MFG 2.0

Is Chinese-On-Chinese IP Theft A Good Thing?

Interesting news out of Shanghai -- it seems that at least one Chinese company is fighting some of the same intellectual property theft issues that many Western companies have had to deal with while doing business in the Middle Kingdom.

What happened is a familiar story, if not context: the leading Chinese mobile search provider, a company named mInfo, recently discovered that it's Guanxi Mobile City Guide is being copied by a former business partner, Beijing Taiyu Co. The service, popular amongst both the domestic and expatriate communities, has basically been hijacked by Taiyu -- the company where Guanxi's servers were formerly stored -- by Taiyu's offering of a similar service under a similar name and SMS short-code.

Interestingly enough, mInfo had recently purchased the Guanxi service from its original owner, which as a foreign-owned company was restricted by Chinese law from investing directly in a value-added service business.

(I'd be willing to bet money that this law, at least, is strictly enforced.)

One thing that stuck out in the press release was this sentence:
"When people think of Intellectual Property Rights (IPR) violations in China, they usually think of music, movies, software or branded apparel."
While that may be true, it brings up another point -- when we think of IPR violations in China, we usually think of Western companies getting hit, and having little they can do about it on a practical level in-country.

While many U.S. companies might feel mInfo's pain, perhaps a little Chinese-On-Chinese IP theft will spur some much-needed progress in developing a workable Chinese IP enforcement apparatus. As the press release says:

"mInfo has delivered formal complaints to Taiyu to stop operating their 'new' service, but have not been able to get a satisfactory response. In fact, Taiyu has even actively pushed out unsolicited SMS messages to our users saying they are a "better Guanxi." Given this kind of blatant disregard for IPR and violation of our cooperation agreement, mInfo and Mailman China have no choice but to issue formal legal proceedings towards the Taiyu company. We are confident that justice will prevail in this case, and it will be a great test of the maturity of the IP rights enforcement strength of the China legal system."

Even though they're looking to get their day in Chinese court, it's interesting to note that mInfo isn't hedging its bets. In fact, mInfo CEO Alvin Wang Graylin even went so far as to issue a personal plea for user loyalty:
"We wanted to remind our users that Guanxi's true number is 95882929, all other numbers are false. Please tell your friends the 'real' Guanxi number and don't settle for any imitations."
How do you say "good luck" in Mandarin?

TAGS: Innovation
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