IPR monopoly

Many believe that a level of hegemony exists in the international IPR rules, which places developing countries in a disadvantaged position. However, China and some other developing countries have been trying to change the situation in recent years.

The DVD industry in China is a case in point. China's output of homegrown brand DVD players used to make up 80 percent of the global market. But with the market expanding, international giants like Philips have begun to charge Chinese DVD makers considerable amounts in patent royalties.

According to Zhang Ping, a professor with the School of Intellectual Property of Peking University, some international companies have used patents to monopolize their industries.

In August 2006, Zhang and four other IPR professors turned to legal procedures to quash one Philips DVD patent. Four months later, in a conciliatory statement, Philips withdrew the patent and announced that the company would not claim the patent any more in China.

Some observers are worried for the future of China's growing industrial development if businesses fail to learn their way around the patent problem.

"What China lacks is an anti-IPR monopoly mechanism," said Zhang.

Accusations do nothing

On April 9, the United States filed two WTO cases against China: first regarding deficiencies in China's legal body to protect and enforce copyrights and trademarks on various products; and the second on the country's distribution barriers to trade in books, music, videos and movies. This was the third time this year that China had been pressured by the American Government on this issue.

"By doing so, the United States has ignored the Chinese Government's immense efforts and great achievements in strengthening IPR protection and tightening enforcement of its copyright laws," said Tian Lipu, head of the State Intellectual Property Office of China.

"Many of the pirated audio and video products come from the States, therefore a bilateral dialog and cooperation is needed to combat such an international IPR violation and accusations do nothing to help," said Tian.

According to Tian, this April China released the China's Action Plan on IPR Protection 2007. Last year, the country for the first time formulated guidelines for IPR protection and established related complaint centers in 50 cities. On December 29, 2006, China acceded to two major international conventions on IPR protection.

According to Zhang Qin, Deputy Director of the State Intellectual Property Office, China's national strategy on IPR protection, which was formulated in June 2005, will undergo a transformation from theory to practice this year.

The national strategy on IPR protection is composed of 20 topics and one guideline, covering system building, law enforcement, talents training and public awareness regarding IPR protection. The major problem at present is how to curb the abuse of IPR by multinationals.

It is only 20 years ago that China began to create an IPR protection system, and there are many problems still to be solved. According to the State Intellectual Property Office, 99 percent of Chinese companies have not applied for patents and 60 percent do not have their own trademarks. Many are "manufacturing", but few are "creating".

Most of the inventions in China's hi-tech field originate from foreign countries, including mobile communications, semiconductors, Western medicine and computer technology.

Statistics show that by March this year China had technology manpower of 40 million and 1.09 million engaged in development and research, ranking first and second place in the world. In 2006, China's input in science and technology development hit a record high of 294.3 billion yuan, making up 1.41 percent of the country's gross domestic product (GDP), compared with the average ratio of 2 percent in developed countries.

Nevertheless, China's innovation ability leaves much to be desired. It takes time, a favorable environment and an integrated industry chain to construct an intellectual property system, according to experts.