Winning the copyright battle in China

By Wei Gu
October 28, 2009

WeiGucrop.jpg— Wei Gu is a Reuters columnist. The opinions expressed are her own —

When it comes to protecting intellectual property in China, the United States often feels that its pleas are falling on deaf ears. Its best hope is that China recognizes that copyright protection is in its own interests. To achieve that, Washington needs to push for changes from within.

After a fruitless decade of lobbying China on intellectual property, Washington has reached for the microphone. This week, the U.S. Chamber of Commerce launched a high-profile international forum on intellectual property in Guangzhou, capital of Guangdong Province and best known as both China’s manufacturing hub and the global centre for intellectual property theft.

Guangdong understands it cannot hold on to both titles forever. Its reforming leader Wang Yang has vowed to build an innovative Guangdong, but he and his deputies understandably do not want to be criticized in public. The U.S. delegation included high-ranking officials such as Commerce Secretary Gary Locke, but the very man they hoped to engage with didn’t show up.

Foreign pressure can help, but changes rarely happen in public. First, both parties need to agree on what they are trying to achieve. As a manufacturer for the rest of the world, China has historically seen little upside in protecting copyright. The United States needs to convince Beijing that, if it wants to develop its own products, then protecting copyright is important.

Huawei Technologies, the telecom equipment maker based in Guangdong, could be a good partner in this. In 2003, Cisco sued Huawei for copyright violations, but dropped the suit after Huawei agreed to stop selling some products. Now, Huawei has emerged as a strong protector of copyright. Last year the company filed the largest number of patents in the world.

Song Liuping, Huawei’s chief legal officer, advocates increasing the penalty for IP theft, a view shared by Americans. But he thinks the problem is not the lack of an adequate legal system or even lax enforcement, but the absence of a culture in China that values designs, patents, and copyrights.

China is likely to act when it feels others are trampling on its rights. A Chinese group recently complained that Google’s planned online library of digitised books might violate Chinese authors’ copyrights. The more China feels that its own interests are at stake, the more serious it will get. When every new movie or software program can be copied for nothing, it is impossible to develop a film business or software industry.

It is better to back Chinese movie stars and technology entrepreneurs rather than American politicians to drive this message home in China.

— At the time of publication Wei Gu did not own any direct investments in securities mentioned in this article. She may be an owner indirectly as an investor in a fund —


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To be sure, copyright laws drafted to insure western quasi-monopolistic paradigms can be of little interest to the emerging markets of the East. That being said, not everything that CAN be stolen is something you would WISH to.

Posted by sanssouci | Report as abusive

I just bought windows7 for under 1 US Dollar in China. Even if I could not find it in China I could download it with a torrent. You think that is going to stop? That is like trying to stop drugs in the US. You arrest Gmoney and the next day his boy JT is out on the same block with some fresh product. You want copyright protection for big monopoly corporations? Tell them to quit overpricing their products. Windows7 should only cost a few dollars and be mass produced. The Chinese are showing them how to do it. Instead of crying maybe they should start learning. You put them out of business by eliminating the incentive.

Posted by jay | Report as abusive

It is unlikely that China will allow the protection of international copyright. Until, of course, it has copyright it feels like protecting.

This simply represents the Chinese attitude towards intellectual property, or at least the intellectual property of other nations.

This only goes hand in hand to other open secrets, such as the high amount of industrial and cyber espionage which is traceable to China. Though in diplomatic circles, it is considered poor form to mention it aloud.

Until China decides to respect personal property rights, it will be up to the owners to take action to protect their interests.

And for software, this simply means mandatory registration and DRM. And compulsory security updates designed to detect and report the identities of pirates who have unauthorised versions of software.

None of which are inconvenient. Except for software thieves, of course.

Posted by Anon | Report as abusive

Copyright is to protect monoplies from upstarts that can do the same thing, faster cheaper and better – it is anti-competitive and brings progress and innovation to a screeching halt. Open source and Creative commons addresses this issue slightly but no entirely. I say lets throw patients and copyright law in the trash and see what company can produce the best gear for the best price with the best parts available.

Otherwise we’re really just stealing our future from ourselves.

Posted by catech | Report as abusive

you might have bought windows seven for 1.00, but its going to cost you more money whem your computer crashes due to the virus you downloaded. Save yourself some troubles and go with quality.
You get what you pay for!

Posted by sruiz | Report as abusive

Software and cellphone makers have to take into account Purchasing Power Parity when pricing products internationally. An American or European minimum wage earner can easily afford an iPod, whereas that same thing would cost an middle income range office worker in India months to save for. Price it at figures relative to each market income range.

Posted by racont3ur | Report as abusive

Copyright is not to protect monopolies from upstarts that can do the same thing faster, cheaper and better.

Copyright is to stop people using code they didn’t develop, to sell programs they didn’t invent, to make profits they didn’t earn.

Or alternatively to punish pirates for using software they didn’t pay for and have no legal right to use.

Posted by Hmmm | Report as abusive

I do not think that the US is adequately regulating its own corporations that are regularly ‘stealling’ intellectual property from smaller competitors, then engaging in protracted civil litigation to induce ‘distressed payments’.

I think as we look at the next dynamic change to our core systems, that China will awaken to the American Idea that the next big Idea could come from an individual and that you want that property protected.

I think that with China preparing its new technology marketplace, China will present opportunities to European and other foreign innovators to access their capital markets at lower costs for the next WAVE of intellectual property developments.

One little change in physics can change (“everything”), I think that China realizes this and will see protecting US Copyright as the right way to go.

It might also see fit to attract US Innovators that are starving for capital in our BIG-GOES-WITH-BIG Banking System which is absorbing everything in sight (without fair and JUST COMPENSATION to the small enterprize) like a black hole.

I think if China realizes that Intellectual Property Protection attracts innovative growth of a dynamic economy and that in support of the innovator you have an edge on the world – the way the US used to be, then China will respect all US Copyright and look to attract the best and the brightest innovators to Chinese Capital Markets with greater opportunities than the PIRACY FEST of BIG-GOES-WITH-BIG, that has been going on here.

Posted by James Reginald Harris, Jr | Report as abusive

Saying that overpricing is the root of the IP theft evil is absolutely ludicrous. Take the pharmaceutical and biotech industry, for instance. Even if we presume that the “first discovery” happens in a well-funded, perfectly-run university setting, the development and clinical trials that the corporations have to pay for can’t possibly be refunded if prices drop as considerably as people want them to. No money in the business means no research, which means no new healthcare.

I realize this is going in the patent rather than copyright direction, but the point still stands. Lowering prices is just fine for manufacturing (which is why the Chinese sell Windows 7 for one USD), but is impossible for development. I guarantee that the support staff’s and developers’ salaries can’t be paid by one-dollar-a-copy sales. In my opinion, the belief that overpricing is the problem here is a shortsighted and frankly anarchistic opinion.

Posted by Chris | Report as abusive

I personally am not going to buy Windows 7 made by Microsoft. Of course; I am not a fool to pay $100 or more for this product, making greedy Microsoft corp richer. I would be a fool if I do not buy a pirate copy because it only costs a few dollars. Unless Microsoft or any other Technology company stop being so greedy, people will not stop buying cheaper copies. Are you seeking to protect the big monopoly corporations? or should you morally care for the masses who work hard for their money. Then, tell the big corporations to stop overpricing their products. Windows 7 should only cost a few dollars and be mass produced. The Chinese are selling them for a dollar and still making money. If Microsoft prices its Windows 7 between $5 and $10, people will not have any incentive to buy “illegal” copies of it.

Posted by Michael Antoun | Report as abusive

Michael Antoun.

So essentially your argument is:

“I don’t want to pay for something, so I should have the right to steal it”.

Everything from that point is just rationalization. Just like any thief or criminal will try to justify their actions in some manner.

Following your logic, if someone has less then you and they steal your stuff, you won’t complain right?

Or does the exception to stealing only apply to you, when you want to steal software? That would be convenient.

Posted by JohnisGood | Report as abusive