Chinese Companies Face IP Challenges

Chinese companies are more active in overseas markets recently, with direct investment increasing each year. However, many of them have encountered problems, specifically intellectual property disputes.

CRI's Liu Min report.

According to a recent report, China has become the sixth largest international market with foreign direct investment reaching 17.8 billion US Dollar this year, up 44 percent year-on-year. At the same time, many Chinese companies are encountering a host of problems with intellectual property issues.

In 2009 the number of intellectual property cases against Chinese companies increased significantly to as high as $ 400 million. In order to protect the rights of Chinese companies, the government has established a special fund to assist Chinese companies to apply for patent in foreign countries.

Director Tian Lipu from the State Intellectual Property Office says the government is helping Chinese companies to reduce risks in overseas market.

"Last year, our central government established a fund worth 52 million yuan to assist companies in applying for a patent in overseas markets. Actually, it is not a large sum, but it shows that the government fully supports the Chinese companies, not only to sell products made in China, but also to promote products with our own patents."

It's the time of the "knowledge economy," where intellectual property is regarded as a crucial intangible asset, as well as a tactic and tool amid the commercial competition. However, many Chinese companies were not fully aware of the importance of this field, leading some joint ventures and acquisition projects to fail.

But gradully, an increasing number of Chinese companies are becoming aware of their weaknesses. Many of them are using core technologies to explore the overseas market, and have paid special attention to international standards in patent application and trademark protection.

Chinese companies like ZhongXing and Huawei Communication are pushing intellectual property forward before they take any actions in the overseas market. Huawei ranked the first in the world in the number of international patent applications in 2008. Deputy Director Wang Junwen from China Import and Export Product Trading Association says many Chinese companies are stepping up in this field.

"Many Chinese companies have greatly enhanced their awareness of intellectual property issues. Many of them are fully prepared before they branch out."

The Chinese government is also stepping up to cooperate with the international community in improving mutual understanding on intellectual property issues. This week, U.S. Attorney General Eric Holder is in Beijing to attend the Sino-US Intellectual Property Conference.

"The United States and China have worked together to investigate and prosecute intellectual property offenses in the past, and I am committed to working with my counterparts in Beijing to produce even more concrete action in the future. I was heartened to see that, just this week, the Chinese government opened a new campaign against intellectual property crimes. As China continues its growth, it will be just as much in their interest as it is ours that we jointly pursue robust enforcement of intellectual property rights."

Opportunities abound for those who are fully prepared. Facing the international market, only those who respect intellectual property rights can seize them in the age of the "knowledge economy."

For CRI, I'm Liu Min.