Piracy poses a threat to trade between U.S., China

American groups decry defiance of copyrights

September 17, 2004|By NEW YORK TIMES NEWS SERVICE

BEIJING - It looks like the edition of Bill Clinton's memoirs in American bookstores. It is in English, has a glossy cover with the same photo of the tanned, smiling former president, the same bronze-tinted title, and a spine announcing its publisher to be Knopf.

But the shrunken print, tissue-thin paper and smeared black-and-white photographs inside betray its true identity - a pirated copy of the former president's book, My Life, printed just weeks after the original appeared in the United States, and sold by roadside hawkers for as little as $5. The book retails for $35 in the United States.

The bootleg is another example of the widespread defiance of copyrights and patents here, a problem that two leading American business groups said yesterday threatened to chill American trade with China.

In an otherwise encouraging annual report on American business in China released yesterday, the American Chamber of Commerce in China singled out lax intellectual property right protection as the Achilles' heel that might cripple investor confidence.

"There's virtually no enforcement" of intellectual property rights in China, Charles Martin, president of the chamber, said at a news conference. "It's worsening, and there's now a flood of counterfeit exports."

Myron Brilliant, a vice president of the U.S. Chamber of Commerce in Washington, said his organization's annual report on China, to be released next week, would also single out China's intellectual property abuses as a key threat to American businesses.

"We see ourselves as friends of China, but our patience has its limits," Brilliant said in an interview. "The time is ticking for China on this front." Brilliant is in Beijing this week to press Chinese officials for stronger protection of industrial designs, patents and commercial secrets.

Violations of intellectual property rights have long irked Americans doing business in China, but both American business organizations emphasized that their members' impatience over the problem had reached new heights. Brilliant said top executives had often raised the issue with him.

"That's a sea change," he said. "Before, this was just an issue for Hong Kong and China reps, but now it's the CEOs of major companies who are complaining to us."

Business executives said two recent decisions by China particularly threatened to dampen international investor enthusiasm.

One was a decision by China's patent office to override Pfizer's patent for its best-selling impotence drug, Viagra, arguing that the original patent did not adequately explain the drug's technical uses.

That was followed by the Ministry of Commerce's dismissal of a complaint by General Motors against a Chinese carmaker, SAIC Chery Automobile, which makes a car strikingly similar to GM's Spark.

Nonetheless, the reports from both chambers of commerce say that China has made progress in the last year in opening its markets to international investors and clarifying commercial rules.

Last year, American businesses invested more than $4 billion in China. But America's trade deficit with the country has swelled, reaching $39 billion in the first seven months of this year, according to Chinese customs statistics.

The trade gap is likely to spur American trade officials and businesses to push for faster and decisive action from China, including harsher criminal penalties for bootleggers and speedier court injunctions against manufacturers of pirated goods. If protections are not improved, Brilliant said, his organization may ultimately press for government legal action under U.S. trade law and China's commitments to the World Trade Organization.

"We're getting a lot of pressure from American business," he said. "Time is running out and we have to see movement this year."

The U.S. Chamber of Commerce is opening an office in Beijing to monitor China's efforts on intellectual property, and is working with Japanese and European business groups to press China on the issue.

Meanwhile, the hawker selling President Clinton's memoirs opposite Beijing's World Trade Center, who gave only his surname, Li, said he could not read English and had never heard of a more recent political best seller, Kitty Kelley's book on the Bush family.

But he said he was sure pirated copies would be available soon. "If it's that popular," he said, "then wait a few weeks and come around here and find me."

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