China may be making strides in combating intellectual property theft, but it isn?t immediately obvious from the statistics. Of all the fake and counterfeit goods seized by the U.S. Customs Department, 72 percent originated in China.

?Local protectionism of IP rights violators is rampant in China,” said Sebastian Wright, an international trade specialist at the U.S. Department of Commerce?s Office of Intellectual Property Rights. ?U.S. companies are extremely frustrated with China?s enforcement of IP protection laws.?

Nowhere is this more obvious than in the electronics industry, where some companies have avoided setting up anything but a sales office for fear that trade secrets would be stolen, reproduced, and then sold competitively against the company that created the IP. But while China is the most obvious violator, it?s not the only one. Wright said during a Webcast Wednesday that 7 percent to 9 percent of all world trade currently involves fake and counterfeit goods, and that piracy is ?rampant? on a worldwide scale. Other countries that rank high in the counterfeit trade are Russia, Brazil and India.

Wright said while the U.S. government does its part, particularly in connection with making sure that foreign countries follow through on pledges to crack down on IP theft, it?s also up to U.S. companies to understand the laws and take precautions whenever possible. ?IP rights are a private right that businesses have to enforce themselves.?

Patent and trademarks are generally territorial, and only valid in the countries in which they are filed. The federal government?s Strategy Targeting Organized Piracy (STOP) strongly recommends that businesses in the U.S. file for IP protection not only in the United States, but also in other countries such as China.

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Filed under: Security - @ June 25, 2006 5:03 am