U.S. Attache: Piracy in China Hurts Growth

Renee Montagne speaks with Mark Cohen, a lawyer working for the U.S. embassy in China, about his work fighting intellectual property rights infringement in China. He says rampant piracy hurts China's economic growth and has a negative impact on both Chinese and American businesses.

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RENEE MONTAGNE, host:

And the US government has sent one man to China to fight counterfeiting and piracy there. He is Mark Cohen, America's first ever diplomatic attache specializing in intellectual property. We reached him in Beijing and Mark Cohen told us China cannot become the economic superpower it aims to be without safeguards for intellectual property rights.

Mr. MARK COHEN: China has become the manufacturer of the world in many respects, but has yet to become the innovator of the world. In fact, in some cases there's a growing disparity between the two. They have huge economic growth but it hasn't resulted in patent filings overseas, for example, for many famous Chinese brands in overseas markets. So I think the government realizes there's a kind of a problem. One way to address that is by improving intellectual property protection. I think we have some problems sometimes with the way that is being done, but to the extent that we could talk about it, I think increasingly we can, particularly on a national level.

MONTAGNE: What about the Chinese government? It hasn't seemed to have had an interest, certainly up until recently, in really stopping this. Are authorities cooperating with you but overwhelmed perhaps?

Mr. COHEN: It's a very dynamic and complicated situation. Many people assume that since the problem is so rampant, there are no enforcement mechanisms or no laws, no resources committed to it. And one Chinese official, the minister of commerce, one time he gave an estimate of about 500,000 people involved in intellectual property enforcement in China. And the people say, `What are they doing? How can there be such a huge problem?' Well, really, probably the problem of misallocated resources rather than a lack of resources entirely. I think some of it is a problem in ethics, in the way people do business. And some of it is tied up in the legal system. It's not working. I mean, people--look at the way people drive in Beijing. Look at the problems with corruption. Can we expect intellectual property to be so different from some of the other legal challenges that China faces?

MONTAGNE: We do think of counterfeiting and piracy in China as a problem for the West mostly. But I gather in fact it's quite a problem for Chinese businesses.

Mr. COHEN: Yes, it is, particularly in those businesses that are the most vulnerable. I think it's very difficult for a Chinese movie producer or singer today in China. Chinese musicians, in particular, make their money primarily from performances, not from selling CDs. Software developers live, in many respects, in what you might call a one-copy country. You create one version of the software and the next thing you know, it's pirated all over the place. And it's very difficult for, I think, scientists and engineers who are trying to develop new products to work in this environment where the patents and their innovation may not be so respected. I mean, there's so much interest in ripping off others that products can have an extremely short shelf life before they're going to be knocked off. It's very, very challenging.

MONTAGNE: How does this problem affect the average American consumer? Clearly, companies are really concerned, but what about you and me?

Mr. COHEN: In America, it affects people lots of different ways. Counterfeit cigarettes, for example, can result in a very large loss in taxes as well as perhaps less safe cigarettes. Workers probably lose some employment, some jobs. Certainly, industries lose income which affects their ability to employ people or invest in R&D. And you certainly hear stories about lost technology because a product you were planning on unveiling at a trade show somehow someone reverse-engineered or trade secrets have been stolen. In addition to the way it affects you, it affects Chinese people quite severely and it affects people in the developing world and in other countries very severely.

MONTAGNE: President Bush is visiting Beijing next week. Do you expect the issue of intellectual property to come up in that visit?

Mr. COHEN: Well, it came up in a meeting in New York in September between the president and President Hu. And it was raised by the Chinese side, I think somewhat preemptively. This is an issue they're aware of and America's concerned about. Intellectual property has gotten higher and higher up on the ladder of bilateral trade concerns. So I would not at all be surprised if it was raised by the president.

MONTAGNE: Mark Cohen represents the US Patent and Trademark Office in Beijing specializing in intellectual property.

And tomorrow, we conclude with the conversation about fitting China into the global economy. This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

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