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Intellectual Property Rights - The Chinese Challenge

Guest post by: Greg Tyndall

Article Overview: Doing business with China presents many opportunities but with that come many challenges too. Different attitudes towards knowledge and rules means that China is perhaps culturally opposed to the very notion of intellectual property. Chinese culture respects the knowledge itself and not the ownership of that knowledge and this culture has slowly developed over 5000 years. Moves are being made within China to address the issue of IP ownership, there are more courts, trials and prosecutions but Western organisations will still need to tread with caution regarding their IP rights when it comes to doing business in this exciting economy.

Intellectual Property Rights - The Chinese Challenge

China’s economy has been one of the first to recover from the global downturn and the pace of growth looks set to continue. Businesses of all shapes and sizes are now finding that they are encountering Chinese involvement from a number of different sources, whether through direct dealings or third party relationships.

At the same time as this the more traditional Western economies, such as the UK, are undergoing a serious reassessment of their commercial awareness and in particular a review of their intellectual property rights. Many organisations are quickly realising that their IPR is fast becoming a key asset, if not “the” key asset.

Doing business in China, or indeed with China is a major opportunity but it is also, like all opportunities, not without its major challenges. One of these challenges is the management and protection of intellectual property. Chinese attitudes towards intellectual property are quite different in many cases to their Western counterparts.

The main difference in attitudes towards IP, comes from one of the key cultural differences between China and the West. In China a great emphasis is placed on the need for cooperation and unity within business. In essence “deep down” the culture of the Chinese is almost fundamentally opposed to the very concept of intellectual property rights.

Paralells can be drawn between China’s take on IP and that of open source software developers. A battle has been quietly raging between those who believe that, like education, effective software is almost a human right. This has given rise to the open source software community, which engenders a spirit of shared ownership and mutual benefit. To members of this community notions of intellectual property are counter to their deep-seated culture.

One of the major differences between China’s relationship to IPR and ours is based on our respective attitudes towards rules and procedures. For this reason China’s attitudes towards the legal profession itself is vastly different from ours. Finally the very notion of agreement is open to interpretation much more in China than the West.

Primarily China has a different attitude towards knowledge. It is the knowledge itself, which is revered and not the ownership of the knowledge. This is a key point in intellectual property as China is excited by its knowledge economy and the sharing of ideas and transmission of expertise and does not therefore view the ownership of rights as anywhere near as important.

Bear in mind that this cultural view has not just sprung up, it has developed slowly over 5000 years. Anyone who has tried to change the culture in even a three person organisation that has been trading for a year knows how challenging it can be to change cultures so imagine trying to change the inherent culture of a nation such as China. Quite simply it is not going to happen and you would be fool to even think about it.

This means therefore that those wishing to do business with China must adapt. The Chinese themselves, being a hugely adaptive nation and people, have sought to understand the importance of IPR in Western culture and adjust their behaviour accordingly.

Drastic changes have been occurring in China recently in regard to Intellectual Property laws and practice. The number of courts is increasing, the number of cases and the number of prosecutions too. There is of course still a long way to go but the more business that is conducted between China and the West, the more collaborative agreements that are struck, the more it becomes likely that an implicit cultural understanding will form over time.

In conclusion it is vital to point out that yes your IP is precious and yes it has value to you but you will need to make potential short term allowances as part of your long term investment of time and money in China. Please do not make the mistake of being overtly suspicious and guarded, at first glance it may look like the Chinese are potentially choosing to deliberately ignore IP practices for their own gain but it runs much deeper than that. In time a new culture will emerge and progress towards this is already underway.

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Article Tags: attitudes, challenges, chinese challenge, chinese culture, doing business with china, intellectual property rights, ip rights



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