European and Chinese toy manufacturing industries – Intellectual property protection
We recently explained the fact that toys importers often have not option but to purchase toys in China however the European and Chinese toy manufacturing industries are intertwined. In Europe, some say that the Chinese toy manufacturing industry is not reliable, due to the risk of counterfeiting. Even if this is a reality, there are solutions to avoid it.
Overview of the European and Chinese toy manufacturing industries
Currently, the EU toy industry is the 2nd biggest manufacturer worldwide. It generates about EUR 5.8 bn. in production value with 51,000 workers (it surpasses the U.S. toy industry which is estimated at EUR 4.4 bn. with 35,000 workers).
China remains the first place manufacturer. The toy production in China represents a production value which is more than five times higher than the one of the European Union with EUR 16 bn. in production value and 128,000 employees involved in the production of traditional toys.
Counterfeiting “made in China” or “made in Hong Kong”
In the European market counterfeiting toys are regularly found. As per the report of competitiveness of the European toys industry, it is estimated that in the period of 2010-2011, there were on file “872 infringement cases of toys with a retail value of € 16 million and 2,585 infringement cases for games with a retail value of € 20 million. The two main countries of origin are China (88%) and Hong Kong (10%).“.
This situation tend to frighten small and medium European manufacturers away from collaboration with the Chinese toy manufacturing industry because they are worried about having their IP compromised. However compared to the total amount of goods manufactured in China, the number of infringement cases is quite small even if the psychogical impact on the European toy manufacturing industry is large. Moreover, European manufacturers and importers should know that there are solutions to protect their intellectual property in China.
Intellectual property protection in China
The European toy manufacturers/importers should protect their intellectual property in China. To do so, plenty of resources are available on the China Sourcing Information Center such as the following video.
In addition, the toy importer should carefully select its supplier by checking if he is trustworthy and able to protect its intellectual property. To do so, some third party inspection companies offer intellectual property inspection services. It should include a review of the factory’s control of:
- The factory profile (as per a standard factory audit)
- The leakage prevention systems in place at the supplier’s (security procedures, contracts, NDA’s and staff training)
- The on-site facility (to find out if protected items are displayed in the sample room, the storage of product-specific tooling is well protected, the sensitive products are not marketed in the supplier’s brochures or on the Internet, etc.).
- The information technology system (it includes the checking of antivirus software, sensitive electronic documents accessibility, management of removable computer media, etc.).
And you: what is your opinion about the European and Chinese toy manufacturing industry?
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