WWD.com/business-news/government-trade/china-toughens-rhetoric-on-intellectual-property-1610839/
government-trade
government-trade

China Toughens Rhetoric on Intellectual Property

Amid the buildup for the Summer Olympics in Beijing, China declared a tougher stance on protecting intellectual property rights, but the best measure of the...

The Olympic Games have resulted in more pressure on the Chinese to crack down on counterfeiting.

WASHINGTON — Amid the buildup for the Summer Olympics in Beijing, China declared a tougher stance on protecting intellectual property rights, but the best measure of the impact will likely come long after the athletes depart.

The Chinese government unveiled the “Outline of National Intellectual Property Rights” this spring and Vice Premier Wang Qishan touted the initiative during his visit with U.S. cabinet members during last month’s Strategic Economic Dialogue here.

Wang said China would undertake four specific steps to establish stronger intellectual property rights protections: timely revisions and implementation of legislation protecting patents, trademarks and copyrights; defining the boundaries of intellectual property rights to help “ensure a level playing field” and address abuses; speed up revisions of regulations and laws detailing the punishment for intellectual property violations, and start an educational program condemning piracy, counterfeiting and plagiarism.

The altered position on intellectual property from a country that has historically been a major source of counterfeit goods comes as several key global factors are intersecting. In addition to the Olympics, China faces two pending World Trade Organization cases filed by the U.S. over intellectual property, and there is growing outcry in Europe and the U.S. over the volume of counterfeit items from China.

Estimates of the amount that is stripped from the U.S. economy by pirated and counterfeit goods are as high as $250 billion annually. The concentration of so much manufacturing in a place with a lack of intellectual property protections, and which is now under intense scrutiny, is bound to have an impact, said Susan Scafidi, a law professor at Fordham University in New York.

“There is a kind of vortex circling around China and intellectual property,” she said.

The Olympics puts China under a microscope, which could force a lot of issues to the surface and China is keenly aware of the scrutiny it will be under, experts said.

“China is about to be placed in the commercial spotlight of its history,” said Mark Sommers, a trademark partner at the law firm of Finnegan, Henderson, Farabow, Garrett & Dunner. “It is doing everything it can to assure the world that its taken the necessary steps and safeguards to make [the Olympics] a successful event, whether that’s intellectual property rights or cleaning up the air.”

The Chinese vice premier wrote an op-ed piece in The Wall Street Journal before the Strategic Economic Dialogue in which he said, “As a developing country in the process of accelerating industrialization and urbanization, China still has a long way to go before it can catch up with the U.S. in IPR generation, usage, protection and management. We hope that China and the U.S. can work more closely on intellectual property rights, duly recognize their disparities in capabilities and standards of IPR protection, and properly handle their differences and disputes.”

In an effort to increase public awareness of these issues, Chinese officials created an anticounterfeiting DVD featuring actor Jackie Chan that could be shown on flights to Beijing this summer, said a U.S. government official who spoke on condition of anonymity. Industry experts have said they see a modest trend toward improvement of China’s piracy and counterfeit enforcement efforts, the official said.

The Olympics is China’s “coming out party,” said Caroline Joiner, vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center. Joiner said holding the Olympics in Beijing could hasten reforms.

“We have often said that what’s really going to turn the tide in China is when they’re own skin is in the game, when local industries have intellectual property to protect,” Joiner said.

For most experts, the true litmus test of intellectual property reforms in China will come after the Olympics hoopla fades.

“The key test is when the cameras are gone and the world’s eye is no longer on China,” Sommers said. “What will China do to follow up the show? How long will the afterglow last? That’s anyone’s guess.”

The recent moves by the Chinese government are “a good first step,” said Bob Barchiesi, president of the International Anticounterfeiting Coalition, but it’s not enough yet to guarantee the security of companies’ intellectual property.

“I think you’ll continue to see gradual improvements [after the Olympics], but I don’t think you’ll see that landscape change as quickly as intellectual property owners would like it to because a lot of it is economically driven,” Barchiesi said.