How do you protect your Kickstarter brand from Chinese pirates?

Photo credit: Roger Sayles.

If you’re crowdfunding a popular product on Kickstarter, there’s a fair chance that Chinese pirates have already stolen your idea.

As detailed in a recent Quartz article on intellectual property (IP) theft, China’s manufacturing prowess and shanzhai (copying) culture have created an environment where local entrepreneurs can quickly seize new product ideas to engineer low-cost knock-offs for sale in China and worldwide.

This problem is particularly acute for crowdfunding sites like Kickstarter, where product concepts are routinely introduced before the actual product is ready for market.

In this article, we will first provide an overview of the typical situation facing foreign brand owners in China. We will then offer best practices for protecting against Chinese pirates.

We write from our daily experiences engaging with this problem and from the recent uptick in our representation of Kickstarter-backed companies facing these issues.

(Of course, this problem is not just relegated to Kickstarter. This is merely the latest variation on a common theme that has been affecting foreign brand owners in China for decades.)

The problem

Imagine you’ve come up with the ultimate consumer gadget. With a need to bootstrap your product into development, you arrange a Kickstarter campaign to secure initial funding. The campaign is a success, and you rocket to the top of the Kickstarter popularity list. But as you do, the attention you’ve attracted has already started to work against you.

Josh Horowitz, in his article in Quartz, captures what happens next:

“…one week after his product hit Kickstarter in December 2015, Sherman was shocked to see it for sale on AliExpress—Alibaba’s English-language wholesale site. Vendors across China were selling identical smartphone case selfie-sticks, using the same design Sherman came up with himself. Some of them were selling for as low as $10 a piece, well below Sherman’s expected retail price of £39 ($47.41). Amazingly, some of these vendors stole the name of Sherman’s product—Stikbox.”

Sherman is not the only entrepreneur to run into this problem. Unfortunately, it’s only the tip of the iceberg.

Typically, the activity we see from pirates encompasses a range of IP violations. This includes the simple production and sale of knock-off products to full-on identity theft, where a Chinese company seeks to replicate the foreign company’s trademarks, visual distinctiveness, and products for the Chinese market.

IP violations often include the following:

Registration of trademarks in China

Best practices for IP protection