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Q & A: China piracy
Counterfeiting has become deeply entrenched in China's economy as a source of income for both small-time hawkers and powerful local tycoons.
Experts debate whether Chinese authorities are unwilling or unable to move quickly on the problem. Meanwhile, many companies are adapting their business tactics to fit conditions in China or are learning to live with some level of piracy.
Seattle Times business reporter Kristi Heim traveled to China for a first-hand look at counterfeit goods and the impact of piracy on China's economy. She answered your questions from noon to 1 p.m. today.
For more, read her stories:
The transcript of today's discussion is below. Thanks to everyone who participated.
Who are the people who ultimately buy these goods? Are they foreign tourists or Chinese?
If a foreigner buys an item which turns out to be fake, does the customs confiscate it?
But, interestingly, Customs says that travelers may be permitted one exemption for personal use (not for sale or distribution) every 30 days. Customs gives an example of permitting one purse with an infringing trademark.
I have heard of people who have brought back entire suitcases of fake items, but I certainly wouldn't recommend this. Also, a note of caution about quality: the fake goods might not work at all. See this "Princess Diaries" demo. One person who bought a fake DVD movie in China recently said it played two-thirds of the way and then simply stopped.
Luxury retailers estimate the "annual losses" due to fakes amount in the billions. However, their method of calculating such a number is rather sketchy - number of fakes sold multiplied by the retail price. This is highly inaccurate because of the number of assumptions associated in coming up with the supposed "losses"these retailers suffer. What would be a better way to estimate the "losses" or perhaps even benefits of buying and selling counterfeit goods?
Is it right for the U.S to insist on cracking down on counterfeiting in China, when it helps so many people?
If you are interested in those documents, they can be found here (not exactly light reading).
The main agreement is the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Basically China promised to improve its IP protection and enforcement, and the United States doesn't believe it has fulfilled its commitments.
Besides the WTO, China is also a member of the World Intellectual Property Organization, the Paris Convention for the Protection of Industrial Property and a number of other international agreements that attempt to protect various forms of intellectual property.
Why do the Asian countries get away with so much illegal piracy? For example, movies.
When the United States was first building its manufacturing economy, it could be accused of stealing intellectual property from Europe.
Now that the United States derives more of its jobs and economic growth from fields outside basic manufacturing, it has a vital interest in protecting intellectual property.
But Asia is changing, too. Japan and Korea started out copying products invented elsewhere, but now they have become more innovative than derivative. I'm not sure how relevant this still is today, but some argue that Asia, where Confucian values are deeply rooted, tends to value shared rights rather than individual rights and this influences the notion of intellectual property.
Here is some good information that I just received from a reader in Canada detailing products and countries that reported piracy problems last year.
Kristi, Do you get the impression that Chinese courts are setting any judicial precedents that will help US companies enforce their IP rights more effectively? Thanks.
What's the most absurd knockoff item you saw for sale?
There was a story of a farmer who unwittingly bought fake grain and became so despondent that he tried to kill himself. But he couldn't even do that because the pesticide he ate was fake, too. That one is probably just an urban legend.
Other countries also trade in counterfeit goods. Why does China seem to get all the attention (and blame) when it comes to piracy?
Piracy seems to flow from every industry including pharmaceuticals, can you address cases like Taiwan infringing on the Tamiflu patent, I remember reading about this in the fall?
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