Secure IPR essential for China's Growth

Virgil Cojocaru is a JD candidate at Osgoode Hall Law School.

Google recently surprised the world by announcing it may pull out of China. In the meantime, it would no longer enforce China’s information suppression and screening platform. Ultimately, if Google leaves China, it will do so because the country’s government would not tolerate Google running without filters. Many have interpreted this as Google possibly being the first of other American corporations standing up for freedom of speech and information in a country sorely lacking both. However, closer investigation of the allegation paints a more complex picture. The issue revolves around freedom of information on the Net, privacy rights, and intellectual property rights (IPR).

Google alleges that hackers accessed the Gmail accounts of Chinese human rights activists. However, this was limited to a few email addresses. Furthermore, the information only included account creation dates and subject lines. They did not extend to the content of those email accounts. Hence, although privacy and freedom of information on the Net are an issue in this particular case, an objective evaluation points to another central problem.

In fact, it seems that Google is particularly miffed about the hackers’ alleged breach and extraction of its intellectual property, along with that of other international corporations. The Official Google blog states: “As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted.”

Google can afford to state its opinion on the dreadful state of IP protection in China. Other corporations aren’t so privileged. Even though the online market in China has immense potential, Google only makes about 1% of its revenue there. The same might not be said for other major companies. Hence, Google’s statement might reflect the hushed view of many other corporations operating in China. The first response of the Chinese government has been that “Chinese law proscribes any form of hacking activity”. Nothing has been stated directly on intellectual property rights.

China joined the World Trade Organization (WTO) in 2001. Afterward, it amended its legal system to comply with the WTO Agreement on Traded-Related Aspects of Intellectual Property Rights (TRIPs). Hence, at least in theory, China does have a legal system for dealing with IPR. It also has an obligation under TRIPS to enforce and protect intellectual property.

If China does not enforce IPR, it is breaching its obligations under TRIPs. Furthermore, such a state of matters will discourage future business and innovation in the country. There will simply be less incentive for companies to move or continue operating in China. This applies especially to IP brought in from abroad. Like privacy and freedom of speech, intellectual property is also a right. Ultimately, all rights can be traced to a notion of dignity for the person and society at large. Perhaps it is naive for companies to think that in a country where other rights are foregone, IP rights will be respected and enforced. On the other hand, it is important to note that China does have a judicial system to deal with IPR infringements set up to comply with its WTO obligations. This consists of an administrative procedure and a criminal or civil judicial avenue available for complainants. At this point, it is important for China to show the world that its judicial system does in fact work when it comes to IPR. As others have said before me, for different reasons, the ball is in China’s Court(s).