When we talk about intellectual property rights, many people’s first reaction is that “registering a trademark is enough.” However, in actual cross-border cooperation, intellectual property rights are much more than that. They are not only a tool for protecting creativity and brands, but also affect a company’s initiative in cooperation negotiations and its ability to control risks when facing overseas compliance and disputes in the future.
In cross-border collaborations, brands often need to collaborate with designers, OEM manufacturers, photography teams, and other parties. From design and prototyping to production and promotion, these tasks are no longer handled solely by the brand. However, a common issue that arises is: Who truly owns the intellectual property rights related to the product?
Many companies invest significant funds and creativity into collaborations and should rightfully own the rights to the resulting products. However, when the product is copied, removed from the platform, or even when preparing to enforce their rights, they discover: the logo was not registered, the packaging design cannot claim copyright, and even the product patent is registered under the name of the collaborating factory or outsourcing partner.
“I paid someone to do the work, but why doesn’t the outcome belong to me?” This is the first intellectual property ownership misconception many companies encounter in cross-border collaborations.
Intellectual property (IP) refers to the results of human intellectual labor, such as inventions, trademarks, designs, article content, promotional materials, etc. Many people think that only content that has been patented or trademarked is considered intellectual property, but this is not the case. As long as it is original and can be identified as a “creative achievement,” it is generally considered intellectual property. In cross-border cooperation, different countries/regions may have different definitions, protection methods, and ownership principles for intellectual property rights.
Common intellectual property rights in brand management include:
- Trademarks: Unique symbols that identify a brand’s products or services, such as brand names, logos, and symbols.
- Patents: Novel and innovative methods for performing a task or solving a technical problem.
- Copyrights: Original works such as images, videos, and music.
- Trade secrets: Any information that is useful to a company, secret, and confidential, such as formulas, customer lists, and supply chain models.
Interested in learning more? Please refer to our previous article: Brand Protection in Cross-Border E-Commerce: How to Avoid Intellectual Property Risks
In cross-border cooperation, a common misconception is that as long as payment is made, intellectual property rights naturally belong to me. The fact is that the creator is not always the legitimate owner of the rights. Unless both parties clearly stipulate otherwise in the contract, the default rules of ownership are mainly determined by local laws.
Basis of IP Ownership (General Principles)
- Intellectual property rights are generally owned by the creator, unless otherwise specified in a contract or by law.
- IP can be owned by individuals, companies, or organizations, or jointly owned by multiple collaborators.
- Rights holders can transfer, license, or sell IP, provided they have legal ownership.
In cross-border cooperation, the default ownership of intellectual property often catches many companies off guard in the following situations:
- Without a signed ownership transfer agreement, IP results such as design drawings, photographs, and product prototypes may still belong to the outsourcing party.
- Default ownership is typically determined by local law, not by “who pays.” For example, in Australia, unless otherwise specified in the contract, the copyright of creative works completed by contractors defaults to the contractor themselves.
Before engaging in cross-border cooperation, companies need to clearly understand the intellectual property legal framework of the target market to avoid mistaking local usage habits or practices for having international effect. It is essential to complete trademark searches and registrations in the target market before cooperation to prevent brands from encountering legal obstacles such as “first to file” in overseas markets.
Common Misconception 1: As long as I paid for it, the intellectual property rights belong to me.
Many overseas brands assume that when collaborating with Chinese contract OEM manufacturers, if the products are designed by them and the development costs are borne by them, they naturally own all the intellectual property rights. However, if there is no explicit intellectual property rights assignment agreement (such as IP clauses stipulated in the contract), the manufacturer may, based on their own creations or registrations, hold certain intellectual property rights in the relevant market, and even have the right to use these designs to sell similar products in other markets.
Common misconception 2: If you use it first, you automatically own the intellectual property rights.
In cross-border cooperation, many companies naturally believe that as long as a certain term or design has been used locally for a long time, or is a common term, then its use in any country will not constitute infringement. Some companies even believe that “I am the original creator,” and that even if the other party has registered a trademark, they have no right to prevent them from using it. However, in practice, these notions often encounter serious legal challenges.
📌 Case Study: UGG Trademark Dispute
The Australian brand “UGG Since 1974” has been operating in Australia since 1974 and holds local trademark rights. However, while the term “UGG” is considered a generic term in Australia and New Zealand, it was registered as a trademark by the US company Deckers Outdoor Corporation as early as 1995, covering over 130 countries worldwide. In 2024, Deckers filed a lawsuit in the United States, alleging that “UGG Since 1974” had used the “UGG” trademark without authorization in overseas markets. This ultimately forced the brand to change its name outside of Australia and New Zealand, losing the internationally recognized brand name it had previously enjoyed.
First: At the beginning of the collaboration, clearly define the ownership and usage boundaries of intellectual property rights through a contract.
Before the project commences, it is recommended to sign a written contract with the collaborating party to clearly define core terms such as the ownership of intellectual property rights, the scope of usage, and confidentiality obligations, thereby mitigating potential risks from the outset. This should include, but is not limited to, the following key points:
- Clearly define who holds the ultimate ownership of intellectual property rights and the commercial usage rights;
- Whether the collaborating party is permitted to improve or further develop the original results, and the ownership of such results;
- Whether there is an obligation to return copies of technical documents such as design drawings and models after the termination of the cooperation;
For example, when commissioning others for processing, if unregistered or undisclosed technical achievements are involved, the contract should require the other party to assume confidentiality obligations and clearly stipulate that they shall not register or disclose such achievements without authorization. If the cooperation involves joint research and development, the ownership, usage rights, and profit-sharing mechanisms of the achievements should also be clearly defined.
Second: Establish an internal intellectual property management mechanism.
For companies with a certain level of R&D capabilities or technical expertise, don’t wait until a dispute arises to think about “protecting intellectual property rights.” As your business gradually expands overseas, establishing a clear and practical intellectual property management mechanism is actually a key step in laying the foundation. Specifically, you can start with the following directions:
- Based on actual business conditions, use standard intellectual property clause templates in external cooperation to prevent disputes arising from unclear ownership.
- Regularly sort through existing patents, copyrights, and other resources, and perform renewal, change, and other management tasks.
- During project development, regularly file important technical documents to facilitate subsequent confirmation of intellectual property ownership.
Through these measures, companies not only “own” intellectual property rights, but also truly acquire the ability to ‘manage’ and “respond to risks,” laying a solid foundation for subsequent brand globalization.
Summary: Intellectual property is not a cost, but an asset.
In cross-border cooperation, brands, technology, and creativity are often the core competitiveness of an enterprise. Proactively planning intellectual property and establishing management mechanisms is not only a defensive measure, but also part of market competition. Before entering the global market, it is worth asking yourself: Are my core values well protected?
Written by Xueying Yang; Content planning: Sun Gang; Xueying Yang; Proofreading: Sun Gang
The content of this article is based on publicly available information and the author’s understanding, and does not constitute any form of professional legal advice or basis for business decisions. Readers should refer to this article in the context of their own actual situation and consult relevant professionals for specific guidance. The author and the publishing platform do not assume legal responsibility for any consequences arising from the use of the information in this article.
Consultation with Specialized Lawyers
Abraham Sun
Principal Solicitor
As the Principal Solicitor, Abraham has been working with numerous clients including listed companies, state-owned enterprises, ultra-high-net-worth clients, and investment banks. Customers in various industries including Australian and Chinese companies and individual investors, had achieved considerable economic benefits with his professional legal advice.
Dickson Luo
Solicitor
Dickson mainly conducts dispute resolutions and commercial litigation in areas across insolvency, corporations, employment, real property and consumer law. He is proficient in English and Chinese Mandarin, and have extensive experience acting for clients who have limited or no English skills in complex disputes and litigation matters.
Linda Thai
Solicitor
Linda assisted our legal team with a range of litigation matters in Australian intermediate and superior courts. She has established solid foundations in litigation from assisting in matters from the initial investigation stage to briefing and liaising with barristers and also assisting our solicitors at court appearances.
Bhanu Seemar
Solicitor
Bhanu is a commercial litigation lawyer who has extensive experience working closely with counsel on a range of commercial law matters including contract disputes, insolvency disputes, consumer and franchise disputes, shareholder claims, financial services and regulatory enforcement matters, corporations law, and class action litigation.
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