vague and is opened to subjective interpretation. These uncertainties have led to very weak judicial enforcements and infringers have frequently been overlooked due to the lack of legal enforcements. Furthermore, there is often corruption occurring between the infringer and the authorities which plays a factor in the issue. Reason for growth in counterfeit market The reason for such strong growth within the counterfeit market is due to the high profit margins. As production costs are very low, replicating well-known brands will allow you to sell the products at premium prices. An example of this is UGG Australia and Coca-Cola. UGG is a well-known American boots brand made from Australian sheep skin. The designs of the boots are very simple and the most valuable part is the sheep skin. Chinese infringers can easily replicate these boots using another form of cheaper material and sell it for a premium price under the brand name UGG. However, for brands such as Coca-Cola, replication is not profitable. Replication of their recipe will require very costly research and testing. Furthermore, coke's prices are already very competitive within the soft drink market, thus replication of coke cannot be sold at a high enough price to generate profit. Due to the minor consequences and ambiguity of Chinese laws, there is no fear created within the community to minimise the sales and production of counterfeit
goods. A Chinese government house has been built to replicate the American White House. This provides a bad example to infringers as the leaders of China are also replicating American goods, so why shouldn't they profit from doing the same? Better Policy The best way to overcome these issues in the long-term for China is education, zero- tolerance policy and cooperation with the government . Correctly educating children at a young age, allowing them to discover their creative side and giving them the freedom of thought, and will also allow them to realise that 'copying' is the wrong thing to do. This will be the best prevention to IPR issues. A zero tolerance policy will stop the ambiguity of the laws and will strongly enforce IP protection. Companies investing in China will usually need to prepare additional human capital and financial resources to protect themselves from infringement issues. By having stricter policies on IPR protection, this issue will stop as foreign investors will not need to worry about leaking secret information. Furthermore, by supporting IPR protection, China is actually supporting creativity, inventions and innovation within their economy. DIRB
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