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8/15/04 - PRODUCT PIRACY IN CHINA - 2004-08-16

Product counterfeiting and copyright piracy are at “epidemic levels” in China, says U.S. Assistant Secretary of Commerce William Lash. Chinese counterfeiters are pirating an estimated fifty-billion dollars a year from companies around the world that hold patents on such things as medicines and automobile parts, trademarks for consumer products, or copyrights for D-V-Ds, C-Ds, and other intellectual property. Chinese authorities, says Mr. Lash, are not doing enough to prevent or punish this crime:

“There is a systemic failure in China to actually protect and enforce these laws. . . . Showing concrete results in curbing the manufacturing and reaching the provinces and districts -- that’s the key.”

Speaking in Beijing, U.S. Assistant Secretary of Commerce Lash said that many consumer products developed in other countries are counterfeited in China to be sold there as well as exported:

“From Jordan to Germany, Poland to Paraguay, Chinese-manufactured pirated goods have caused tremendous economic and, in many cases, safety damages. . . . The heart of this problem is in China.”

Mr. Lash pointed out that counterfeiting such products as drugs can be a matter of life and death. And it is estimated that as much as half of some popular medicines sold in China are produced by companies with no authorization from the patent-holders to manufacture them.

Earlier this year, U.S. Trade Representative Robert Zoellick warned that if China does not improve its enforcement of intellectual property rights, “it will subvert the development of knowledge industries and innovation around the world.” This is why some members of the World Trade Organization are looking at what actions could be taken against China if it does not protect intellectual property rights.

The Chinese government has passed laws against product counterfeiting and piracy and has sometimes engaged in highly publicized crackdowns on companies violating those laws. But the penalties have generally not been stiff enough to deter counterfeiters and pirates.

“In America, it’s easy,” says Assistant Secretary of Commerce Lash. “Pirates go to prison. People get fined [large amounts]. . . . People have to know that you’re serious.”