Protection of Embedded Software in China

The value of machines is increasingly shifting from the actual machine to the embedded systems and thus above all to the embedded software. This means that in addition to protecting the machine with traditional IP, i.e. patents, utility models and designs, the software should also be protected as good as possible.

So how can embedded software be protected in China?

There are three options: Under certain circumstances, it can be patented as a computer-implemented invention. It should be noted however that the granting proceedings for patents take a long time, the disclosure of the invention and therefore parts of the software is mandatory and the risk that the application will be rejected is high.

Another option is to register the software as a copyright. This can easily be done at the Copyright Office of the VRC after submitting the certain documents, e.g. 60 pages of source code. Since the office will not carry out an in-depth examination before registration, a copyright certificate can easily be challenged in court. If this is the case, the court will re-evaluate, based on the evidence submitted, whether there is actually a copyright for the software. This means that, despite the registration of the copyright, the development of the software must be well documented.

Good documentation is also crucial if the software is to be protected as a trade secret. The Anti Unfair Competition Law of the People’s Republic of China defines all business information as a trade secret – be it technical or operational – which is not publicly known, has a commercial value and is protected by appropriate measures. Trade secrets are not filed or registered. If legal proceedings against the theft of trade secrets are initiated, it must be proven that appropriate protective measures have been taken.

Companies should be able to demonstrate a consistent protection strategy for embedded systems and thus embedded software that guarantees a consistent level of protection and stringent documentation of all development steps and protection measures from the very beginning of the development. Both technical measures such as copy protection and organizational measures play a role in the development of the protection strategy. Questions to be considered are for example: Where is the system developed? Who has access to the files? Is it possible to track who accessed what and when? Is the software named with a uniform name everywhere? How is the source code protected from hacking during development? Who has access to the CAD files for the circuit boards?

The protection strategy and the consistent implementation of all protection measures must be documented in order to succeed in civil litigation. If everything is well documented the plaintiff can easily provide prima facie evidence of misappropriation of the trade secret, the burden of proof then passes to the defendant, who must prove that the information was obtained legally.

In summary, protecting embedded software is a complex but feasible task that companies should not neglect.

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