Chances are the latest Adidas t-shirt you just bought has a 'Made in China' tag on it. No matter what aspect of modern day manufacturing one looks into, China is the land of promise. Organizations all over the US and Europe are investing millions of dollars in outsourced production centers in China, but piracy and counterfeiting is still the biggest concern for organizations. In 2006, US industry lost nearly $512 billion dollars due to piracy and counterfeiting. Today, everything from fake Gucci handbags to spurious car parts are being produced in China. China is home to nearly 2/3rds of the world's counterfeit and pirated goods market, and IP (Intellectual Property) rights violation is rampant in China.
The reason why counterfeit products are so cheap is because counterfeiters can skip investing in R&D (Research and Development) and copy patented products and techniques, thus mass produce products for less. A company manufacturing cheap imitations has to spend nothing on advertising, brand building and quality control. Unfortunately, IPR (Intellectual Property Rights) are being violated in every imaginable field of production, and even printed products like books are being counterfeited in China. Given China's current scenario, hiring IP attorneys is just one of the legal measures that organizations can take to protect their investments. China's legal system is unusually slow, and even though the Chinese government has setup an IPR protection work group to handle IPR violation cases, a lot more has to be done to prevent further damage to overseas investors. Almost all major MNCs in China have a team of IP attorneys, but there are other more intuitive measures being taken by companies to discourage counterfeiting.
Below is a list of steps being taken by companies to keep spurious products at bay: Staying ahead of imitators Large organizations simply 'outpace' imitators by introducing new products and improving products on a regular basis. By the time imitators catch up with an existing product, companies have already introduced a product that has better quality or is an improvement over the existing product. A good example of the above mentioned concept is mobile phones.
By the time a low cost imitation of a mobile phone is ready, manufacturers like Nokia and Motorola have already introduced an improved product or a higher model. In essence, a buyer has no motivation to buy low cost imitations as a better product is available. IPR violators have been forced to invest in R&D and come up with their own mobile phones and there are numerous low cost Chinese mobile phones available in the market (that have nothing to do with their bigger counterparts).
This is why people looking for cheap mobile phones prefer buying Chinese made mobile phones. Releasing products at a rapid pace allows larger organizations to keep imitators at bay, and ensures that customers buy cheaper products only by choice. The biggest factor in favor of larger organizations is the quality after sales service provided, making a consumer's investment in a product worthwhile. Manage imitations It is not uncommon for Chinese imitators to produce products that are so superior in quality, that even the OEM manufacturer is impressed by the quality of the imitation.
In fact, larger organizations have already started offering their Chinese counterparts licenses to manufacture their products. Imitators are more than happy to have the opportunity to produce licensed products without living in fear of litigation. A local company has much better knowledge of how the Chinese supply chain works, and can acquire local labor much faster than overseas investors. Most companies prefer employing a 'wait and watch' approach before they decide on entering into a JV (Joint Venture) or strategic partnership, but there is no denying that licensing production is an effective way to ensure fewer spurious products are produced. To learn more about IPR and to hire IP attorneys in China visit www.greatwallip.
Nathan Martyn is the author of this article on China Patent Agents and IP Attorneys. Find more information aboutChina Patent Agents and IP Attorneys here.