Posted on: July 13, 2020 Posted by: Shaunak Parulekar Comments: 0
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Abstract

Intellectual Property refers to creations of the mind: inventions; literary and artistic works; symbols; names and images used in commerce. There are many types of intellectual property, and some countries recognize more than others. The most well-known types are copyrightspatentstrademarks, and trade secrets. The main purpose of intellectual property law is to encourage the creation of a wide variety of intellectual goods. To achieve this, the law gives people and businesses property rights to the information and intellectual goods they create, usually for a limited period. This gives economic incentive for their creation because it allows people to profit from the information and intellectual goods they create. These economic incentives are expected to stimulate innovation and contribute to the technological progress of countries, which depends on the extent of protection granted to innovators.

This article tries to expand upon the point that what are Intellectual Property Rights? For what reason must they be secured? And how does China practice the unlawful demonstration of Intellectual Property Theft among its other unfair trade practices? And how it is liable for the misfortunes endured by many notable organizations? This article additionally looks to enrol the various remedies accessible against IP theft.

What are Intellectual Property Rights?

Intellectual property rights are like any other property right. They allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their work or investment in a creation. These rights are outlined in Article 27 of the Universal Declaration of Human Rights [1], which provides for the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions.

The importance of intellectual property was first recognized in the Paris Convention for the Protection of Industrial Property (1883) [2] and the Berne Convention for the Protection of Literary and Artistic Works (1886) [3]. Both treaties are administered by the World Intellectual Property Organization (WIPO) [4].

Why promote and protect intellectual property?

There are several compelling reasons as to why the intellectual property should be promoted and protected, some reasons are:-

  1. The progress and well-being of humanity rest on its capacity to create and invent new works in the areas of technology and culture.
  2. The legal protection of new creations encourages the commitment of additional resources for further innovation.
  3. The promotion and protection of intellectual property spur economic growth create new jobs and industries and enhances the quality and enjoyment of life.

An efficient and equitable intellectual property system can help all countries to realize intellectual property’s potential as a catalyst for economic development and social and cultural well-being. The intellectual property system helps strike a balance between the interests of innovators and the public interest, providing an environment in which creativity and invention can flourish, for the benefit of all.

What is meant by Intellectual Property theft?

Intellectual property theft (IP theft) refers to the robbing of people or companies of their ideas, inventions, and creative expressions (i.e., their IP). IP theft can result in serious economic damage, loss of competitive edge, and decreased business growth. The total theft of U.S. trade secrets accounts for anywhere from $180 billion to $540 billion per year, according to the Commission on the Theft of American Intellectual Property [5].

IP theft impacting large, global enterprises tend to dominate the media headlines, while equally debilitating instances of IP theft affecting smaller companies often go unreported. With the risk of IP theft high for companies of all sizes and industries, it’s important to be well-versed in IP theft tactics to better protect critical assets and long-term business health. Common IP theft scenarios are:

Human Error: Any time a well-intentioned employee loses a device with company data on it, accidentally sends files containing trade secrets outside the company network, or inadvertently shares confidential data with unauthorized parties, IP theft can easily and quickly occur. For example, back in 2017, an Apple engineer brought his daughter to work, during which time she captured footage via her blog of the unreleased iPhone X, employee-only QR codes, and a notes app with code names of unreleased Apple products.

Hacking: By using spear-phishing techniques [6] to inject themselves into company networks, malicious actors can steal large volumes of IP and other confidential business and technological information. For example, for nearly 10 years a hacking group called the Advanced Persistent Threat 10 (APT 10) targeted the networks of more than 45 technology companies and U.S. government agencies to steal sensitive information and data on a variety of new and developing technologies. The hackers also targeted these companies’ managed service providers and their customer networks.

Access Exploitation: By exploiting their access to sensitive files, disgruntled employees can steal trade secrets and share them with competitors or criminals. For example, in the year 2019, it was discovered that former employees at biotechnology company GlaxoSmithKline stole trade secrets to benefit a Chinese pharmaceutical company by emailing confidential files and transferring proprietary data via electronic storage devices.

China’s unfair practices

The Communist Party of China has resorted to much unfair trade and economic practices for its motive of world domination; they are also responsible for using dirty practices economically, geographically and politically to achieve this purpose.

China uses many such evil practices some of them are:-

Dumping strategy:

Dumping, in economics, is a kind of injuring pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price below the normal price with an injuring effect. The objective of dumping is to increase market share in a foreign market by driving out competition and thereby create a monopoly situation where the exporter will be able to unilaterally dictate the price and quality of the product. Thus, destroying the business of a local company in that country or area.

Chinese Debt TrapDebt trap diplomacy is used to describe a type of diplomacy based on debt carried out in the bilateral relations between countries with an often alleged negative intent. It involves one creditor country intentionally extending excessive credit to another debtor country with the alleged intention of extracting economic or political concessions from the debtor country when it becomes unable to honour its debt obligations. The conditions of the loans are often not made public with the loaned money rather often used to pay contractors from the creditor country. Recent use of bilateral agreements through China’s Belt and Road Initiative has furthered this association, especially concerning commodity-backed loans for developing nations.

Intellectual Property theft:

China became a part of the World Trade Organization in the year 2001, although there were conditions that were imposed upon them while joining the WTO. China promised that it would liberalize and open up its economy further so that trade could be easily conducted between China and the other countries. Today after 20 years, China has opened up its economy to some extent but in a broader sense. China has aggressively misused the WTO for its benefit.

One can find ‘Made in China’ products in almost every country across the world, this the extent to which China exports its products abroad. As far as imports are concerned the largest social media networks in the world- Facebook, YouTube, Google, Amazon are nowhere to be found within China, they are not allowed to enter the realm of China. This is a one-sided trade-in away.

Instead what China has done is that it has copied these companies and created pilfered their technology created copycat clones of these companies within their country. Today, in China YouTube is replaced by its clone Youku, Amazon by Alibaba, Google by Baidu and Facebook by Weibo. These are all copycat clones that stole the entire idea and concept to prevent the other companies to reap benefits and other countries to benefit from trade.

China has indulged in IP theft in almost every sector, no matter in which country new technology is introduced or developed in; clones will be developed in China. Normally such an incident will not arise in a democratic country. For instance, if a UK company attempts to clone the product of a US company then the US Company can file a case in the courts of UK but there’s no question of court cases in China because the dictator government there promotes these cloning companies and provides protection to them in these matters.

The rules have been changed in China to ensure benefits to these companies. For example, according to one such rule, if any foreign company wants to set up a business in China then they will first have to transfer their intellectual property to their Chinese partners. In this same regard, the European Union Commission had filed a complaint in the WTO in 2018 to highlight how China forces the foreign companies to forfeit their technology to China. It has been estimated that the USA incurs a loss between 300-600 billion dollars annually due to this IP theft.

Legal Consequences of Intellectual Property Theft/Remedies Available

 Intellectual property laws prescribe harsh penalties for intellectual property theft. In most cases, intellectual property theft and infringement violations are charged as federal crimes. They can result in consequences such as:

  • Criminal fines
  • Imprisonment for several years, depending on the nature of the charges
  • Seizure of the stolen property, documents, or materials
  • Loss or suspension of a business operating license
  • Civil charges filed by the victim of the crime (for instance, for lost business profits)

Conclusion:

The Chinese Communist Party considers itself to be the ‘King of the World’ and is proving to be a threat to the democracies of the world. In my opinion, all the democracies of the world should come together to take down the Chinese bullies. Even in this pandemic situation China has caused a lot of trouble to other countries ranging from border intrusions with India and Vietnam to the dumping of steel in Australia.

Recently, the Indian government banned TikTok and 59 other Chinese applications as they were proving a threat to the privacy of the people. India has even taken part in joint naval exercises with Japan to counter a common threat from China. China has also received a global backlash for its mishandling of the COVID-19 which has now lead to a global pandemic.

I believe that all democratic nations should come together and impose collective pressure on China politically and economically. Just like India, even other countries should ban TikTok and other Chinese apps until China allows social media heavyweights like YouTube, Facebook, Google and other such companies to freely operate in its economy. This will result in free media in China and the Chinese Communist Party will lose its dictatorial power and its days would be numbered.

 

Footnotes:

[1] Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.

[2] The Paris Convention for the Protection of Industrial Property, signed in Paris, France, on 20 March 1883, was one of the first intellectual property treaties. It established a Union for the protection of industrial property. The Convention is currently still in force.

[3] The Berne Convention for the Protection of Literary and Artistic Works, usually known as the Berne Convention, is an international agreement governing copyright, which was first accepted in Berne, Switzerland, in 1886.

[4] The World Intellectual Property Organization is one of the 15 specialized agencies of the United Nations.

[5] The Commission on the Theft of American Intellectual Property is an independent and bipartisan initiative of leading Americans from the private sector, public service in national security and foreign affairs, academe, and politics.

[6] The fraudulent practice of sending emails ostensibly from a known or trusted sender to induce targeted individuals to reveal confidential information.

Shaunak Parulekar
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Second Year BALLB student at ILS Law College, Pune

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