Intellectual Property Rights in China

Intellectual Property Rights in China

Intellectual Property Rights in China

Intellectual Property Rights in China

Synopsis

Over the past three decades, China has transformed itself from a stagnant, inward, centrally planned economy into an animated, outward-looking, decentralized market economy. Its rapid growth and trade surpluses have caused uneasiness in Western governments, which perceive this growth to be a result of China's rejection of international protocols that protect intellectual property and its widespread theft and replication of Western technology and products. China's major trading partners, particularly the United States, persistently criticize China for delivering, at best, half-hearted enforcement of intellectual property rights (IPR) norms. Despite these criticisms, Zhenqing Zhang argues that China does respect international intellectual property rights, but only in certain cases. In Intellectual Property Rights in China, Zhang addresses the variation in the effectiveness of China's IPR policy and explains the mechanisms for the uneven compliance with global IPR norms.

Covering the areas of patent, copyright, and trademark, Zhang chronicles how Chinese IPR policy has evolved within the legacy of a planned economy and an immature market mechanism. In this environment, compliance with IPR norms is the result of balancing two factors: the need for short-term economic gains that depend on violating others' IPR and the aspirations for long-term sustained growth that requires respecting others' IPR. In case studies grounded in theoretical analysis as well as interviews and fieldwork, Zhang demonstrates how advocates for IPR, typically cutting-edge Chinese companies and foreign IPR holders, can be strong enough to persuade government officials to comply with IPR norms to achieve the country's long-term economic development goals. Conversely, he reveals the ways in which local governments protect IPR infringers because of their own political interests in raising tax revenues and creating jobs.

Excerpt

A Tale of Two Intellectual Property Rights Enforcement Cases

Intellectual property rights (IPR) are highly controversial in China’s rapidly expanding foreign economic relations. As such, I encountered enormous difficulty when requesting interviews from ipr professionals in China. Nevertheless, I also encountered some pleasant surprises. in early March 2008, my interview request received a warm response from Mr. Wu, a legal adviser with the ipr office of the branch office of the China No. 1 Pencil Company in Bilin City in East China’s N Province. When I entered Mr. Wu’s office, I was immediately attracted to a plaque bearing the title of “Model Unit of ipr Work” (Zhishichanquan Gongzuo Xianjin Danwei) hanging on the wall. Mr. Wu proudly told me, “We won this plaque with our hard work.” He further added, “Maybe some good luck, too.”

As one of the leading pencil producers in the country, Mr. Wu’s company has survived and thrived on the enormous market need for double black pencils used for China’s standardized tests. Standardized tests are important components of China’s talent selection system. Indeed, the tradition can be dated back centuries. It has been estimated that the annual sale of pencils in China can reach as many as 100 million a year. the huge business opportunity has been very tempting for legal pencil producers and counterfeiters.

In May 2005, the China No. 1 Pencil Company identified a large amount of counterfeit double black pencils on the market in Bilin City. This discovery came only forty days before June 7, the day on which the Chinese National College Entrance Exam would take place. This was a very important day for millions of Chinese high school students and their families. If the knockoff counterfeit pencils were used in the exam, there was a very good chance that the scanner would not be able to read the answer . . .

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