Mon, Jan 10, 2005 page12

• US firms get tough on IP piracy

  BAD REPUTATION Chinese companies are responsible for 70 percent of intellectual property theft, and they are the target for new moves combatting the flood of fakes

  • AFP
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  American businesses, losing a massive US$250 billion a year to copyright piracy, are taking the fight against counterfeit goods in Asia to the sources of production, with China at the frontline of the onslaught.

  "This is getting to be a very serious matter," said Thomas Donohue, president of the US Chamber of Commerce, which has unveiled an "unprecedented" global initiative to combat the crime this year.

  The problem, he said, had become so serious that in China one may not be able to differentiate between a car produced by the world's biggest automaker General Motors and a fake.

  "I'm told that in China recently we had the piece de resistance," Donohue said, highlighting US concerns over illegitimate goods at a recent media briefing. "And that is that some folks in China were building cars for General Motors who then found out that four towns away, they were building the very same car with the same brochures, and who could tell the difference?"

  According to experts, China produces 70 percent of the world's counterfeit goods.

  But China, increasingly embarrassed by its reputation as a global center for pirated goods, has signaled it would get tough with counterfeiters.

  Last month, for example, Bei-jing lowered the value of counterfeit goods over which a person could be prosecuted from 100,000 yuan (US$12,000) to 50,000 yuan (US$6,000).

  Focusing on China's major role in both the problem and the solution, the US Chamber of Commerce recently established an "on-the-ground lobbying presence" in Beijing as well as a China-focused global business coalition to enhance intellectual property protection, Donohue said.

  It is part of a three-pronged global strategy to go after the thieves, said Donohue, who leads the biggest business lobby in the US.

  Under the strategy, the chamber will educate businesses, the media and lawmakers on the growing economic threat of counterfeiting; work with manufacturers, retailers and law enforcement agencies to disrupt the use of legitimate distribution channels to peddle fraudulent products; and implement country-specific initiatives in "priority" areas.

  This year, while expanding lobbying and education in China and Brazil, the chamber will launch education and enforcement programs in South Korea, India and Russia.

  India has improved its intellectual property rights regime but protection in some areas remains weak due to inadequate laws and ineffective enforcement, the US Trade Representative's office said in a study last year.

  Piracy of copyrighted materials, particularly software, films, popular fiction and certain textbooks, remains a problem for US and Indian rightholders, it said.

  In South Korea, Washington is seriously concerned that modern copyright protection is lacking in important areas, the report said. Key among these is Seoul's failure to adequately update laws to protect sound recordings against digital piracy.

  Donohue said the chamber had set aside "a significant amount of money" for programs to protect intellectual property overseas.

  "We are building coalitions. We have just hired some extraordinary people. We are in this deal for the long run because it is a lot of money, lot of American ingenuity and a lot of safety involved in this issue," he said. "These are serious crimes that put consumers at risk with fake prescription drugs, untested consumer electronics, harmful cosmetics, exploding batteries and substandard automobile and aircraft parts."

  Intellectual property theft costs 750,000 American jobs a year, according to the chamber.

  The World Customs Organization and Interpol say the global trade in illegitimate goods increased last year to more than US$600 billion.

  Microsoft boss Bill Gates, whose company is facing a tough time cracking the Chinese market due to fakes, said the US could not compromise on intellectual property.

  Pirated copies of the software giant's products in China are widely available at prices as low as little more than US$1 for a CD-ROM.

  Gates felt economies that want to become competitive should respect intellectual property as it was an "incentive system" for products of the future.

  "There are fewer communists in the world today than there were," he said when asked at a forum about current attempts to curb intellectual property rights.
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