U.S. company should have specified in its
contract that it would require the laptop bags be strong enough to
hold a laptop.
Clarity and specificity in China marketing agreements are
equally important. For instance, if you are paying to put your logo
on a stadium, specify that you want it to be a particular size, on
a particular wall, at a particular height, and there at particular
times. If you want exclusivity, specify exactly what you mean by
that.
Signing an "exclusive" contract with a stadium may mean
exclusivity for one wall, when you thought you were getting it for
the entire stadium. Figure nothing is implied.
Knowing how China handles contracts, intellectual property,
censorship and corruption is important for knowing how to market in
China.
Dan Harris is a founding member of Harris & Moure,
a boutique international law firm with lawyers in Seattle and in
Qingdao, China, and co-editor of the China Law Blog (www.chinalawblog.com).
Return to the Ad Age China
home page.
