Substantial IP infringement turning off initiatives of MNC to launch a business in China

Counterfeiting IP in China is considered a serious threat by foreign businessmen. Statistics show that from 2001 to 2004, there had been 113,000 cases that involved counterfeiting of trademarks, among these, 12,000 cases were of faking foreign trademarks. Besides trademarks, copyrights, engineering designs, patent, trade secrets are also the targets of counterfeit makers. Hence, starting a business in China requires registration of trademark and other IP. The number that denoted trademark registration in 1982 was 1,565 that rose to 20,000 in 1993 and exceeded 60,000 in 2004.

Conducting business in China faces following significant challenges -

• IP Infringement remains an alarming challenge for those MNCs who intend to start a business in China . This prevailing factor is a serious menace for conducting business in China, as the investors are vulnerable to intellectual property infringements and piracy. Fake products/services or IP degrade the reputation of the actual products or IP by using the recognition in market. For instance, copying of branded international assembled cars, parts of automobiles, electronic goods, appliances, pharmaceutical products such as medicines, cosmetics etc.

• Sudden change in economy, government policies have changed the market scenario rapidly. Hence, conducting business in China requires accurate market feedback to change the China business strategy accordingly. Taking help from corporate investigation China agencies to get the most current data and facts of market is necessary for planning flawless China business strategy .

• Low cost operations, low prices take local manufacturers ahead of foreign counterparts, which make foreign businessmen confront an intimidating challenge to compete the local traders.

• Cultural barrier is another hard challenge, faced by the investors from the west. Along with sound understanding in language, political aspects, being knowledgeable about the history, culture, society with expertise benefits a great deal in starting a business in China .

Endless genre and amounts of products are being counterfeited, distributed, being sold and even cross border to be sold in other countries. Hence, protection of IP requires efficient corporate investigation China programs to detect and seize them. Intellectual properties are being protected by following measures -

• China has reinforced the regulations of IP by agreement with WTO and TRIPS.

• Prevention of IP through expert corporate investigation China programs by agencies.

• China employs its enforcement system, custom, governments to detect, seize and penalize counterfeiters from selling further, in and outside China.

• US companies who find their products are being infringed can contact the US mission in China or the Department of Commerce in Washington for help.

Taking protective China business strategy to prevent infringement will encourage more pharmaceutical companies to invest in China. In spite of the advantageous pharmaceutical regulatory service in China, infringement of medicines is putting off the plans of many pharmaceutical companies from the west.

Using the pharmaceutical regulatory service of China, agreement with WTO have brought top 20 companies to venture in China and conducting research and development. Following reputed companies have set up and doing R&D in China -

• Pfizer has sold more than 40 medicines and invested more than $500 million in China.

• GlaxoSmithKline with more than 2000 staffs in China has sold drugs in more than 60 Chinese cities.

• Novo Nordisk has set up an R&D center in Beijing, that values $10 million.

• Lonza of Switzerland has also spread in Guangzhou of China

Advantageous low cost and disadvantageous IP infringement rule the market of China

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