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Monday, November 15, 2004

Clever ways to counterfeit - can original technology be far behind?

A fascinating analysis in the International Herald Tribune explores Chinese counterfeiting schemes that are so clever and complex they may be evidence of the capacity for original technology that would revolutionize the Chinese mentality about intellectual property protection. It starts with:

The new Chinese counterfeit game
By Brad Spurgeon International Herald Tribune Monday, November 15, 2004

SHANGHAI International pressure on China to stop its counterfeiters is producing an unexpected twist. Rather than just copying another company's product, many Chinese businesses are filing patents and claiming other intellectual property rights to the counterfeits locally, in effect becoming the legal owners, at least in China.

Companies in the counterfeiting industry, which make everything from knock-offs of Calloway golf clubs and Zippo lighters to brand-name clothes and DVD players for a small fraction of their price in the West, may then even sue foreign companies for ostensibly stealing their patented products.

..snip

"Chinese industry has a phrase for it," said Xiang Wang, an intellectual property lawyer at the Shanghai office of the international law firm White & Case. "They call it 'a Great Wall of Patents."'

...snip

Because patents and trademarks are territorial, unless a foreign company has already filed them in China, its foreign patents and trademarks are invalid in the country.

Thus, Xiang said, if foreign companies do not file their patents and trademarks in China "proactively," their merchandise might be stopped by customs agents and prevented from entering the country. Worse, if they do bring their products into China, the local pirating companies may even sue them for ostensibly stealing patented products, he said.
and ends with
And while the country is criticized for failing to punish the counterfeiters, the enforcement job gets ever more difficult as counterfeiters come up with ingenious ways of masking production. Using DVD players as an example, Xiang said manufacturers set up factories in different places, each one making a different part of the player. The final product is assembled quickly in one place and not stockpiled but distributed immediately, making it next to impossible to prosecute a plant that makes only one part of a copyrighted DVD player.

Henri Richard, executive vice president for worldwide sales and marketing for Advanced Micro Devices, who was in China for the opening of a new headquarters in Beijing, said that making the right strategic decisions in advance was one key to success in China.

He said that he also thought that the Chinese would change over time.

"I think that as they start to build their own intellectual property, they will have a very different view of the whole equation," said Richard, whose company has a new joint venture in the area of software and an embedded processor with a company in China.

"When corporations like Lenovo, Founder and Huawei will have developed a certain number of new technologies and hold patents against them, I'm sure they will be very concerned about the protection of their intellectual property, and that will drive a lot of behavioral change - which, by the way, I think has already taken place."
read the whole article at The IHT

// posted by Ellen @  21:45   //Permalink// 
Ellen says hey
Mainer, New Yawka, Beijinger, Californian, points between. News, views and ballyhoos that piqued my interest and caused me to sigh, cry, chuckle, groan or throw something.


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