Now China Defends Intellectual Property
As China opened to international markets, violations of intellectual property rights increased: logo and product counterfeiting, usurpation of brands and domains, illicit use of patents, and so on. While European politicians spent years complaining about this, China has moved on, with the government putting a new emphasis on the respect of law in business, which could have far-reaching consequences for Western economies. As the Chinese economy becomes more developed, the government wants to see intellectual property rights enforced in the domestic economy, too. In fact, China has given high priority to investment in R&D, to foster economic prosperity and trade security.
China has been preparing the future for a while. Since the 1980s it has signed all the WIPO agreements, including the Madrid protocol, which enables the registration of the same trademark in 90 countries (China included), as well as the Patent Cooperation Treaty which enables the filing of a single patent application in 150 countries (including China). Also, since 2001, China has passed effective legislation to protect intellectual property rights. The objective is to energetically assert the rights of its firms abroad, thanks to international accords. This objective is accompanied by better protection of the rights of foreign entrepreneurs in China.
Western operators are excessively fearful of the Chinese judicial system, because they find it confusing. However recent cases show that it's possible to make use of Chinese laws to protect intellectual property, as the recent victorious lawsuits filed by Harmont&Blaine and Dsquared2, as well as Ferrero a few years back, clearly prove. Domain names and famous brands are now better protected in China.
But there is still a lot to do. Foreign operators must improve their understanding of the Chinese system of intellectual property. On the other hand, Chinese judicial authorities and administrative officials must be properly trained in intellectual property law, which is a concept largely alien to Chinese culture, as Confucian values always stressed the importance of achieving excellence in imitation. This was the objective of the EU-China agreement reached last January, which involves the European Observatory on Counterfeiting and Piracy and the EU office for harmonization in the internal market, but also national authorities and companies. €7.5 million are devoted to the task.
European politicians have been self-congratulatory about this agreement. But they should not overlook the other side of the deal: WIPO data show that China is massively investing in scientific research and in the protection of its intellectual property; companies are starting to win lawsuits in US courts and elsewhere for violations of Chinese patents. Without additional investments in research, there will soon be little intellectual capital to defend for Europeans.