Reports of China IP’s Demise Are a Bit Premature

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Ever since glancing at Why China May Never Protect IP, written by Chris Meyer and Julia Kirby for the Harvard Business Review (h/t China Law Blog), I’ve been trying to figure out how to approach the subject. The premise of the article is unnecessarily provocative, and the substance of the piece is actually just another retelling of the old “the Internet has changed the world” story.

I was certainly not in a good mood after reading this introduction:

The truth is that China is not working hard to protect IP, but the conventional wisdom in the west is that, once China’s own economy begins to create intellectual property with global value — patents, drug formulations, movies for the world market — its government will see more gain than pain in a stringent IP regime.

But is that right to assume?

China has big problems with its IP enforcement, but to say that it is simply not trying tells me right off the top that the authors don’t really understand what’s going on in China. Fair enough, let’s just hope that they at least understand intellectual property.

Perhaps not. The second point there regards the conventional wisdom that once Chinese companies start having big problems with IP infringement, they will push the government on enforcement measures. Unfortunately, I don’t think the authors understand this either.

We are talking about China IP law, not the global system. It doesn’t matter if Chinese companies become multinationals; we already know that their trademarks and patents will be enforced in the U.S. and EU. What’s important is the effect of increasing infringement of Chinese IPRs in China.

Well, that was just the introduction, and I’m already in a bad mood. But actually, the rest of the article isn’t so bad, it’s just irrelevant to the premise. After throwing out the idea that China may not enforce IP in the future, the authors spend the rest of the article on the well-tread subject of how the world, and business models, have changed because of the Internet.

This is a big topic that would take a long time to deal with. To cut it short, yes of course the Net has made some traditional business models obsolete. Yes, we could probably do better with a system that cuts back on the scope/time of patent protection. I wouldn’t argue with any of that, and I also agree that some sectors (music, publishing) are desperately in need of some new thinking.

All that being said, the authors somehow forgot their original thesis, which was that China in particular may choose not to enforce IP rights in the future. I think that the structure of the argument here was supposed to be:

1. China currently does not enforce IP rights.

2. Things are changing in the “Information Age” such that protecting IP rights doesn’t make as much sense as it used to.

3. China may therefore just decide to chuck it all and never enforce IP rights.

Hopefully that’s an accurate summary. Well, as I said above, #1 is just a false statement. China’s IP laws are at international standards and it does enforce them. Granted, enforcement is problematic, spotty, and downright awful depending on a number of factors — but the government has made a lot of progress over the years. If a decision has been made at the highest levels of government about the direction that China will go with respect to enforcing IP rights, it is emphatically that IPRs will be taken seriously.

Therefore, even if the “Information Age” has had dramatic effects on how we look at IP rights, the premise here fails. China’s IP regime is not some tabula rasa, it has been around for quite a few years and is headed in the right direction.

Now, if the authors wanted to make the claim that the entire world may end up scrapping copyright, patent or trademark, that would have at least been something worth arguing. I personally favor a slightly less muscular global IP system but believe that a world without copyright or patent is a Cory Doctorow pipe dream.

4 responses on “Reports of China IP’s Demise Are a Bit Premature

  1. tanner boyle

    Why is enforcement problematic? It seems China can control plenty more complicated issues than DVD replication if they care to.

    1. Stan Post author

      They could certainly do a lot more if they prioritized it. Some things would be relatively easy, some others would be difficult and expensive. It is complicated, and a lot of the problems happen at the local level where the Central Government’s power is limited.

  2. Graeme

    The economics of patents and copyright are very different. There is evidence that copyright is beneficial to society as a whole (although optimum length of copyright should be much shorter – see Rufus Pollock’s work).

    On the other hand, the evidence is that patents do little good to compensate for the additional costs are barriers they impose. The sudden introduction of software patents in the 1980s in the US failed to have a positive effect on innovation in the software industry, pharmaceutical patents are a highly inefficient way of increasing R & D spend, and the incentives are mismatched with societies needs (so regulators resort to additional incentives, and still cannot get key drugs such as new antibiotics developed), etc.

    The use of the terminology of IP conflates three very different things.

    1. Stan Post author

      A lot of Net activists who argue against copyright restrictions lump in trademark and patent when they discuss “IP” and don’t even know it. Others, like the HBR article authors, attempt to generalize with both copyright and patent, ignoring that these are very different kinds of IPRs. Most of these people simply don’t know IP very well, and that’s the problem.