China’s top IP official might need to import some reality

November 16, 2012

China PiracyOn Sunday, the head of China’s State Intellectual Property Office accused Western nations of “distorting” the propensity of Chinese companies to make knockoff products that infringe on the intellectual property assets of overseas companies.

Tian Lipu, who is China’s top official when it comes to intellectual property, also said his country’s reputation for being the epicenter of global piracy is unwarranted and that other countries are not giving enough recognition to China’s efforts to enforce the observance of intellectual property protections.

I think I’m not alone in needing a little more evidence to believe this.

All in all, reasonably trustworthy estimates put the cost of China’s counterfeiters to foreign firms at around $20 billion. Chinese companies have been accused of copying everything from medicine to clothing to media materials and, of course, every fake product that is produced and purchased takes a bite out of the market an above-board company can exploit. The Chinese government’s apparent willingness to turn a blind eye to this activity has been a decades-long source of frustration for many companies.

Based on his remarks Sunday, Lipu is either dramatically out of touch or in denial. Or maybe both.

For example, Lipu claimed that most of China’s banks, government agencies and businesses pay for their software, but that contrasts with Microsoft’s estimate that about 80 percent of software installed on Chinese computers is counterfeit.

The comment of Lipu’s that made me roll my eyes the hardest was his observation that there is a market for counterfeit goods; because people continue to buy them, they continue to get made.

Well, yes, Lipu. But there is also a market for illegal drugs and prostitutes. Just because people are willing to pay for these things doesn’t mean they should be sold. Sure, that’s injecting some moralizing into capitalism, but I think it’s pretty basic moralizing that most people wouldn’t find preachy or offensive.

China’s intellectual property relationship with the rest of the world never fails to interest me because it’s such a puzzle. We need China economically in so many ways, but its permissiveness toward intellectual property has not improved much, despite was Lipu claims. That puts the U.S. in a position of having to condemn China verbally but reward it through actions (like trade). Like a lot of people, I imagine, I’ll be interested to see what develops here in the coming years.