China's IPR issue shall not be overplayed: Autodesk executive

Software company should focus on meeting customers' needs instead of banging them on the head for intellectual property right issues when exploring the huge market of China, a senior executive of global software giant Autodesk said.

Autodest Senior Vice President of Worldwide Sales, Ken Bado, said in a recent interview with Xinhua that intellectual property right (IPR) is just a tool that has to be used wisely. In China market, which is of strategic importance for the company's global outcome, Autodesk has derived business growth from offering value to local customers, not by "calling the policy" to check software licenses.

The Los Angeles-based CAD (computer aided design)software supplier has been ranked as the most valuable IT company on the US stock market as its stock prices surged 213.8 percent in 2004.

More than 60 percent of the company's business are performed outside the United States, with China and East Asia being its new growth bases. Bado said China, a booming market that may drive up global demand for investment in technology over the next 5 to 10 years, offers all kinds of opportunities for Autodesk in the areas it specialized in.

"Manufacturing, infrastructure, building and entertainment -- all these sectors are of great interest to us," Bado said.

China, the global manufacturing capital, has drawn investment from most of the world's top 100 companies, all customers of Autodesk. Meanwhile, as China becomes a busy construction site for such large-scale projects as the Beijing Olympic Games and the World Expo in Shanghai, Chinese infrastructure developers and building contractors are in desperate need to CAD software. Bado noted that in 2004, marketing sales in China's mainland soared more than 50 percent over the previous year, topping the company's global growth of 30 percent.

The success was achieved with a win-win partnership that Autodesk forged with its Chinese customers. The company has more than 6 million registered users of its software worldwide. But Bado estimates that the actual number of Autodesk software users could exceed 20 million.Some of the intellectual property right infringement are intentional. But in most cases, people are not aware that they need a license to copy the designing tools. Autodesk regards these huge group of users aits potential customers.

"We won't go to the customers and hit them on the head and say 'bad, bad,'" Bado said.

Instead, Autodesk turned its focus on developing a long-term partnership with Chinese software developers and customers. The company developed an installed payment scheme specially for Chinese market. Local company can obtain all necessary licenses for the use and upgrading of Autodesk software at once and pay the cost in installments over a period of time.

The scheme proved to be effective in encouraging Chinese companies, mostly small- and medium-sized businesses, to adopt authentic software. For example,more than 1,000 companies in Taizhou city, a manufacturing base in east China's Zhejiang province, signed up for licensed software and services of Autodesk in 2004. According to Autodesk estimates, piracy rate of its software in China is 92 percent. However, Bado said it is only one side of the coin. Since piracy is a common problem faced by Autodesk in all continents, it is important to take an appropriate approach to address the issue. He noted that piracy rates in the United States is 30 percent, while Japan is of a similar range.

A survey released by the US Business Software Alliance on May 18, the value of illegal software in Europe and the United States are the highest, with the per capita loss reported there far surpassing that in the Asia-Pacific region.

Though IPR enforcement is a tool for many international software companies, it will not solve the problem from the root. Bado said the key lies in Chinese companies. As China develops its own software industry, IPR protection will become a crucial issue.

"Chinese companies has gone beyond being the source of manufacturing for international companies," Bado said. "They want the quality and technology that they can compete with on global market."

As Autodesk released a series of new products on a Customer Day event held in Beijing last weekend, 642 Chinese companies showed up though only 500 were invited.

In order to melt into the looming technological boom in China, Autodesk has set up a regional headquarter in Beijing in 2004, following the establishment of an application technology development center in Shanghai. It tried to localize such state-of-the-art products as the tools used to design the Freedom Tower on the site of former World Trade Center in New York by setting up an joint venture laboratory in northeast China's Harbin city.

All these things have been done as Audodesk works with the Chinese government to enforce intellectual property rights. "It's a tactic called stick and carrot," Bado said.

He is optimistic that things are improving now. Official statistics show that Chinese authorities have nipped 24,189 cases of trademark infringement and seized more than 167 million pieces of pirated softwares and audio-video products since the country launched a massive crackdown on IPR violations last September.

So far, China has destroyed 24 illegal CD production lines and closed down 2,960 illegal printing workshops.

In addition, China is planning to spend 20 years to complete the legislative process of IPR laws and regulations that Western countries took more than 100 years to accomplish.

"It's not going to happen overnight," Bado said."We are going to work with Chinese companies in partnership to improve license appliance over the next five to ten years."

According to Chinese Ministry of Commerce, sales volume of China-made software increased five folds to 220 billion yuan (26.6billion US dollars) from 1999 to 2004, while software exports grew eleven times.

Source: Xinhua