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China under fire from EU, US, over patent protection

Copyright piracy employs hundreds of thousands of Chinese, and one of the top challenges in stopping infringements is to find legal jobs for them, a leading European patent official said yesterday.

It is important to realize that mass production of fake DVDs, medicine and car parts is now an industry, said Ingo Kober, president of the European Patent Office.

"This industry has to be eliminated. But you can't just eliminate it, and tell people, OK, you go ahead and find out what you want to do now," he told a briefing in Beijing.

"This industry has to be replaced by a legal structure, and that's what's so difficult," he said.

Kober told a Sino-European symposium on protecting intellectual property rights that there are limits to what Europeans can do to help China find new jobs for this vast underground army.

"I think it's not the task of the European Union to develop China as a country and as an economy," he said. "The main task, of course, has to be accomplished by China itself."

One possible solution would be to allow Chinese pirates to make roughly the same products as they are now, but in a legal manner, he said.

The precondition is that European companies extend licenses to the Chinese producers, in return for fees and royalties.

For that to happen, however, European copyright holders must be confident Chinese licensees will respect their rights.

"Giving a license means you have to keep to the license once the license is given," he said.

Both Europeans and Americans have been turning up the heat on China over its poor record on the protection of intellectual property.

When US Trade Representative Robert Zoellick visited Beijing on Wednesday, he told his Chinese hosts they must do a better job at ending rampant piracy and counterfeiting of foreign products.

The European Chamber of Commerce in China this week also distributed a position paper that identified infringements of intellectual property rights (IPR) as the top concern for businesses operating in the Chinese market.

"The Chinese market is a very large market, and therefore very important for us," Franz Jessen, deputy head of the European Commission's delegation in China, said at yesterday's press conference.

"And therefore, the respect of IPR in this market is of particular importance for us," he said.

Piracy may be a major creator of jobs, but it also has a negative impact through the lengths and breadths Chinese society, and it is not only foreign enterprises that get hurt, Jessen said.

Fake power cables without the quality of the originals cause copy machines to break down or burst into flames, he said.

Even more seriously, consumers buying famous brands of medicine in hopes of getting better may be in for a nasty surprise.

For the European pharmaceutical firm whose product is being copied, the impact is unlikely to be limited to lost revenue.

"The reputation of the European company would be damaged in the process, even though it was a copied product that was being used," Jessen said.
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