Five Years Later, Copyright Theft Remains A Chinese Trademark

When Shanghai police broke up a counterfeit pharmaceuticals ring that produced fake Tamiflu in August, it seemed a blow had been struck against China's notorious intellectual property thieves. Tamiflu, produced by Roche, is one of the few treatments deemed effective against bird flu, and the seizure of 400 kilograms of the potentially dodgy pills might end up saving lives in the next outbreak. But the bust also underlined the fact that, five years after China entered the World Trade Organization with a pledge to curb intellectual property (IP) theft, its trademark pirates are still flourishing. And they are increasingly moving into more sophisticated and potentially dangerous product lines, plugging into international distribution networks and, ironically, the free trade engendered by the WTO, experts say.

Fake drugs are an issue of huge concern to the World Health Organization. When asked how many people were dying each year in China from fake drugs, WHO's chief China representative, Henk Bekedam said: "The numbers are not small". He said the Chinese government was now acknowledging that a problem existed, unlike a few years ago.

However with up to 5,000 pharmaceutical manufacturers and around 10,000 drug distributors, he said the industry was far too big and unwieldy to control.

U.S. companies alone lost at least $2.6 billion in potential sales in 2005 due to Chinese piracy involving business and entertainment software, music, movies and books, according to the U.S.-based International Intellectual Property Alliance. That is 36% more than from the next-worst violator, Russia. Other estimates put worldwide losses at the hands of the Chinese in the hundreds of billions of dollars.

Funding for intellectual property rights enforcement also remains thin in a country with myriad other social, economic and environmental issues to deal with, said Jack Chang, chairman of the IP protection subcommittee of the American Chamber of Commerce in Shanghai. "In the last two to three years, we have seen a stronger political will, particularly in the central government, to fight IP crime. But the resources of the Chinese police are very limited compared to the spread of criminal activities," he said.