Latest / Pitch to Product / What U.S. Founders Must Know Before Manufacturing Overseas

Transcript

What U.S. Founders Must Know Before Manufacturing Overseas · Pitch to Product

• Jennifer Che: This happens more often than you'd you'd wish or hope, but I've definitely spoke spoken to a couple ex I know of real examples where contracts were not well, you know, laid out, or maybe there wasn't even a real contract, or the US side was not IP savvy. And what happened was the manufacturer filed for a patent application on the invention and then listed themselves. And then the US said had no clue because it's in Chinese. They can't see it. They can't read it. They can't search for it. And then somewhere down the road, because patent applications are not published for a while, then down the road it like publishes and they're like, hold on, what is this? Jack & Jennifer Podcast: Welcome back to another episode of the Pitch to Product Podcast. Today I am joined by Jennifer Che, President and Managing Director of Eagle IP and a US patent attorney. I'm your host, Jack Dalton, Business Development Manager at 52 Launch. Today we are going to be discussing some cross-border intellectual property topics. Jennifer, this is this is a topic that I am not very well informed on. So I may ask some questions that are kind of out there. I will be learning a lot as we go. And hopefully everybody listening will be learning a lot as well. yeah, if you could introduce yourself, give a little background on how you ended up as president and managing director of an IP law firm, that'd be great. Jennifer Che: Great. Thank you, Jack, so much for this really great opportunity to join you. It just so happens I'm on the East Coast right now, so we're able to do this much more easily. I am based in Hong Kong. So yeah, my name's Jennifer Che. I am managing director of Eagle IP, which is a boutique patent firm based in Hong Kong and Shenzhen, China. So we're Asia based, although maybe listening from to my accent new might think I'm maybe from here. So I am I'm American actually. And my brief background is that I was born and raised in actually Toledo, Ohio, which is where I am right now. And yeah, I went to school in Boston and went studied at MIT, which is really close by, and then after chemistry degree actually, and then afterwards worked as a scientist for about six years before switching into patent law. So I've been I did patent law at various companies actually in the United States, in Boston actually, all of them in Boston. For about 15 or so years before in 2017, I moved to Hong Kong. And that's where I joined Eagle IP, which is a boutique patent firm. And there, that's where I sort of got more involved in understanding the China side of things. So Eagle IP actually does is based in you know mainland China and Hong Kong. So we've got two offices, and actually we help a lot of US clients enter China. So, you know, whether it be Hong Kong or mainland, you know, we help them kind of build their China portfolios. help them kind of navigate how to enter and get patent protection or IP protection in China and Hong Kong. So maybe in a nutshell that's kind of and I've been doing that now for eight plus years. So I travel back and forth a lot between the US and China. And that's why, you know, kind of using this as a way to get to know more people in the States who might be interested in IP protection in China, which is becoming more and more important, I think, in in everyone's radar. So I'll start there. Is that good? Jack & Jennifer Podcast: Yeah, perfect. it has definitely been more on our Radart 52 launch in the last year or so. And so I'm excited to learn more about this. this is probably probably an episode that actually I will encourage most of our team to watch. So a little bit unique there, but we're gonna Jennifer Che: Ha ha. Jack & Jennifer Podcast: get into some more complex topics than we normally cover on the IP side of things on this channel. So I'm excited for that. Jennifer Che: Sure. Okay. Jack & Jennifer Podcast: But we can start kind of on a higher level note here with something that is directly relevant to the majority of our audience, which is you know, let's start with a US entrepreneur who has Jennifer Che: Yes. Mm-hmm. Jack & Jennifer Podcast: developed a physical product, filed a, let's say, a utility patent in the United States, and think there is a reasonable chance that they'll eventually sell internationally. At what point does international strategy enter the conversation? And importantly, Jennifer Che: Thank you. Jack & Jennifer Podcast: What decisions become difficult or impossible to undo if you wait too long? Jennifer Che: Excellent question. And I think my short answer is the international aspects should be at the decision at at the conversation right at the beginning, actually, right? Because it really guides your entire patent filing strategy. So of course, maybe not everyone gets to that, and some of you might be at different stages. That's okay. I would say that there are certain aspects that could, you know, destroy, for example, your ability to patent globally. And some of these could be, let's say, public disclosure, right? We know public disclosure is a problem even in the states. But the US has a nice grace period for especially for inventors' own disclosures, right? And sometimes that can save you in the US, but in other countries like China, it won't save you. So then that could just destroy your chances of ever getting patent protection on that disclosure that you made. Now, of course, you can design around it and try to get something similar, but if you don't want to play that game and you'd rather just protect what you're disclosing, you should think about that strategy before disclosure. So that's the first thing. The second, I would say that let's say you did file in the US. Now there are Points along the patent filing strategy, you know, timeline where you can have the option of let's say entering into you know global protection. One is at the 12-month mark, where at that point you can claim priority to what you originally filed, and then that you can go straight into China at that point, whether it be designs, utility models, or invention patents. you can also file a PCT, which is a global application, and that's like a placeholder. So once you file that PCT, it allows you kind of you get kind of a delay. You don't have to make the decision about global. like you would if you went kind of that direct twelve month filing rule. You can actually go through the PCT, which is a placeholder, gives you basically a total of thirty months from your original filing to kind of make that global decision. And at that point then you let's say enter China or enter other countries. So those are kind of some time points to be aware of. Jack & Jennifer Podcast: Yeah, I think that's kind of that's a that's a good coverage. We actually covered PCT quite a bit in an episode with Robert McConnell. So if you are interested in learning more Jennifer Che: perfect. Great. Jack & Jennifer Podcast: about that, you can go check that out. We won't spend too much time Jennifer Che: Excellent. Jack & Jennifer Podcast: talking about the patent cooperation treaty. That is patent cooperation treaty, correct? Yeah, I get that right. Jennifer Che: Thank you. Yes. Yes. Yes. Excellent. Rob did a good job. Jack & Jennifer Podcast: perfect. So From here, we'll move into something that we think a lot about at 52 launch because most of our clients from day one are pretty certain that the United States is the primary market that they'd like to tackle, at very least, the initial market they'd like to tackle. And usually we're talking a much smaller subsection of the United States. But in their minds, you know, they're not thinking about expansion to all of North America or to Europe or to Asia Jennifer Che: Mm-hmm. Jack & Jennifer Podcast: until. They've proven to themselves that this thing can actually sell, whatever the idea may be. So Jennifer Che: Sure. Right. Jack & Jennifer Podcast: suppose I manufacture my entire product in China, but I'm only selling it in the United States or in North America. Should China be one of the first jurisdictions that I file in? Even if, say, I think Jennifer Che: Mm-hmm. Jack & Jennifer Podcast: Europe is going to be my second major market? Jennifer Che: Hmm. Jack & Jennifer Podcast: How would you Jennifer Che: Okay. Jack & Jennifer Podcast: think about that? And does it t depend on the product type? Does it depend on if there's any development being done in China? Maybe we can leave that until later in the conversation. But Jennifer Che: Sure. Sure. We can leave that till later. Jack & Jennifer Podcast: yeah. Jennifer Che: X okay, yeah, really, really good point, right? And of course, like you said, it's manufactured in China, right? So that means it can be or there is expertise in this geographical geographical region for manufacturing in general, right? And manufacturing maybe your product. They're good at that, right? Just that region. So essentially, you know, getting a patent would allow you to stop others from making, using, or selling, making being the key in this case, right? So let's say you are manufacturing in China and you're only selling in the United States. If you don't get a patent in China, of course that means somebody else can manufacture it, right? And if you only have a patent in the US or you're trying to get one in Europe, they could make it and sell it in China, right? For example, to that one billion dollar person market. They can make it and sell it to any other country where you haven't filed, right? So you've got that risk, I think, for a up from a manufacturing perspective. It is that if you really want to stop others from manufacturing in the same places, you know, where you're manufacturing it, that would be like a pretty obvious way to stop others, I would think that at a at a start. So even if China is not a market, if you can make it there and you think that's where everyone's gonna make it, then you really would wanna stop others, I think, from also making it. There's also the fact that you're kind of disclosing this information to manufacturers in China. And if anything goes wrong, right, of course you hope things go well and that it's a great fruitful relationship. But if anything goes wrong, then it's leaked in that area. And then all the more easily it is for somebody, a bad rogue worker or whatever, just an accident from knowing about how to make your product, right? So I would say that it is, you know, if you can afford it to do some sort of initial protection, you might want to be able to do that. But of course you can wait. If you have budget issues, you can use that PCT. and wait and file a little later. But keep in mind that if you're manufacturing now and you don't have an issued granted patent, then you have nothing to enforce, right? So there are mechanisms we can talk about later, like utility model design patents that are quickies, faster, and easily to inf easier to enforce because it's easy to tell if they're copying, essentially. Less technical for anyone to figure out. Jack & Jennifer Podcast: Right. Well, I actually think this is a good place to start going over some of those things. kind of a broad point I'd like to make for the layman listening to this this podcast episode. Intellectual property law and rules is different in different jurisdictions. So that's not necessarily a super obvious point, I think, that Jennifer Che: Yes. Jack & Jennifer Podcast: The way intellectual property is is ruled and governed in the United States is not how they do it in Europe, is not how they do it in China. So it'd be great to get kind of a a snapshot of those main differences and what the IP landscape in China looks like, particularly around patents. Jennifer Che: Great. That's a good that's a very good question. So I will say that the patent law in China is very young. It was literally established in 1984. So many of us may have, some of us may have been alive in a time when China had zero patent protection. And many Jack & Jennifer Podcast: Wow. Jennifer Che: people just imagine the mindset of a people group that recently got patent law sort of introduced into their system. So you've got kind of this. difference in culture, first of all, just as a basic, you know, kind of background. Secondly, you know, the patent law has been developing and since it's only since nineteen eighty four, you know, its development has been in that way, you know, s you know, developing. So it started as a very simple patent law and I would say in the last ten, twenty years, you know, they've made advances on it. Having said that, the China patent law generally is much narrower in the scope of protection you can even get compared to the US, I will say, by and large. so in that sense, it's you could say that it's not patentee friendly because the patentee friendly jurisdictions would have like nice broad coverage. In China it is quite narrow. You can really only get, let's say, protection on c inventions that you've proven can work. Maybe you've built a model or you have some proof. If it's just based on a concept and you're trying to grab too much, they don't like that. So in that sense, you know, you kind of have to be a little bit you're that might change your strategy on How you approach patenting in China. Now, I mean, the patents are enforceable, but you just might not get as broad of a scope. So that is something that's quite different between China and the US at least. So so just cause you got a certain patent granted in the US is definitely not you know, a guarantee that you will get the same scope of protection in China. More often than not, it is much narrower. So kinda you wanna go into that, you know. Maybe go into your whole strategy, kind of assuming that and planning that so that you can think about design arounds, think about obvious variants, how are you gonna protect it if you haven't proven it? Can you try to prove it early so that you can try to file for that in China as well? Because China won't accept it without the proof, whereas US might give it to you. So it's a balance of your resources, but if you know going in, how are you gonna decide what experiments to run, right? you might instead of really honing in on the problem you're trying to solve, just do a couple extra experiments on the adjacent design around sides so that when you file in China, you're more likely to get that broader protection. Jack & Jennifer Podcast: Interesting. Yeah, wow. That if you have that foresight, that could certainly be worth a whole lot. So that's that's quite interesting. And then we've covered Jennifer Che: Yep. Yeah. Preventing design arounds. Yeah. Jack & Jennifer Podcast: right, right. So we've covered the design patent, utility patent. we haven't touched on plant patents on this podcast because we don't have a lot of clients developing consumer product plants, but Jennifer Che: That's all right. Jack & Jennifer Podcast: Is the you know the are the types of patents copied over in China? Jennifer Che: So you're you're saying you have or have not discussed the different patent types on this podcast. Okay. Jack & Jennifer Podcast: We have we have discussed them. Jennifer Che: Okay, great, great, great, great. in the US, you mean, is that right? Or in general. I get okay. Jack & Jennifer Podcast: In the US. Yeah. Jennifer Che: So so you guys kind of have a good sense of those. yes, China Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: has design patents and now at the as of this point now they're getting more similar. They actually updated the design patent law just a couple years ago. But now I would say it's pretty similar, you know, in that sense. So there's design patents and there's utility patents. One difference I would say is that there's what's called the utility model. So this type of patent does exist in let's say Germany and maybe France and some other countries. And it's they might call them petty patents in some of these other jurisdictions, but essentially they have a shorter patent term and they're easier to get. The standard for patentability is lower and they're often they're much faster. Sometimes they're not substantively examined or if they are, they're examined, you know, not as rigorously. So it's interesting because on the one hand you might be like, it's a not as good patent, right? Because it's got a shorter patent term. It's only like 10 years, right? Versus 20. But at the same time, if the standard for patentability is lower, that means it's easier to get the patent. You don't have to be as inventive, as innovative. And not only that, it's harder to knock down. Because if it doesn't have to be that inventive, then somebody can't come by and say, your patent's not valid, because it's actually not inventive. Or I found some prior art that's really close. For a normal invention patent, no, then you're not that super inventive. You might lose your patent, right? But if you're like just a utility model, you only have to be slightly more inventive than your cousin. So in that sense, as long as you're slightly Jack & Jennifer Podcast: Interesting. Jennifer Che: more inventive, you can actually get a granted patent, right? So in that sense, they're great and they're fast and they're cheaper and they grant fast. So let's say you have a strategy where you're like, I'm manufacturing in China. I don't I'm not gonna go into the market till like three years later. So I don't want to spend the money prosecuting an invention patent, getting it rejected, getting it back and forth. That'll take two, three years. Jack & Jennifer Podcast: Yeah. Jennifer Che: Let me get the in utility model. It's only it'll only take eight months, right? Or so you can even fast track sometimes. I need this granted immediately, and it's gonna be narrow, but it's gonna be fast, and the inventive you know, standard isn't that high, so it's hard to knock down. I'm gonna sue the sucker out of those people who are already starting to copy my product, right? And then you just start with that, could you get the patent fast, right? So it's like a quick one. And then later you could have a strategy where you then go after the invention patent. And then, you know, there's a few ways to do it. There's a mechanism where you take the same invention and you file the invention Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: and then if it grants, since it's longer, then the other one kind of dies automatically. There's that mechanism. Or you can file another one that has slightly different claims and then that one can just grant separately because they're not identical. So this is a strategy that you would decide later, like how am I gonna deal with the utility model plus my invention patent strategy? Should they be the same? Should they be different? Do I want one to extinguish and or do I want them both? You know, and these are all questions we we can ask and talk to the inventor about. Jack & Jennifer Podcast: Right. Yeah, that that makes a whole lot of sense. I'm almost a little bit surprised that we don't have that in the US. It seems like something a plenty of people would benefit from. I'm curious Jennifer Che: True. Jack & Jennifer Podcast: if you have any kind of really good examples of products or systems or anything that are are particularly good candidates for Jennifer Che: Mm-hmm. Jack & Jennifer Podcast: a utility model compared to an invention pattern. Jennifer Che: Well, there are limitations on what kinds of inventions can be protected by a utility model. Essentially s it has to be something that has a physical shape or structure. So you cannot do methods, processes for doing something, steps, that kind of thing. Even small molecules don't don't fall under that. So you can't get molecule compositions of matters. It really is something physical. So like a medical device, right? A a a tip, like a little arrow or like a tab or a little Anything that has physical structure, that would be a really good candidate. And since you guys do manufacturing, I'm assuming that's like perfect for you guys. You're not doing these abstract, you know. Jack & Jennifer Podcast: Right. So all physical par products. Jennifer Che: Right, right. So it's the physical product. Of course, not the process for making the product, because that would be a process Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: claim. So it really has to be like a composition like that product claim. So product claims on physical things that you are manufacturing will be the perfect, perfect candidate, I would say. Jack & Jennifer Podcast: Yeah. Cool. Yeah, that that was all pretty much brand new information to me. So very interesting. Jennifer Che: Ha ha. Jack & Jennifer Podcast: glad I'm now aware of that. I'm gonna switch gears here for a second and move on to a topic that I believe you've written about relatively extensively, which is Jennifer Che: Sure. Jack & Jennifer Podcast: the difference in how the United States and China, I guess. Jennifer Che: Mm-hmm. Jack & Jennifer Podcast: Sorry, talk about yes, Jennifer Che: Is it inventorship and ownership or is Jack & Jennifer Podcast: inventorship and ownership. Right. So to kind of frame this in the context of of what our clients would be thinking about, if we bring a product to a factory and one of their engineers says, this mechanism isn't going to be manufacturable in the way that you want it to. If we w redesign these three components in this way, it'll work. You know, at what point do they go from being a vendor to an inventor. Jennifer Che: That's an excellent question. And first, I will say that inventorship, maybe just as a little bit of background, because Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: for every invention there's an owner, right? And that is really where the money is, and that's the most important part. So even that, the laws in China and US are different. So I'll give a brief primer on that. In the US, the inventor is the owner by default. And then after that, If you work at a company, for example, you might have an employment agreement where you then assign it to your company because that's part of what you're supposed to do. And then eventually the company owns it, right? So that's great. And then that's generally how things work. In China, of course, if you're just a lone person and you invent something, you are also the owner. You know, the inventor is the owner. But China has laws that say by law, and this is basically not an employment agreement, but by law, if you work for a company or you work for a university or something and you're using their resources to invent. You never own the invention. It just automatically pops up to the employer. Okay. So just first keep that Jack & Jennifer Podcast: Interesting. Jennifer Che: in mind, okay? That ownership, the way it flows is different. So that could get hairy and messy when people start to work together, right? So let's talk about that. So that's the that's how the ownership bit works. But even who's the inventor, which is what you're asking about, is a second question about like, well, what's the standard? How much do you have to contribute? And even that is a little bit different. And I will say that in the US, because of the history of how it used to be first inventor to file, I won't go into that, but Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: because of the US history on inventorship, there's a lot of court cases and a lot of litigation on inventorship law. So the US is quite clear through all these cases how you determine there's standards, there's different cases you can look at, and you kind of know who's the inventor. It's very well established law. China, first of all, court cases are not public. Most of them are not. Some of them are, but most are not. Second, it's a civil, you know, it's not a c a case law-based type of law, you know. It's it's not common law, like the way the US is, where court cases define the law. China's a civil system. The law is the law, is the law. And what's written in the law is basically can be reinterpreted each time by the judge. The judge's decisions don't impact the law. They can be persuasive, but they legally don't impact. So that's the second bit, okay? So thirdly, I will say there are cases that are influential. So The third thing is that for inventorship, for a long time we didn't know what the standard was because we only had the law, and it just had this very vague language that said, like, you know, I forgot, you know, as long as the invention was completed in China, you know, like like what does completed mean? What does invent mean, you know? So there was an interesting case that came out recently, and it was actually a life science case, but it is very interesting because what happened was that the patentee actually tried to Because the in there were is a joint invention between like different parties and that was getting hairy. So they wanted to kind of cut out the guy that wasn't at the company. So they like modified the claims so that he was excluded. Okay. But he came up with the original idea and they kind of invent they they improved on top of it. They of course put in some efforts. And eventually there was this joint invention where he came up with the core idea and they like added to it. And then they removed the claims where he for the core idea and only kept the claims to kind of the improvements. And then that got litigated to court. And then the court, interestingly, had a different standard from the US. So I would say in the US, it's claim-by-claim analysis. The claim defines who's the inventor. So if you remove some claims, then that whole patent belongs to only the remaining inventors. And every time in the US, before the patent grants, you do you redo an inventorship analysis to say, well, who's left? Who invented these five claims that actually are getting granted? Right. So that's kind of how you do it. But in China, That was not the case because it's more of this collective idea of like we are in this together, we all did this together. You can't just remove the guy who thought of the original groundbreaking fundamental idea. And from a concept of like fairness, they're just like, that's just wrong. So they actually, you know, weren't able to kind of successfully remove the inventor. And that's just an interesting case that tells you that the standards are a little bit different. So having said all that, the Key thing to think about when you're kind of collaborating, and I think your example was great because it's like, what happens if I'm collaborating with my manufacturer? And then they start to give me ideas, right? And Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: then maybe it's the foundational idea of our improved process. Maybe our final product is different as a result of the suggestions made by the engineer at our manufacturing site. Well, what does that mean? Well, under probably both patent laws in both US and China, I think there is a point where the contribution is crucial, right, to the final product. And then it really is that person probably should be named an inventor. So at that point, then the second question would be, well then what happens to the ownership, right? Inventorship is one thing, ownership is a second. If you have good contracts in place, right, with your manufacturers, then you have a contract that says no matter what you invent, it belongs to me. And maybe you have to pay them more for that, right? And maybe you're willing, maybe you're not willing, and that's up to you to decide. But you want to go into that manufacturing agreement knowing what you both agree on the outcome, right? And then knowing that these employees work for that company, it's gonna be the company that you're, you know, negotiating with, not that inventor. Because that inventor, if he works for the company and he's using the resources of the company, his invention never Jack & Jennifer Podcast: Right. Jennifer Che: belongs to him. And it just goes right up to the company, right? So you need to negotiate with the company. And yeah, so same thing with the professor, if there's a university, right? Just figure out who their employer is, what resources they're using. It gets messy, right? What if that professor is secretly doing it in his academic lab and using their something scopes and then, I don't know, a and he also works for that university. All of a sudden he cannot contract and give it to you. It has to be his university, because by law he doesn't even own the invention. So these are like crazy things that you get. In China especially 'cause it's got that funny law about employee employer owned inventions that you gotta navigate around. Jack & Jennifer Podcast: Right, right. That was a great answer. You tied it back to our last question and touched on what my next question was going to be. Jennifer Che: Which I already let the cat out of the bag. We'll just have to skip that one. Jack & Jennifer Podcast: well, I was going to ask, you know, what does an ideal contract look like on the IP side, whether you're working with somebody like 52 launch or with a China-based manufacturer? Do they look similar? can you even kind of have the same mechanisms for IP and ownership assignment? You just kind of touched on the fact that you're not you're generally not dealing with individuals in China if they're employed by a corporation that you're also working with. So yeah, Jennifer Che: Yeah. Jack & Jennifer Podcast: I guess yeah, a little bit more specific on that, I guess. Jennifer Che: Sure. I guess I'm not super familiar with how fifty-two, you know, launch you know is involved in this. So maybe for now I will just say an ideal type of agreement, of course, Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: is I'll assume that you if you're a comp I'll assume that the the person on the US side is a company, because of course it's easier versus an individual, right? So it's a company, it's gonna be the one that owns the IP. So I think importantly you wanna think about which entity owns the IP. And sometimes for tax reasons, people might decide that that entity is not in the US. They might want to put that entity in, you know, like a some kind of tax-friendly jurisdiction, right? So that is something maybe a startup hasn't gotten to that point yet, but you know, people who are Jack & Jennifer Podcast: Yeah, maybe not. Jennifer Che: moving around big amounts of money and IP that's worth lots of money, those taxes, you know, you might want to, you know, store it. So that's a whole nother area that I'm not gonna I'm not a tax expert, but there's this whole IP tax is like its own. its own area. So first of all, you want to know which entity is owning the IP because that's going to be the one that's going to be, you know, basically making sure that is that the same entity that's conducting the RD, right? If not, then you got to figure some stuff out on that end. But let's assume it's easy because I think maybe most of your clients, the you know, 52 launch companies are just single entities that both own the IP and are the ones doing the RD, right? So assuming that's the same entity, then that entity is going to be the one that's contracting with let's say a manufacturer in China, right? And you want to check and make sure that those employees, of course, are are are free and clear, that they're able to do this kind of work and that their IP, I mean if you really want to do diligence, you want to kind of just understand whether they're employed, right? Versus contractors or whatnot. Like if they're employees, Jack & Jennifer Podcast: Right. Jennifer Che: if they are using the resources of the company and not using some academic lab, right? Just kind of tighten it up. And make sure that the research is arising under the right terms and conditions. And then, you know, and if and if there's weird things to clean up, like they are doing a lab with the that's fine. Then go to the university, make sure you've got that part kind of covered, right? And then once you feel you you feel like you've got all the IP kind of under control, then you just have to make sure what the ownership terms are, right? And in that sense, you just want to be clear, you know, anything invented by you guys, you know, and kind of clearly lay out what types of arising IP. is owned by you. Ideally, of course you wanna own it all. Sometimes they may or may not agree. Sometimes if it gets into hairy things like human patient data or some confidential stuff that maybe even China doesn't want to then you're gonna have to deal with that. But but let's not go there for now. Let's just say in general, I think it is a very doable agreement, you know. I think manuf Definitely contract research companies are not in the game of owning IP usually. They would prefer to get paid and then give you the IP. That's their business model. So ideally that would be you would be able to negotiate that. maybe I'll just stop there before I go into kind of horror stories. I mean that could happen, but or I can tell you the horror story. Jack & Jennifer Podcast: Well I'd I'd I'd love to hear a horror story. Jennifer Che: This happens more often than you'd you'd wish or hope, but I've definitely spoke spoken to a couple ex I know of real examples where contracts were not well, you know, laid out, or maybe there wasn't even a real contract, or the US side was not IP savvy. And what happened was the manufacturer filed for a patent application on the invention and then listed themselves. And then the US said had no clue because it's in Chinese. They can't see it. They can't read it. They can't search for it. And then somewhere down the road, because patent applications are not published for a while, then down the road it like publishes and they're like, hold on, what is this? Why is there this patent on my invention filed by someone else? And wait, I think I know these guys, you know? And and then then of course you approach them and then depending on how their relationship goes, you can maybe repair it. Maybe they're like, sorry, you know, yeah, let's and then the y it goes well. But if something has soured, they could just run with it. And then the the you trying to litigate in China, this jurisdiction, you have no clue what's going on, is r could be really hard and ugly and they're on their home court and you're not. So so there's protective like if you'd filed first, then they wouldn't, you know, it'd be harder for them to file, honestly. But if you hadn't filed, then the patent office doesn't know that it's not yours. And now is the lit now you have to prove it. Yes, they took it, but now you have to prove it in Chinese. Get a Chinese lawyer. It's just messy, right? If you had filed first, Jack & Jennifer Podcast: Yeah. Jennifer Che: you're just like, hey, look, look, I filed first. Look, see? You don't have to you have your proof right there, right? It's literally the Jack & Jennifer Podcast: Right. Right. Jennifer Che: same, right? And we gave it to them. Look, here's my email where I literally emailed it to them versus saying, like, we thought of it together, you know, like gets can be messy. So that's the horror story that happens that has happened. I've heard of it happening more than once. So it does happen sometimes, especially when relationships sour. Or they're just a little sneaky. Jack & Jennifer Podcast: Yeah, yeah, absolutely. That would be a that'd be a tough scenario if you had to end up basically licensing your own idea back from a Chinese entity in order to to manufacture or sell in that market. That is a Jennifer Che: Yeah. Jack & Jennifer Podcast: something I think most people would like to avoid. And that actually, you know, maybe you have another answer to this question, but I was going to ask, what's the international IP mistake you most often encounter after it's too late to fix? Especially among Jennifer Che: Hmm. Jack & Jennifer Podcast: otherwise sophisticated US startups. That sounds like a big one. That sounds like kind of the Jennifer Che: Right. Jack & Jennifer Podcast: the biggest one. Jennifer Che: And I think mistake, I don't want to use the word mistake because I think that's ca 'cause yeah, I think the biggest regret that I get, you know, usually is just actually not filing or not allowing Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: themselves to have the option to file. Because what's ending up happening now, or at least in the past five or ten years, there are more Chinese investors as well. And then when they come and check out your product and they wanna license it, they may ask, Did you file in China? And then it's one of these where it's like, it wouldn't have cost that much to file in China, but now we may lot lose this investor. So it's not a stupid mistake. It's it's more of just, I think, the landscape of what was important five years ago or whatever that is causing this regret. So then people might come to us and say, what can I do now? Can I still revive you know my US one? Usually the answer is no, it's too late. But what we might try to do is if the product was let's say launched a few years later and it has some minor tweaks, there might be ways of even if it's just eking out those utility models or eking out something, Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: provided it's not published, right? So there's this game you have to kind of find something that you could still file on to at least give the investor something to say, well, we at least have this part protected. But yeah, so I would say from a China perspective, that might be the kind of most costly. But it's not a mistake, I would say it's more of just a regret. Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: the mistake is always disclosure, I feel like. Some kind Jack & Jennifer Podcast: Yeah. Jennifer Che: of disclosure is the mistake. Or sale, by the way. So sales are also novelty destroying Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: events. even even if it's secret. Although China's not like that. China's public sale, but US is if it's secret. Even a secret sale may be considered a sale. So I would say be very careful about, you know, exchanging money for product, right? Somebody could Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: argue that it's a sale. Jack & Jennifer Podcast: Right. Absolutely. I think that's that's kind of the most important one from my perspective. out of curiosity, how long does a utility model last? Is that a set time or does it kind of depend? Jennifer Che: Yeah. It I think's ten years. Jack & Jennifer Podcast: Ten years. Jennifer Che: Yeah. So not bad. Jack & Jennifer Podcast: Nice. Well I no, not bad. That's that's actually longer than I would have expected. I would've expected more like five to seven. So yeah, that's Jennifer Che: Yeah, ten years. Yeah. So it's still pretty good. Jack & Jennifer Podcast: it's a great mechanism. Jennifer Che: It is, actually. I mean design patents are great too. Those are fifteen years. And the nice thing about I would say design patents is that also maybe just a brief primer on enforcement and how it works in China. You can of course do a litigation, which is like a US style litigation. but you can also enforce at kind of the local bureau level where Jack & Jennifer Podcast: Right. Jennifer Che: where just administratively like they can the local you know, they can kind of just if they if you want to enforce, they can kind of get the local police and just like, you know, shut down some factory or something. And the local bureau is very fast and you know in some ways it's more efficient. But the problem is they're not like IP experts. You know, they're they're it's they're not like the IP court, which really understands patents, which is really hard to read. So, you know, sometimes if you show them a picture of a design and they're like, Yep, yep, looks the same, it's like really easy for them to enforce. But if it's like this claim says the walnut widget is connected to the knobby thingy, and they're just like, Jack & Jennifer Podcast: Ha ha. Jennifer Che: does this infringe or not? And it's it's just harder, right? So even trademarks are easy, like yes, that is the same name, yes, that is the same logo, boom, boom, boom, right? If you want fast enforcement, design patents are nice for that because they're just, you know, very, very easy in that sense. Jack & Jennifer Podcast: Yeah, awesome. That I mean, that's why, you know, larger corporations go for the the full portfolio of of patent protection. it is Jennifer Che: That's right. Yep. You want it all. But it's expensive. And sometimes there's Jack & Jennifer Podcast: It's expensive. Jennifer Che: limited budget, right? So you have to choose. Or at least keep your Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: options open, you know, in the cheapest way possible. And the PCT I think is a great way to do that, to keep your options open. Which you guys already learned about, so I won't go into that. Jack & Jennifer Podcast: Right. that pricing question is actually one of the last two things I wanted to touch on before we wrap this up. But, you know, could you give kind of an a broad expectation for maybe even just compared to US design and utility patents? Is it a similar price range? you know, I know Jennifer Che: Mm-hmm. Jack & Jennifer Podcast: there's probably some additional expenses if you're a US startup filing in in China. You gotta translate and stuff like that. So Jennifer Che: true. Yeah, that's a good question. I'll have to do very ballpark because I won't be able to do Jack & Jennifer Podcast: Mm-hmm. Jennifer Che: kind of, you know, direct figures. But you're right. Translation costs is an extra added expense. I will although I will say that with the use of more software tools these days and AI, that cost has been going down through the years. And I can only see it going down more because as you know, AI is a language model. It's very good at translating. You know, so And it's not it's not free, of course, because you want a patent attorney probably to check it, but still it's better than before. The fees in general in China are less expensive than the United States. So I will say you might be surprised that it's not that bad, you know? And if you're used to the fees of filing in the United States. And plus, if you have most of it drafted by a US patent attorney already, the drawings are pretty much the same. It really is just translation of filing fees. So the the most expensive. part usually of a patent application draft is the draft itself, right? Is the attorney time to draft up that whole specification. But once you go into China, you're just translating it and that cost is going down. But yeah, sure, it could still be in potential potentially the thousands of dollars, right? To translate that one good translation. But then after that, it's just you're just going into different countries, right? And then it's just patent prosecution. So I I think overall it is not bad. It is it I would say generally the fees are cheaper than the United States. yeah. Is that is that enough? I don't know if you want like actual figures or not, but I I would say that in general you don't you're not paying for drafting, right? It's mostly translation and filing fees. And yes, of course, when we get if you do an invention patent, yeah, then we might if there's a rejection, which you know is very normal during prosecution, then there is some attorney time to, you know, respond. But again That's not that different from the US and it might even be cheaper if you directly engage the Chinese council. But I will say that most people will work through a US council who helps you manage globally. You can do it either way, of course, right? Large companies will engage the foreign council directly because they have in house patent attorneys to kind of take care of the rest. But most individual, you know, or small companies will just work with a US law firm and you guys have a partner for that, you know, and then he can kind of help engage all the foreign patent attorneys and then work that way. But again, there's many ways to do this. There's no one single hard, fast rule way. But yeah. So happy to give more specific cost information if you want in terms of like more, yeah, general. More specific. Yeah. Sorry. More specific. That's what I meant. Jack & Jennifer Podcast: Well, your contact info will be linked in the description there. So I will let Jennifer Che: Okay. Jack & Jennifer Podcast: anyone watching with further questions reach out to get those figures more directly. perfect. We've been we've been Jennifer Che: Yeah. That sounds good. Jack & Jennifer Podcast: pretty clear. I think we might even have a a video on our YouTube channel titled Patents Are Not Trophies. they are business assets, they're tools. Jennifer Che: Ha ha ha. Jack & Jennifer Podcast: Having said that, it would be really cool to have. patents in multiple countries. So yeah, Jennifer Che: It's true. It's true. It is very cool. I agree. Jack & Jennifer Podcast: it is. Last question. and we may have covered all of this already, but if I'm a product founder listening to this and I know that I may manufacture or sell internationally within the next two years, what conversation should I be having with my patent attorney now? Rather than waiting six months or a year from now. And it might be as simple as Jennifer Che: Yeah, two years. Jack & Jennifer Podcast: start the international patent strategy conversations now, but Jennifer Che: I mean, yeah, for sure. And I think not only the filing, right? Because two years is very soon. And patent prosecution typically takes two to three years. So you may Jack & Jennifer Podcast: Right. Jennifer Che: not have granted patents in two years if you're not acting already, like you're a little bit too late, honestly. Right? So at this point in the conversation it would more be like, Do I need granted patents by the time my product launches? Otherwise you can't sue anyone. Poor copying for the a six months, you know, or two or another year, and that might be really bad, right? Then you might want to be like, well, what are the fastest ways? How can I fast track? How can I do that? I would say if it's two years and you haven't even started thinking, you're like way, way behind. Cause honestly, patent prosecution is two to three years. And that's once you, let's say, start examination. And some countries like China is one of them where you request re-examination or you can wait three years before you request examination. So if you delay request, you don't even start until four years later. Now the beauty of it is if you don't have money and you don't want to go into China, you can wait four years as you can delay examination and start. Other countries like US doesn't have that mechanism, so you just have to start when it starts. But again, you want to know this going into it, right? You want to know which countries can I delay examination, which countries can I fast track? When do I need the granted patent? What can I do? What's my product? Two years is a little too late, honestly. Would be my first answer. I'm like, no. Ha ha. Jack & Jennifer Podcast: Yeah, I mean, yeah, I think that'll be probably kind of a shock to to some people listening, but that is yeah. Nice. Jennifer Che: Okay. But utility models are fast. Okay? They're like one year. Or like maybe eight months even. You can even fast track. my gosh, I saw a recent one that literally took one month. I was shocked. It's like super fast track. There's like Jack & Jennifer Podcast: Yeah, that's crazy fat. Jennifer Che: Yeah, yeah. It was a super, super fast track, but it's only only for domestic. So you have to be a Chinese company to take advantage of that one. Maybe a reason to set up a Chinese company. There's actually these domestic, Jack & Jennifer Podcast: Yeah, I did. Jennifer Che: you know, perks that loc only the locals get. But yeah, that's the fastest I've seen. Like it was literally like two one or two months. It was shocking. But normal is not that. Normal is a year, you know, eight eight eight months to a year for utility model and two to three years for invention pen. Jack & Jennifer Podcast: Awesome. Well, that that covers everything that I wanted to cover in this episode. I Jennifer Che: Cool? Jack & Jennifer Podcast: think we've given people a lot of information, a lot to think about. you're clearly Jennifer Che: Good. Jack & Jennifer Podcast: an an excellent resource for questions on international patent protection. obviously registered US patent attorneys, so you are a resource for US markets as well. If you've got questions about patents, I would encourage anyone listening to reach out to Eagle IP and to Jennifer. Thank you for coming on the Pitch the Product podcast. It was great. I learned a lot. Jennifer Che: Great. Jack & Jennifer Podcast: the any any closing remarks before we we end? Jennifer Che: I think my closing remark is conversation in the very beginning is the most important, right? You wanna know what risks you're taking. And yes, maybe you can't afford everything or maybe you don't want to do all these things, but you'd rather have even if it's just one conversation, one strategy meeting, right? That's it, one hour, right? Pay for that. And I think that's gonna be golden for you because then you can make the decision and say, Okay, I've decided to do this, this, I'm willing to take these risks. The worst is to not know and find out later. So maybe that's my closing remark. Jack & Jennifer Podcast: Excellent. Yes, could not possibly agree more. Jennifer Che: Yeah. Jack & Jennifer Podcast: Thank you again. Thank you to everyone listening for making it to the end of this episode of the Pitch to Product Podcast. Jennifer, we just might have you back because I think I think we'll get some questions on these topics. So Jennifer Che: Sure. Jack & Jennifer Podcast: I'll be sure to give give people your contact information when relevant. And you've got a product idea and you don't know where to start, please reach out to our team at 52 launch. We are happy to give you as much information as you'd like. we'll give you our whole process if you'd like to see it. So it's harder than it looks. thanks again. Jennifer Che: Sounds great, thank you.