The true context to globalization is the intellectual property (IP) debate. As industries redistribute their sales and manufacturing throughout the world in search of both new markets and increased productivity, it’s inevitable that cultures are going to clash. That’s at the heart of the IP issue: from a Western perspective the need for IP protection is a no-brainer—the ability to protect ideas enables companies to move forward in developing and capitalizing them in anticipation of a return on that investment.
But once you leave Western Europe and North America behind, the waters get murkier. IP protection isn’t nearly as embedded in the culture of business in other parts of the world, particularly in Asia, where Western notions of IP are regarded as vestiges of colonialism, and in Eastern Europe where tribalistic lawlessness has become rampant.
The question becomes, can Western companies export respect and acceptance of IP protection before it’s eroded by exposure to cultures where it’s not part of the cultural and legal landscape?
That’s a broad and philosophical question that’s going to find its answers largely out in the streets. Governments can promote respect for IP, and they can enact countermeasures ranging from tariffs to litigation. But governments respond only to noise from within. The first actions come from the aggrieved.
That’s what happened at the Pro Light & Sound Exhibition in Frankfurt earlier this year. Dutch rigging and truss maker Prolyte Products Group found that a Chinese company, Guangzhou Kingway Performance Equipment, had not only illegally copied its product designs but was also using Prolyte’s own promotional materials to hawk those wares. Prolyte promptly filed a claim locally asserting copyright infringement—the promotional materials—and received a preliminary injunction against Guangzhou Kingway, which had those materials as well as banners from its two trade show booths promptly confiscated by local authorities.
Marina Prak, Prolyte’s marketing manager, said in a statement, “Copyright issues and intellectual property rights have become a big issue for our industry. Facing the fact that companies not only steal your ideas or copy your products, but also boldly use your own pictures and drawings is frustrating. It is crucial to fight counterfeiting right from the start. Infringers… often retreat if they encounter resistance and go for an easier target. Hopefully the forceful proceedings at Frankfurt will send a clear message.”
There’s two points worth making about this incident. The first is the willingness of authorities to prosecute or even address IP theft. Prolyte was quick, tenacious and lucky. You’ll need all three if confronted with a similar situation. I found a link on the U.S. Department of Justice Web site that provides some insight into what motivates prosecutors in these types of cases. You can read the whole story at www.usdoj.gov/criminal/cybercrime/usamarch2001_1.htm, but a critical part tells when a prosecutor may properly decline to take action despite having admissible evidence sufficient to obtain and sustain a conviction for a federal crime: “When no substantial federal interest would be served by prosecution; when the person is subject to effective prosecution in another jurisdiction; or when there exists an adequate non-criminal alternative to prosecution.”
These are the barriers to getting prosecutorial cooperation. Understand them and address them. What they’re saying is: do make a Federal case out of it; do stress that even though pirates might be subject to prosecution in their home jurisdictions, that doesn’t mean they will be, and that anything less than criminal prosecution will undermine future deterrence.
The other point is less strident because it’s also less black and white. Globalization makes strange bedfellows. As destructive as Asian knock-offs can be, the cost savings offered by offshore manufacturing do offset those losses to a degree. Furthermore, as Chinese manufacturers transform themselves from OEM partners to branded competitors, they’re going to find themselves in the same boat as their Western counterparts sooner or later.
Chinese President Hu Jintao’s meeting in April with President Bush was preceded a few days earlier by a meeting with another American leader—a conversation that quite possibly had more substance. I’m not sure what Microsoft founder and CEO Bill Gates had to say to Hu about human rights, but the Chinese leader likely got an earful about software piracy from the guy who pretty much put software on the map. According to Forbes, 90% of all software used in China is pirated—much of it used, asserts U.S. Commerce Secretary Carlos Gutierrez, by the Chinese government itself.
Earlier in April, Beijing announced it would establish a center to handle IP abuse complaints involving Chinese companies or individuals. One would like to think that persistent pressure from IP-rich economies and governments precipitated this move. But the reality is, it has more to do with the fact that China, which will host the next international Olympics in 2008, is finding out how much piracy can hurt. Its government-sanctioned mascots, the Five Friendlies, are already being counterfeited, costing the government millions of dollars in lost revenue.
Self-interest is the greatest motivator of them all. What Prolyte did in Frankfurt is the kind of immediate and visceral response to the problem of IP theft you can get—they were basically mugged at a trade show and they yelled for help and got a cop. At the next show, it might be a good idea to get some stuffed Olympic pandas and display them prominently at your booth.
