China: Intellectual Property Protection

Dr. Eugen von Keller, Jian Wei, Hubertus Drinkuth

2005

Protection of intellectual property in China has become a major global business challenge. Counterfeiting today includes not simply consumer media and packaged goods but sophisticated manufacturing products. As a result, global supply lines contain increasing numbers of substandard components, creating serious performance and liability issues for corporations and consumers worldwide.

Like it or not, multinational manufacturers in China must learn to play the Intellectual Property (IP) protection game. As in Weiqi, the enduring Chinese board game (known as Go in Japanese), high stakes players must proactively defend their assets rather than rely on reactive remedies. A strategic game of infinite possibilities, Weiqi has been embraced by Chinese Emperors, modern business leaders and world-class mathematicians. The Game of Enclosures rewards those who think quickly and act decisively, prioritizing certain territories and configurations above others.

This China Nexus report looks at intellectual property protection in China from this strategic point of view, surveying current practices of MNCs in China before outlining comprehensive, multi-faceted mechanisms for deterring industrial piracy. We thank the MNCs and executives in China who participated in our survey and accompanying interviews. Of course, we at Roland Berger are solely responsible for any errors or misinterpretations.