Intellectual Property Rights in China – business leads the way
In mid-September the China Internet Video Anti-Piracy Alliance, a group comprising both big Chinese internet portals and foreign rights-owners, including the Motion Picture Association of America, announced a broad legal attack. It said that it had begun collecting evidence against more than 1,000 suspected violators of intellectual property and would start filing lawsuits, with the first target being 503 videos found on Youku, an increasingly popular website, that the alliance claims are pirated. Youku has counter-sued for defamation.
The legal assault constitutes an attempt to separate Chinese companies that produce their own content or pay Western ones for imported material, and then charge users from those that often lift it. The division is not entirely clean. Sohu, a leading member of the new alliance, produces its own games and entertainment gossip, which are the mainstays of its business. But it also permits its users to upload files, which can include pirated material. Still, lines are being drawn, even if they are a bit blurry.
The alliance’s first suit involves material used by Youku that belongs only to other Chinese companies. The damages sought are relatively small: 50m-100m yuan ($7.3m-14.6m). But the stakes are vastly higher. In addition to compensation, the alliance wants the court to stop websites using intellectual property without permission. That, in turn, could create a clear legal precedent for blocking unlicensed downloads.
(I find Youku’s legal counter-attack amusing. Does it really think it is acting legally, or is a claim of defamation just a publicity stunt and/or shot in the dark?)
China needs to do more to protect IPR than it does now. If it wants to become a first-world country, it would benefit from producing more profitable technology of its own. If Chinese companies/individuals continue to feel that the risk of being punished for ripping each other’s ideas off is lower than the potential rewards, they will have less reason to sink large sums of money into innovation and let someone else do the hard work.
There is also a risk that if China is not seen to be protecting other countries’ technology seriously, in the future those other countries may not enforce Chinese rights when they come under attack. However, Chinese companies are increasingly seeking patents to cover their work. As Dominique Guellec (OECD) said to the Economist, countries that create intellectual property eventually enforce it as well.
Business is leading the way – the government needs to keep up.
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