China Knowledge@Wharton, a bi-weekly online resource, has an interesting overview article about the Land-Grab Mentality: The Cutthroat Competition on China's Internet.
Mark Natkin, managing director of Marbridge Consulting in Beijing said that in the business environment where rules can change overnight, people are searching and finding shortcuts. Copying another company's IPRs is such a shortcut.
Edward Yu, president of Beijing-based consultancy Analysys International gives some examples: "Baidu is actually a similar model to Google, with a bit of local adaptation. CTrip is actually a mirror [image] of Travelocity and Expedia…. You can take advantage of this from a pure investment return point of view. But from an ethical point of view, it’s a different story.”
The most interesting remark, in my opinion, was made by Mr Natkin who said that the Chinese government is waiting until the number of internet companies has narrowed down (because of consolidation by mergers and acquisitions or that smaller companies will die) from 200-300 to 10 internet companies, and at that point will start to regulate. From a practical point of view this makes a lot of sense. Also bigger companies will start to demand more regulation in the competition and protection and enforcement of their own IPRs.