SAN JOSE, Calif. - Enforcement of intellectual property rights (IPR) laws still remains a ''serious problem'' in China, according to a new and recent report from the U.S. International Trade Commission (ITC).
''Significant structural and institutional impediments undermine effective enforcement, including the protection of IPR infringing industries by local Chinese officials, a lack of coordination among government agencies, insufficient enforcement resources and training, and non-deterrent civil and criminal penalties,'' according to the report.
''However, there are some signs of improvement in IPR enforcement, particularly in courts in major cities in China,'' according to the report. But, however, ''ineffective IPR enforcement contributes to the widespread infringement of U.S. firms' copyrights, trademarks, patents, and trade secrets in China.''
Here are some major findings in the report:
*IPR enforcement in China consists of raids and seizures. But they only result in temporary shutdowns in production within factories. Criminal prosecutions are ''rare.''
*''China is implementing indigenous innovation policies that may reduce business opportunities for U.S. firms in China's fast-growing economy. This 'web of policies' often embedded in government procurement, technical standards, anti-monopoly, and tax regulations may make it difficult for foreign companies to compete on a level playing field in China.''
*''There is also growing concern that the Chinese government's indigenous innovation policies, which promote the development, commercialization, and purchase of Chinese products and technologies, may create new barriers to U.S. foreign direct investment (FDI) and exports to China.''
*Some 240,000 Internet cafes in China reportedly rely on ''illegal copies'' of entertainment software. Products and trademarks are still ''routinely'' counterfeited.
*China was the source of some 79 percent of all U.S. customs seizures in 2009. Hong Kong accounted for 10 percent. In total, the domestic value of all U.S. custom seizures were about $204.7 million in 2009.
*China only pays a fraction of IPR royalties, as compared to other countries.
I dont see things changing in coming days. I think this trend will continue till some drastic measures are taken by firm itself rather than relying on chinese government. I dont turst chinese government, recently leaked cables showed possible hand of chinese Govt in cyber hacking. So its pretty hard to think that they will worry about US IP's.
@ warren, exactly. May be more applicable to chinese market also. Currently all the foreign products/IPs are cloned and sold for very low prices in China. But in future when products with chinese IP comes to market,they would want to enforce all the IP rights and wouldnt let foreign companies sell in chinese market.
Warren has it basically correct.
Usually people ignore or avoid things until it gets right in their face and starts poking them in the nose.
Even if we acknowledge what China does, there is no need to accept that, and companies should move to enforce their IPR's aggressively. To not do so will encourage violations.
I don't exactly agree. I'm thinking they'll ignore the rules, by and large, right up to the point when they have substantial volumes of IP and sufficient IP at odds with others and then we'll see China become ferocious advocates for the defense of international IP rights.
Selling China on the virtues of IP protection will be an uphill battle. US fiscal policy (quantitative easing etc.) is killing the value of their dollar reserves, leaving the west looking like the bad guys. So while the old Maoist pragmatism is slowly giving way to fair(er) play in global markets, turmoil outside China gives them an excuse to circle the wagons and stoke the fires of nationalism.
I agree that IP needs to be respected but the situation in China is so complex and different. Foreign country can't simply put their rules set to China. It takes time for China to evolve and respect other's creation.
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