Trade Rep Raps China on Piracy

The United States warned China Monday that the country’s intellectual
property (IP) theft issues are not being solved quickly enough. The problem
needs to be fixed sooner rather than later, said U.S. Trade Representative
(USTR) Rob Portman.

Speaking to reporters in Beijing, Portman said China’s lax IP protection is
“disproportionately” affecting U.S. knowledge-based exports.

“China should roll up the illegal distribution networks that are known to
bring millions of fake DVDs and CDs to market,” Portman said. “Fakes on
every street corner are an unbecoming symbol for a world power, such as
China. Likewise, government offices and government-controlled firms should
not use fake software.”

According to the Business Software Alliance (BSA), software piracy in the
Asia-Pacific region cost manufacturers close to $8 billion in 2004.
Worldwide, losses due to software piracy were estimated at more than $32

The BSA puts piracy rates in China at 90 percent.

In May, the U.S. placed
China on its Priority Watch List after a January review of Beijing’s IP laws
and enforcement actions. The USTR concluded in its report that infringement
levels remain unacceptably high throughout China.

“The most common and sometimes most frustrating response I hear from the
Chinese is that the government is working on the problem but it will take
lots of time,” Portman said Monday. We have heard it with currency and we
also hear this very often in regard to the protection of intellectual
property rights.”

In trade talks, the Chinese sometimes point to the fact that the U.S. took
more than a century to develop its IP protection system and that China to date
has had only a couple of decades. Patience, Beijing advises.

“It is hard to develop a full and thorough system for the protection of IPR.
But China is not building this system from scratch, and Chinese companies
seem to understand these concepts pretty well when they invest in other
countries,” Portman said.

He added that the rampant piracy is also hurting the Chinese.

“While U.S. firms suffer huge losses from IP piracy . . . the losses faced by
Chinese firms and by Chinese entrepreneurs and the Chinese economy are even
greater,” Portman said. “Chinese musicians, movie studios and authors lose
profits from their own efforts because they cannot enforce their own legal
rights throughout the country.”

According to Portman, the U.S. remains eager to work with China on IP

“We have been working intensely with China on intellectual property
protection for more than a decade, beginning in the early 1990s,” he said.
“We have had several agreements and there has been significant improvement
in some areas . . . in the development of IP laws.”

He added, however, “To date, though, the problem of intellectual property
protection is not being solved quickly enough.”

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