US ITC: China doesn't play fair
The US International Trade Commission (ITC) says that China’s ineffective enforcement of IP is a threat to US firms and that its indigenous innovation policies threaten US exports and investments.
China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy, released in December 2010, measures the effects of IP infringement and public policy in China on the US economy and jobs.
The report—the first of two requested by the US Senate Committee on Finance—states that “significant structural and institutional impediments” in China restrict the enforcement of IP rights.
It said: “There are also difficulties in prosecuting civil IPR cases, including relatively low damage awards, the lack of a robust system for discovery of evidence, sporadic application of contempt citations for uncooperative or dishonest defendants, an inexperienced judiciary, and onerous requirements for the use of evidence from abroad.”
Chinese government policy could have a direct affect on US firms in China. “Many observers agree that the Chinese government is actively using government procurement contracts to create a market for the products of Chinese companies,” said the report, “and to foster a general acceptance of Chinese brands over foreign brands.”
Leading Chinese government officials have said that goods produced by Chinese affiliates of US and other foreign firms will be considered indigenous innovation products, according to the report.
Counterfeiting is concentrated in the industrialised south-eastern region of China, according to the report, which names the provinces of Guangdong and Fujian as particular threats to trademark owners. The second report will be released on May 2, 2011.
