China Licensing and intellectual property

China Licensing and intellectual property - China:...

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1 China: Licensing and intellectual property EIU ViewsWire . New York: Feb 16, 2007 . Abstract (Summary) Basic laws. » Jump to indexing (document details) Full Text (6427 words) (c) 2007 The Economist Intelligence Unit Ltd. All rights reserved. Reproduced with permission of the copyright owner. No further reproduction is permitted. China: Licensing and intellectual property COUNTRY BRIEFING FROM THE ECONOMIST INTELLIGENCE UNIT Under China's regulations on technology imports, foreign companies with patents, trademarks or other intellectual property are free to enter into licensing agreements with local companies. Licensing, used mainly for technology or trademark-related products, has the advantage of limiting a foreign company's exposure, since it need not set up an office or a joint venture. However, a licenser has less control over how its product is priced, marketed and distributed. Furthermore, in practice, uncertainty over China's protection of intellectual property and shifting Chinese priorities and policies can undermine deals with Chinese enterprises. Moreover, problems frequently arise in China because of fundamental differences between foreign licensers and potential Chinese licensees concerning the boundaries of technology transfer. Although Western firms tend to view a licensing agreement as an on-going relationship between licenser and licensee, the Chinese often see technology as a commodity to be purchased and then used freely. Government policies in this area are in the Regulations for the Administration of Import and Export of Technology, which came into force on January 1st 2002. Few issues concerning business in China in recent years have had as high a profile--or been as contentious--as piracy and the protection of intellectual-property rights (IPR). Although this continued in 2006, there were some encouraging signs, suggesting a growing awareness of the problem and a sense that China's shortcomings in IPR protection may be causing serious damage to the economy. One important recent case concerned Pfizer , a giant US pharmaceutical company. A decision by the State Intellectual Property Office (SIPO) in July 2004 against Pfizer dismayed some Western observers. The Chinese regulator said that the company was not entitled to protection from 12 Chinese producers of a generic version of Viagra, Pfizer 's blockbuster drug. SIPO initially granted Pfizer a patent in 2001, which was to have expired in 2014. SIPO ruled that Pfizer 's patent for the active ingredient in Viagra was invalid in China because the company had not adequately supported its claim that the drug was patentable. Pessimists felt that the decision was merely the latest case in which a Western firm with a legitimate concern about piracy in China was either ignored or put at a disadvantage. More-optimistic analysts said that the decision represented a critical victory in the ongoing battle to make China a country ruled by laws rather than by relationships. They noted that it
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China Licensing and intellectual property - China:...

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