Is China pulling up its drawbridges after raiding foreign firms' IP?

Here’s a brief snippet from an informative article on rising Chinese protectionism and the myriad tricks Beijing uses to unfairly advantage domestic firms and punish foreign firms that complain:

Foreigners rarely push back publicly for fear of angering the Chinese. An executive from an international express carrier says global delivery companies might win a WTO case over Beijing’s rules barring them from carrying domestic letters, but he says he would never pursue a case alone; his company would almost certainly face harassment. “The Chinese are very good at smashing the nail that sticks up,” he says. Many foreigners refrain from taking legal action because they feel the justice system favors domestic enterprises. “We complain but we don’t sue,” says Mark Cohen, an attorney at Jones Day in Beijing.

That attitude was reinforced when French electronics maker Schneider Electric last April settled a three-year-old patent dispute with Chint Group, a maker of products such as transformers and circuit breakers, for $23 million. Western attorneys familiar with the case say Chint had actually lifted Schneider’s technology, not the other way around. Thomas Pattloch, IP officer for the European Delegation in Beijing, says the case illustrates so-called junk patents used by the Chinese against companies whose patents they have infringed upon. “The court did everything they could to ignore the evidence Schneider presented,” says Pattloch. A Schneider spokeswoman says the company disagreed with the court’s initial decision and declined comment on the settlement. Chint disputed the account but declined to provide details, citing a privacy agreement. The court did not respond to requests for comment.

China’s huge market size and great political power enable it to violate global fair trade laws and practices while escaping the retaliatory consequences smaller nations pursuing identical strategies would suffer. China appears eager to press its size advantage to the fullest.

Posted by James on Sunday, March 28, 2010