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US panel looks at intellectual property violations in China

Grant Gross | June 16, 2010
USITC members question how to measure the amount of IP theft in the country

Foreign companies doing business in China "believe our numbers more than the ones that are published by the Chinese government," Gantz said.

Chinese software piracy hurts not only U.S. software firms, but it also gives Chinese users of unauthorized software an unfair advantage over their U.S. competitors that pay for software, Holleyman said.

U.S. customs officials report that about 79 percent of all counterfeit seizures at the U.S. border involve products from China, added Shaun Donnelly, senior director of international business policy for the National Association of Manufacturers.

China is "ground zero for international counterfeiting and piracy," Donnelly said.

Representatives of the Chinese government were invited to speak at the hearing but did not respond, a USITC spokeswoman said.

Part of the problem, said Ohio State's Chow, is that copyright enforcement in China is uneven. Fines for counterfeiting are small, and the Chinese government often sells confiscated counterfeiting equipment back to infringers at auction, he said. Jail time is "not much of a deterrent because it tends to be very rare," he said.

Still, Chow recommended that U.S. firms, which have done their own raids in China, stop their "obsession" with enforcement and instead work on educating the Chinese public about the benefits of intellectual property rights. Chinese officials are tired of being lectured about intellectual property laws, he said.

"This approach isn't working," he said. "Companies have to think in the long term."

The USITC investigates trade complaints involving injury to U.S. companies.


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