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Intellectual Property Rights Protection in China

Intellectual Property Rights Protection in China

The article titled, “Intellectual Property Rights Protection in China: Is It Time to Believe?” authored by Alexander W Koff of the Whiteford Taylor Preston LLP, elaborates on the concrete moves undertaken by China towards the protection of Intellectual Properties with the special mention of the city of Shenzhen. However, can the efforts be reckoned as sufficient? Or is there still scope for more?

The Wall Street Journal carried an article about the launch of an antipiracy drive by Beijing. What followed was an opinion piece authored by the Commissioner of the IP, Tian Lipu, where he clearly stated that China was becoming more and more sensitive towards the protection of intellectual property rights. So, China seems to making substantial headway in the domain of IP rights protection.

The same beliefs, however, are not shared by the US. According to Gary Locke, the Secretary of Commerce for the US, the approach of China is still lackluster with respect to the protection of intellectual property and enforcement of IP laws. This distrust in China’s declarations bears enough historical precedence. In 2006, for instance, Lipu had issued a statement on a Chinese website, declaring that enforcement of IP rights promotes the growth of Chinese enterprises and encourages innovation. Simultaneously, a Chinese envoy by the name of Yang Guohua was sent to America with the purpose of addressing the IP protection related problems faced by American companies in China. However, the thefts of intellectual properties continued unabated.

Within a couple of years, the gross inadequacies in IP laws enforcement lead to a trade dispute of sorts which surfaced at the World Trade Organization. Both sides claimed themselves as victorious in the January of 2009, at the time of report issuance. IP, therefore, lingers along like a major hitch in smoothening bilateral relationships. Lipu often states that complaints associated with IP protection have been exaggerated. Some also find it untrue that he terms IP protection and enforcement as a global challenge. However, the facts remains, that suitable protection of intellectual property rights would require joint action and a positive and constructive approach from all countries that are involved in it.

The most important question here is that, can China be believed with respect to its seriousness for protecting intellectual properties. An enhanced awareness for the protection of intellectual properties is often associated with brighter prospects of earning wealth. A case in point here is Korea, which is a member of the OECD. Its preference for IP protection has increased in tandem with its phenomenal economic development. Similarly, China too, has established a correlation between growth and intellectual property rights. The economic growth of China has been phenomenal and some of the first grade cities here are witnessing the same level of developments as the second graded cities of the US. Besides, China has become bullish with respect to the requirement of foreign direct investments. The Chinese city of Shenzhen is a case in point.

The development that is in full swing at Shenzhen is strongly reminiscent of Philadelphia, New York and Boston in the 1900s. Today, most of its population consists of migrants from elsewhere. What is now a hub of Chinese innovation and entrepreneurship was only a quaint fishing community 50 years back. Today, it is home to some of the most prominent business houses in the banking and telecomm sector, to name a few. This has definitely captured the fancy of the American investors too. Not surprisingly, Warren Buffet invested a king’s ransom in BYD, an automaker of Chinese origin and has reaped a one billion dollar profit. With such handsome investments in its kitty, BYD aspires to be the largest automaker in China by 2015 and the largest world over by 2025. The founder of BYD, Wang Chuan-Fu pioneered an improved mechanism of battery manufacturing and transformed it into a dominant market for rechargeable batteries. Electric cars would certainly be the next big thing in China.

Shenzhen has also planned a breakfast in the city of New Jersey in order to herald the onset of pharmaceutical companies. The prime aim of the drive is to introduce companies rich in IPs to China. Naturally, the success of these ventures would solely depend on the sensitivity shown towards protection of IP rights in China. The country is registering its progress in the IP protection domain as well. Through 2008 to 2009, the number of patent filings increased by double digits here.

Although China gets better and better with IP rights protection with every passing day, there is still a long way to go. As the nation continues to prosper, effective protection of intellectual property rights would still take a decade more to emerge as a prominent reality. Till then, efforts continue.

Note: Preceding is a summary of an article found though our research. It is provided here with editorial comment for members only. Read the complete article here

The New Asia Innovation Team