Glass Is Half Full In Regard To IPR Infringements In China, ... Is It Really?

According to Reuters Vice Minister of Commerce Jiang Zengwei either showed his sense for the rather British form of humour the understatement or he is a die-hard optimist. In the very same year when 85 percent of all counterfeit goods seized at the EU originate from China, according to the EU Customs, Mr Jiang was quoted  by Reuters saying:

"You could say that there still exist some problems with China's IPR, but I don't endorse the idea that it is extremely serious," Jiang told reporters at a press conference. Read the complete Reuters article here.

March 29, 2007 I wrote a blog with almost the same title: IPR Infringements: Glass Is Half Full Or Half Empty. Not so much has changes in regard to objective statistics and the ability to frankly admit "suboptimalities" in the enforcement of IPRs.

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TGIF: Intellectual Property Enforcement Coordinator Says The Darndest Things

Online copyright piracy is a serious problem. China has started a campaign of three months to blacklist websites with pirated content so that Chinese telecom operators can take them offline. Now one can question the effectiveness of this temporary measure, see here. But there are even worse solutions... Look at the idea of Brad Sherman, U.S. democratic representative, which goes.. let's say a bridge too far. Doug Palmer reported for Reuters that Sherman said the U.S. government should use cyber-combat techniques to take down internet sites in China, Russia and other countries that sell pirated U.S. music and movies. Of course the US could take Chinese websites offline if they are based on servers in the US, subject to US laws. But if the servers are in China, this would be obviously a violation of China's sovereignty and could be answered with similar cyber-combat strikes at US websites based on US servers.

Incredibly, Victoria Espinel, the US White House Intellectual Property Enforcement Coordinator responded allegedly, according to Palmer's Reuters article: "That is something we're actively investigating." And then Espinel allegedly continued: "But while it is technically possible, it does not take long for the sites to pop up in new locations." Was she seriously considering this or just like a thought experiment? Read more here.

The same article is a nice follow-up on the misguided use of hyperboles when one only wants to say that the level of IPR enforcement in China is unacceptably low. Sir Arthur Bamford called it "cancer", see here, and William Delahunt is taking the hyperbole one step further and calls China's low IPR enforcement "economic terrorism". These words are probably not conducive to solving the IPR enforcement challenge in China.

One might better use arguments for protection and enforcement of IPR in China (regardless whether these are in the hands of domestic or international companies/persons) that show China's advantages, based on David Ricardo's theory of comparative advantage, and disadvantage if it engages in mercantilistic policies. This is hard, now that China's economy is so successful and the importance of its domestic market is growing. Ms Espinel, and many international IPR holders are facing a daunting task to protect and enforce IPR in China.

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Shanghai Court Awards Microsoft 318,000 US dollar Damages For Copyright Infringement

Kathrin Hille wrote for the Financial Times that a Shanghai court ordered Dazhong Insurance, "a Shanghai-based insurer backed by Chinese state-owned and listed companies" to pay 318,000 US dollar to Microsoft for use of illegal copies of its software. The Global Times reported that the court was the Shanghai Pudong New Area District Court, read here.

Stan Abrams of China Hearsay has a lot to say about the case, he gives a disclaimer because there was limited information on a case that was just decided. "Even without details, I thought it was worth making a series of assumptions so I could discuss some general points. I undoubtedly made some incorrect assumptions about this specific case, so please keep that in mind." Mr Abrams' analysis is interesting as always, read here.

In August four men who ran the website Tomato Garden were given prison sentences and fines for distributing counterfeit Microsoft software. Read Chris Buckley's article for Reuters about it here.

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Gartner Predicts 2012 Software Piracy in China Will Fall To 50 Percent

Kelvin Soh and Melanie Lee report that "Gartner estimated that software piracy rates in mainland China would fall as low as 50 percent by 2012, putting it almost on a par with rates in developed Asian markets like Hong Kong. See there Reuters article, via the MSNBC site here.

The Business Software Alliance claims the following economic benefits of lowering software piracy in China from 82 percent in 2008 to 72 percent in 2011, see here.

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