Do you really know what the current landscape looks like vis-à-vis IP (intellectual property) protection in China? Take this short quiz to find out.

1. You can protect your IP if you’re a software developer by implementing the same measures that you have implemented for the U.S. market.

[ ] Yes
[ ] No
[ ] Don’t know

2. Software companies are involving their Chinese outsourcing partners much earlier in the development process.

[ ] Yes
[ ] No
[ ] Don’t know

3. Software companies still aren’t quite sure what to do vis-à-vis IP protection in China.

[ ] Yes
[ ] No
[ ] Don’t know

4. Foreign IP holders won the majority of the cases filed by copyright holders suing Chinese individuals and companies over the five years from 2002 through 2006.

[ ] Yes
[ ] No
[ ] Don’t know

5. IP protection will, over time, not be an issue for doing business in China.

[ ] Yes
[ ] No
[ ] Don’t know

If you answered “yes” to all of the above, then you are up-to-date with some of the current trends in IP protection in China today. During the LISA Forum Asia in Beijing last week, international engineering executives from Nokia, Cisco, Microsoft, Adobe, Palm Computing, HP, IBM and TIBCO Software all confirmed that they are building teams with ownership for global products and integrating their in-country teams, along with their Chinese outsourcing partners, earlier and earlier in the development cycle. At the same time, some are still a bit nervous about whether their IP will “walk out the door” to appear under another’s brand at some point.

To enable LISA Forum participants to make more informed, and therefore more intelligent, decisions about IP protection strategies for China, Elizabeth Chien-Hale, (Founder and Director of the non-profit Institute for Intellectual Property in Asia and a practicing lawyer in California) created and led a special one-day seminar and a keynote panel. During the LISA Seminar on Intellectual Property Management Differences: China vs. the West, Microsoft Counsel Haitao Wu, SuperMap GIL Technologies Counsel Dr. Lili Zhang and Beijing Sursen Co., Ltd. Counsel Xin Zhao provided their perspective from the private sector. The public sector was represented by Mark Cohen from the U.S. Embassy and Hongju Yang from the Chinese Patent Office. Sanjay Prasad, former Oracle Counsel and currently Vice President and head of India Operations for IPVALUE Management, shared a roadmap for how to develop a global patent management strategy.

During the keynote on IP protection, Intellectual Property Management Differences: China vs. the West and Its Impact on the Globalization Industry, Dr. Jan Gronski (Director of Cisco Systems [China] R&D Co.) reminded all of us that it hasn’t been that many years since IP was shared much more than it is now in the U.S. According to Dr. Gronski, “In the early days of ARPANET (the predecessor of today’s internet) and of software development teams, you were considered somewhat anti-social if you did not share your ideas and possible solutions to the current challenges. In fact, you were often shunned if it was perceived by your colleagues that you were withholding information.” Monetary value (and legal teams) were only applied much later to IP in the software arena. As China continues its current rate of patent awards, the value of its own IP is increasing, thus exerting increasing pressure to respect the concept of monetizing IP.

NOTE: If you are a LISA Member, click here for a copy of Dr. Gronski’s presentation in Beijing last week, Intellectual Property Protection in China: Lessons Learned. (You must log in first as a LISA Member. Scroll down to click on the following title: Intellectual Property Management Differences: China vs. the West and Its Impact on the Globalization Industry.)

The consensus among these executives was that, over time, IP protection would cease to be an issue for doing business in China. If one steps back and observes the environment objectively, it quickly becomes obvious that most of the problems and lawsuits filed involve the pirating of DVDs, CDs and luxury goods, rather than software products.

Judge Yong-Shun Cheng, Director of the Beijing Intellectual Property Institute (BIPI) and previously Judge of Commercial IP for the Beijing High Court, was one of the first judges to hear IP cases in China. He is now one of the world’s most-respected IP practitioners, based on his extensive experience ruling on cases involving patents and copyrights in China. During the keynote, Judge Cheng explained in detail how the current system works in China.

Since entering the WTO (World Trade Organization) a few years ago, China’s IP system has been under the world’s spotlight. According to Judge Cheng, great legislative progress has been made over the last 20 years, but enforcement still lags. It will also take more time to educate the population as to the benefits to be gained through abiding by the system.

As an example, foreign IP holders won the majority of the cases filed by copyright holders suing Chinese individuals and companies over the five years from 2002 through 2006, after China entered the WTO.

Judge Cheng also explained why corruption no longer has much affect on the outcome of patent/copyright cases filed in China. “The government has arrested and prosecuted high profile judges when there have been problems. Rather, it’s more an issue of how the new laws are to be applied and the fact that judges require time to build the case law necessary to ensure impartial decisions.”

BIPI is now preparing to comment and provide opinions on the updated copyright law that was recently passed in China. And, if you are involved with the pharmaceutical industry, you can’t afford to miss the event that BIPI will be running during the first week in May on patent protection for that industry in China. Send an email to Judge Cheng’s colleague, Ms. Rong Li at lirong@bipi.org if you are interested. If you read Chinese, check out the BIPI site at www.bipi.org for more details.

NOTE: If you are a LISA Member, click here for a copy of Judge Cheng’s presentation in Beijing last week, Intellectual Property Litigation in China. (You must log in first as a LISA Member. Scroll down to click on the following title: Intellectual Property Management Differences: China vs. the West and Its Impact on the Globalization Industry.)

Stay tuned to this space for a comparison of intellectual property management between China and India, along with recommendations on how to effectively mitigate risk when managing your IP in China.