China and Intellectual Property Rights

One of the most common jokes that we make when it comes to China is the great amount of fake and pirated products that they make there. Everything from pirated movies to fake sneakers and designer bags are being made in the country. The quality of those Chinese imitations range from the very bad to the almost authentic.

China and Intellectual Property Rights

This problem of fakes and imitations illustrate a larger problem. That is the fact that China refuses to recognize intellectual property rights especially when it concerns other owners who are from other countries. The Chinese government does not really go after the people who are using other people’s ideas in order to make money. This is the reason why there are so many companies creating fakes and products that uses names and ideas of other people without permission.

Companies Are at Risk

Investing in China seems to be a very attractive idea to some businessmen. What attracts them to the country is the relatively low cost of labor. What some businessmen are unaware of is that they are putting their company at risk by setting up their companies in China. This is especially true with manufacturing companies that have to transfer technology in order for the process to work.

By exposing a lot of people to the manufacturing process a company is putting its own existence to risk. Chinese employees could learn the process, reverse engineer the product and then make it and start selling on their own. When they do so, they would be able to slash down their prices unlike their competition. A lot of companies have suffered this kind of setback.

How to Prevent Information Leakage

For a company that has setup a manufacturing presence in China, there are some things that can be done to protect its technology and process. Here are some ideas that can be tried:

    • Limit the number of people who will learn about the whole manufacturing process.
    • Spread the manufacturing process in several locations.
    • Divide the manufacturing process within a facility.
    • Outsource the manufacturing of simple components.

These are just a few of the ideas that you can try when you are going to set up a manufacturing facility in China. You would need these ideas to protect your technology from being stolen and used by others.

Stealing the Good Ideas

But there are other issues of intellectual property rights in China. One of the most stunning but by no means the most massive is the attempt of several stores to pass off as Apple stores. The places looked as if those were authentic outlets as envisioned by Steve Jobs. It has the logo, it has the same setup for the interior and even the uniform for the staff. The only telling giveaway is the sign on the outside that says “Apple Stoer.” That kind of imitation is evidence that China is one of the hot beds when it comes to the question of intellectual property rights today.