Warning for startups: protect first or pay later

Li Xiaoyuan, founder of a translation company, believes entrepreneurs should apply to register trademarks as soon as they set up their businesses.

This was a lesson drawn from her experience with her own company, which is based in Lanzhou in Northwest China. She did not apply for trademark registration until she discovered online that there were several other businesses whose names included Yiku, a key word in her company's Chinese name. She discovered this more than a year after she had set up her company.

Li said she wanted to protect the company's intellectual property, but found the name Yiku had already been registered. "We applied to register another trademark, Fanye, instead," she said.

To avoid potential risks and protect its IP, Li's company changed the name of its official WeChat account from Yiku to Fanye. Because of this change, the company lost many of its WeChat followers and its popularity suffered.

Li said it is common for many entrepreneurs to register only company names. They do not realize that they should also register trademarks at the start and so avoid the sort of problems her company encountered.

Liu Sisi, founder of IP service provider Zhiguoguo.com, also suggested startups apply to register trademarks promptly to protect their brands.

She said startups usually focus more on market promotion in their early period and are not aware enough of the importance of IP protection and accumulation.

Zhao Hu, a lawyer, agreed with Liu. Zhao said startup founders often concentrate on issues such as marketing and financing and do not understand the importance of IP.

"If they ignore IP protection at the start, they might encounter big problems later on," Zhao said, adding that new technologies developed by some startups can be used by other people, usually former employees or competitors, to file patent applications.

He said on his Sina blog that startup managers are not necessarily proficient in IP, but should realize they need to protect their companies' new technologies and trademarks under IP laws. They should know that "the earlier the protection, the lower the cost", Zhao added.

He also suggested startups engage professional teams to help protect their IP. He said there are IP agencies that can help companies file applications for trademark registrations and patents, and professional IP lawyers can help set up an IP system as well as plan IP management.

You Yunting, a lawyer, said on his Sina blog that different startups should have different focuses on IP protection.

Patents and trademarks are important for manufacturing startups, You said, adding that companies should file patent applications to protect their original technologies and can use patents to combat competitors that imitate their technologies.

He said trademarks are key for manufacturing companies that provide similar products to their competitors because trademarks protect brands and help customers to identify their products.

According to You, copyrights are more significant for creative businesses as well as traditional software companies. Copyright registration can help them prove and protect their rights, he added.