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Focused REWIND: U.S. Intellectual Property Concerns in China

  • Commissioner of China’s State Intellectual Property Office Tian Lipu says “China Is Serious About Intellectual Property,” despite negative stories in the media to the contrary.  Intellectual property (IP) laws are a relatively new concept to the Chinese. Pre-1980, little to no knowledge of intellectual property rights even existed.  Since then, formal IP laws and protective measures have been gradually introduced.  As a result, IP infringement in China continues to effect western countries and multinational corporations more each year. Within the last decade, the Chinese government has begun to curtail the problem and acknowledge U.S. concerns. The problem which originated between the two superpowers has now undeniably become a global issue seeking reform.
  • This month, the Chinese Minister for Commerce Chem Deming invited foreign executives from companies such as Microsoft, Motorola and Nokia to attend an intellectual property forum to address and discuss the contentious IP issues.  Slight improvements have been acknowledged by foreign experts stimulated by China’s acceptance of its continued IP abuse and the damaging effects this abuse has caused to its reputation abroad. Moreover, Chinese companies have begun lobbying the government to increase IP protection following the backlash to their own businesses.
  • Over the last three months, 4,000 people have been arrested in violation of intellectual property rights in China, as part of a six-month campaign implemented by the Chinese government to crackdown on copyright infringement, piracy and counterfeit goods. Notably, the number and financial cost of IP infringement cases has tripled in the last year.  The International Intellectual Property Alliance (IIPA) estimated U.S. trade losses to be up to $3.5 billion a year. China accounts for 80% of counterfeit merchandise collected at U.S. borders.
  • Even Chinese government agencies have been criticized for downloading illegal software updates for programs they purchased illegally. The discrepancy between Chinese hardware and software sales is indicative of the ongoing illegality. Protectionist barriers created by the government have also prompted tension with the West. Beijing has gone as far as to implement a trade barrier formally known as “indigenous innovation” which effectively insists that products sold in China must be conceived and designed there.
  • Recent trade discussions held in Washington D.C. between U.S. lawmakers and the Chinese President Hu Jintao included discussion of U.S. concerns for China to restrain North Korea’s aggressive policies, which are mounting pressure on economic trade. Future development between the U.S. and China is largely dependant on the two collaborating and adhering to IP laws. Furthermore, the European Union (particularly Germany) and Japan have voiced concern about IP infringement and trade, urging China to strengthen enforcement and boost protective measures.

Compiled and summarized by Muireann O’Keeffe.