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IPR Protection Needs Exporters' Attention

Officials and experts urged Chinese exporters to be more attentive to intellectual property rights (IPR) protection to avoid IPR violations.


They made the call as some nation's stricter IPR standards could create problems for exports of Chinese high-tech products, which have increased rapidly in recent years.


Teng Fei, a senior researcher at the Development Research Center of the State Council, pointed out that China had "faced an increasing number of technical barriers that concern IPR protection over the past few years."


Four charges were launched by the United States to ban Chinese exports in 2003, claiming they violated US IPR rules.


Goods such as batteries, chips, DVD players, tractors and mowers have been affected by these charges.


Goods are banned from being imported to the United States if they are considered to be in violation of US patent rights, according to Section 337 of the US 1930 Tariff Act.


Wang Qinhua, director of the Bureau of Industry Injury Investigation under the Ministry of Commerce, said that China had fallen foul of Section 337 of the act.


"(So) it is imperative for local firms and exporters to learn how to protect themselves against IPR charges," she said.


Before deciding to export a certain product, companies should launch thorough investigations to ensure that they are not in violation of IPR rules, Teng said.


For example, a chemicals trader should first ensure his exports are permitted by Chinese laws and regulations, he said.


"China has export controls on some sensitive goods," Teng said.


The trader must also make sure his exports comply with IPR requirements in the designated country.


Teng cautioned that traders normally have to obtain certificates to use patented production methods and trade marks.


Traders should also meet other standards required by the designated country even if they do not agree with them, he suggested.


Traders conducting original equipment manufacturing (OEM) and original design manufacturing (ODM) should have a stronger awareness of cushioning risks caused by IPR violations, said Wang.


"They should ensure that their foreign clients have the trade marks, patents or copyrights of the products," Wang suggested.


If the clients do not have such rights, Chinese firms should sign disclaimer deals with them to ensure they will not bear any responsibility once IPR violation occurs, she explained.


It is also important to establish an information-disclosure system to increase companies' awareness of related international laws and trade situations, Teng said.


"Local players are weak in term of respecting IPR," he said. "Sometimes they do not realize they have violated IPR rules."


Such a system will help educate them, Teng added.


When Chinese firms are faced with IPR infringement charges they should do so in a bold manner and hire experienced lawyers.


But sometimes it is better for exporters to compromise in order to minimize their losses.


"Chinese companies can choose to compensate the foreign company which is suing them in order to avoid losing a market," he said.


However, the best way to solve the increasing number of IPR cases is to strengthen research and to develop our own IPRs and patents, Teng said.


Most Chinese firms are currently weak in this regard, despite a few companies such as Haier having succeeded in nurturing a comprehensive IPR strategy.


Industrial associations and chambers of commerce are also being urged to play a bigger role in linking the domestic and international commercial communities.


"Many IPR issues can be solved under negotiation and mediation via associations and chambers," Teng said.


(China Daily July 30, 2004)



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