This paper is an extension on my previous publication dated July 5, 2010. In this paper, I inquire into the bases for western perceptions of China's intellectual property system and attempt to assess whether they truly reflect the business operating environment in China.
For the theoretical framework, I use the "Theory of Reasoned Action," as introduced by American social psychologists Martin Fishbein and Icek Ajzen, and conclude that a combination of a series of misguided "attitudes" and "subjective norms" have ultimately served to discourage corporate directors, officers, and executives from choosing to participate in China's IP system.
This paper begins by analyzing several case decisions which indicate an improving intellectual property environment for foreign businesses. It proceeds to investigate the merits of a series of arguments which have been levied in support of the conclusion that China's intellectual property system is weak and ineffectual, such as the urban-rural gap in IP enforcement, broad notions of the unique aspects of China's legal system and interpersonal relations being above the law, the so-called "indigenous innovation policy" and its technology transfer requirements, the costs associated with taking part in China's legal system, issues of judicial corruption, and claims that China does not enforce criminal sanctions against perpetrators of IP theft.
In the end, it is argued that China's intellectual property system is not as weak as commonly believed, and that well-advised western business executives should seek to participate in China's IP system. This means filing for IP protection with Chinese authorities, consulting with local counsel and business consultants, and submitting to available administrative, judicial and criminal procedures for enforcing their IP rights. When operational professionals are sent to China to protect a foreign company's IP concerns, those that are sent should have experience working with the Chinese system.
The paper concludes with a quote from Jiang Zhipei, the Chief Justice of the Intellectual Property Rights Tribunal of the Chinese Supreme People's Court. He argued that "foreign companies should take their complaints to courts rather than to the newspapers or their politicians" and that "foreign companies should complain less and act more." Given the improvements made to China's IP system over the past several years, Jiang's words encapsulate the best advice that can be given to a western company with IP concerns, interested in doing business in China.
Brian Joshua Safran is pursuing a Master of Science in Global Affairs with a specialization in International Law at New York University.
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