China IP Protection: Will it Ever Get Better?

I received a somewhat ranting email the other day from a highly respected China law academic in response to my having been interviewed in an article about IKEA’s stores being copied in China.

Below is the heart of the email:

1. No one in the world thinks China “cares” about intellectual property, in the sense it will voluntarily comply with Western notions of how IP law works or should work.

2. The Chinese do care about IP in the sense that they recognize its value. That is why they will copy whatever they are legally or practically able to copy. For example, on the legal side, it is possible to trademark a color scheme. If IKEA did not trademark its color scheme, then it is perfectly legal for a Chinese company to use that color scheme in its own trade dress. On the practical side, if foreign companies do not pursue infringers in the courts, there is no practical reason not to copy foreign companies if you think it will give you an advantage in the China market.

3. If foreign companies are not willing to register and then defend their copyrights and trade dress in China, they deserve what they get. As China gets more prosperous, the problem will get worse, not better.

There is a more interesting issue, however. The Chinese know this Kunming store is NOT a real IKEA store; they know it is just a Chinese copy. They know it is a fake. So why do they shop there? There are two reasons: 1) the IKEA product is all made in China, so the store is actually selling exactly the same product (or at least this is believed to be the case), so in that sense it is not a fake, and 2) the fake product is cheaper than the IKEA trademarked product, and Chinese only care about price. They don’t care about atmosphere or service or interior design. This leads to their only wanting the foreign brand at the cheap price. So it is mostly about what the Chinese want. They want cheap with no frills. The fake store gives them what they want.

This all leads to another question. China is full of fakes. The eggs are fake, the Baijiu is fake, the wine is fake, the clothing is fake, the phones are fake, the bags and shoes are fake, the antiques are fake. There is no other country in the world even close to China on this. Not India, not Russia, not Brazil, not Vietnam, not Thailand, not Mexico, not Indonesia: not anywhere.

Why?

The Chinese are supposed to love food, but they live in a world of low quality, fake and poisoned food. Why? What’s wrong with China? Will this continue? Is it part of the internal design of Chinese culture, or is it a temporary response to the Leninist single party state? I used to think it was due to population pressure, but the different experience of India, Pakistan and Indonesia shows population pressure is not the reason. There is actually greater overall population density in Holland than in China. So what is actually going on? I really do not understand the current situation in China.

Which leads to another issue: copying is not innovation. If China remains at the copy stage and never moves to the learning and creating stage, where will China be in the future? My own view is that China will not change and that China in the future will be a somewhat poor, quaint country that will be a good place to visit and maybe a good place to retire. All this current interest in China as a future modern superpower is temporary, I think.

Is this person right or has he gone too far? What do you think?

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