From Pirates to Partners (Episode II) : Protecting Intellectual Property in Post-WTO China

In "From Pirates to Partners: Protecting Intellectual Property in China in the Twenty-First Century," I criticized the ineffectiveness and short-sightedness of the American foreign intellectual property policy toward China. As I argued, the coercive approach taken by the U.S. administrations created a "cycle of futility" in which China and the United States repeatedly threatened each other with trade wars, only to back down in the eleventh hour with a compromise that did not provide sustained improvements in intellectual property protection. Since I wrote that article five years ago, China has joined the WTO and undertook a complete overhaul of its intellectual property system. Because of China's WTO membership, the United States can no longer impose unilateral sanctions on the country concerning the lack of intellectual property protection, as it threatened to do a decade ago. Instead, the United States has to resolve the dispute through the mandatory WTO dispute settlement process. This article begins by challenging the conventional view that the intellectual property law amendments China introduced in the wake of the WTO accession were mostly adopted to conform Chinese intellectual property laws to WTO standards. It argues that many of these amendments were created as responses to China's rapidly-changing local conditions. In addition, the article explores the recent proposals for the U.S. administration to file a formal complaint with the WTO Dispute Settlement Body over inadequate enforcement of intellectual property rights in China. It articulates five reasons why the United States should not do so. The article then explores alternative protection strategies by presenting six hypothetical case studies in which intellectual property rights holders were able to protect their assets even when intellectual property laws were not effectively enforced. It questions the effectiveness of the legalistic approach usually taken by foreign businesses and explores the differences between the Chinese and Western legal cultures. The article concludes by examining the progress China has made in the intellectual property arena by focusing on three widely-reported legal disputes: the unauthorized reproduction, adaptation, and distribution of "Harry Potter" novels; the State Intellectual Property Office's decision to invalidate Pfizer's patent in Viagra; and the Chinese authorities' heightened efforts to protect trademarks in the run-up to the 2008 Beijing Olympics