Is copyright war on horizon?

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Last updated at: (Beijing Time) Saturday, October 25, 2003

Is copyright war on horizon?

Many businesses are worrying that a multimillion-dollar intellectual property rights war is looming after a spate of lawsuits over alleged infringements in recent months.

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Many businesses are worrying that a multimillion-dollar intellectual property rights war is looming after a spate of lawsuits over alleged infringements in recent months.

Late last month, the Beijing-based New Oriental Education Group, China's leading private English language school, was ordered by a local court to pay 10 million yuan (US$1.2 million) in compensation to two US plaintiffs for copyright and trademark infringements.

In mid-October, the China Music Copyright Society lodged a claim against TCL, one of the country's largest mobile phone manufacturers, for 12.8 million yuan for the unauthorized use of music under copyright protection. The case has yet to be decided.

Meanwhile, Guangdong-based Kelon Electric Appliances Co has decided to take legal action against Haier and Xinfei, both name brands in the Chinese home appliances market, for copying the patented designs of its refrigerators. Kelon is seeking 10 million yuan in compensation.

The case, the first of its kind in China's refrigerator industry, is scheduled to go to court in Foshan, Guangdong Province, in November.

"As an imminent IPR and patent war is looming large, domestic companies should learn to do business in the long term," said Professor Zhang Chu, a noted Beijing expert in IPR law. "You may make some money by infringing upon others' copyrights and patents in the short term, but sooner or later you will have to pay dearly for it.

"Many local enterprises lack IPR and patent awareness, and have ignored the protection of patents and copyrights for years," said Zhang.

In january 1997, industry and business administrators in Beijing confiscated from the New Oriental Education Group illegal copies of original test questions of the US-sponsored TOEFL, GRE and GMAT exams. The group confessed to its copyright infringement in a written document, but failed to stop the practice.

Some law experts acknowledged that it is quite common for businesses at home and abroad to do business with the unauthorized use of copyrights, patents or trademarks, though they know it illegal.

Chinese manufacturers of DVD players have to pay additional US$4.50 for each DVD player they produce to Hitachi, Matsushita, Toshiba and other foreign firms which own patent rights on essential technologies.

To date, they have paid a total of 3 billion yuan in patent licensing fees.

Quite a few domestic firms have incomplete and incorrect understandings of the law. In New Oriental's case, the most controversial point lay on the issue of whether used test questions should enjoy the copyright protection.

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