Op-Ed Contributors

IPR needs a holistic approach

By Ma Chao (China Daily)
Updated: 2010-10-21 07:51

Chinese people today are more aware about the protection of intellectual property rights (IPR). Though many still have a vague idea about IPR, more businesspersons and consumers are paying attention to intellectual property, including patents, copyrights and trademarks.

A World Intellectual Property Organization report, issued in February, says China applied for 7,946 patents last year. That only the United States, Japan, Germany and the Republic of Korea applied for more shows the rising level of IPR awareness in China.

David Llewelyn, legal expert on IPR issues and deputy chairman of the Intellectual Property Academy of Singapore, says China has made good progress in IPR. The country has made great efforts and achieved lot in the area in a relatively short time. A latecomer to the intellectual property field, China introduced its first IPR law, the Trademark Law, in 1982. In less than three decades since then, it has put in place a fairly complete and mature IPR law system.

When China joined the World Trade Organization (WTO) in 2001, it accepted to abide by the international conventions on IPR and to protect intellectual property. The WTO membership has been functioning as a stimulus, culminating in the formulation of the national IPR strategy in 2008.

Llewelyn, however, says that enacting laws alone doesn't necessarily mean they would be enforced properly. Take China for example - it has introduced laws but faces enforcement problems. Pirated and counterfeit products are still available in the country, and many people still cannot tell the real products from the fakes.

There still are many consumers who don't care about intellectual property while buying products, Llewelyn says. Hence, educating the people about the importance of IPR is of utmost importance. Only if the IPR violations are curbed and relevant laws enforced properly can the domestic market be considered mature.

People usually see intellectual property from the legal point of view. But in reality it has various facets. So, people have to see intellectual property in a holistic way, Llewelyn says.

Intellectual property creates business opportunities. A company will find it hard to maintain its competitive edge if it only imitates others' products and makes them at lower cost, because another company could make the same products at an even lower cost. It is essential to invest heavily in research and development (R&D) to keep inventing new products continuously and thus build a business that remains competitive in the long run. Protection of IPR is crucial for encouraging companies to make innovative and creative products, which are at the core of a modern economy.

IPR requires financial institutions to be innovative with their system, too, Llewelyn says. Traditional banking focuses on physical property, and it is usually difficult for intellectual property owners to obtain capital from the financial market. Ways should be found to channel capital to companies that have the innovative capacity but face fund shortage.

He says China should introduce a pilot project to allow companies to use their intellectual property as collateral to acquire bank loans. Similar projects have been implemented in other countries, including the US, and experience shows that bankers have to be educated about the concept of intellectual property.