China Theft of Intellectual Property
This entry was posted on 7/9/2006 4:30 PM and is filed under Intellectuatl Property.
Letters of Marque were issued by various governments to legalize piracy in the furtherance of a nation's economic as well as military and political interests. They were discontinued by agreement of most trading nations in 1856, but a modern form has developed. International pirating of intellectual property has become a vast and growing problem. The growing size and sophistication of the counterfeiters aggravates the costs to the owners of the property.
It has been pointed out that a good solution is vigilance by the private sector. This is certainly true. In the United States the most effective method of enforcement is by private litigation. The problem is that certain countries, specifically China, have developed an enormously profitable counterfeiting industry. According to U.S. Customs, China was the number one source of counterfeit products, accounting for 68% of all seizures.
Local governments in China reap enormous profits from pirating, either directly from pirating by state owned industries or indirectly through growth of the local economies or tax revenues. Although there have been some improvements in China's laws, there is little possibility that either Chinese law, international agreements or private enforcement will be effective as long as governments are the beneficiaries.
Since a legal disincentive is ineffective, a better solution would be an economic one. Over 42 countries have added small taxes to blank recording media to provide royalties. If a tariff were imposed on the goods from offending nations to compensate the victims of piracy, governments would have a strong economic incentive to stop the practice. Until such disincentives are in place, preventing piracy will be as successful as preventing the drug trade.
