A successful business maximizes opportunity while minimizing risk. If your company's competitive advantage hinges on a key piece of intellectual property (brand name, patented technology, etc.) then there may be countries that you avoid for fear of having your intellectual property (IP) compromised. The problem with this approach is that side-stepping a market does not necessarily mean that the risk is actually avoided. Take for example China, the IP piracy capital of the world. If you have IP worth stealing, then IP pirates will try to steal it regardless of whether your company ever enters the Chinese market.

Here is an approach that can help protect IP while still taking advantage of what will soon be the largest market in the world:

Register Your IP Well Before New Market Entry

Chinese IP thieves often attend international industry trade shows. They will ask booth workers if the company is looking for distributors in the Chinese market. If the employee says yes, then the pirate goes home to China and registers the company's name and product names as trademarks and domain names. China is a first to file IP country, whereas the U.S. is first to use. A company that wants its brand back must pay the extortion to the IP thief—all of which is legal in China because the thief now owns the rights.

It is important to register your trademarks and patents in China before the IP thieves do it first. This makes defending IP much easier because a company can actually appeal to the Chinese legal system. Beijing knows that they have an IP theft issue. Now even Chinese companies are complaining about this and the system is shifting towards better enforcement.

Take the IP Fight to China. . . with Back Up

We've all heard and probably seen counterfeit products coming out of places like China. A customer thinks they've bought your product only to find out that it was produced by someone else. Your brand name is tarnished as the counterfeit product breaks down. Chinese counterfeiters seek out companies with a Chinese market avoidance strategy. They want to continue to reap profits from product knock-offs without hindrance from the original company.

If the Chinese market is a large opportunity for your company, then use it as part of your IP protection strategy as well. A strong Chinese strategic partner will share your interest in fighting your counterfeiters and trademark squatters. Invest in a tight relationship and your Chinese partner will know how to effectively use formal and informal means to neutralize IP piracy in-country. Also, if your company invests in any manufacturing in China then relationships with local and regional government officials can also put pressure on IP pirates. These efforts will also help to reduce the amount of counterfeit products leaving a country like China for other export markets.