Stronger IPR can end blight of copycat goods
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GT: Some Chinese enterprises complained that the overseas patent application process is too troublesome or too costly. What's your comment on that?
Wegner: It's always a problem. The laws are different and it is a problem, as it is a big transition from one country to another. What Chinese should do in the US is to focus on a few cases, not many cases. They should focus on getting patents on the products that can be marketed and getting good lawyers. And there's no doubt that it is expensive. But if you get a bad lawyer, you will get a bad patent.
It is a very difficult transition to learn foreign patent laws but it's the same problem throughout the world. So, the same answers apply to US companies going to China.
Ideally, in the future, if you file a patent in Beijing, you will have the patent the next day throughout the world. But that system will take many years to develop.
GT: There are many shanzhai (imitation) products in the market. One of the reasons is that some Chinese companies think that the overseas patent application is too costly. How to reach a win-win phase?
Wegner: We have to get rid of copycat ideas, patented or unpatented. If a company is in a position where it really cannot afford to file a patent application, then it should consider to setup a joint-venture. If a company is very good at inventions, it should try to find an US company willing to share the risks, file the patents and share the rewards. So it's a matter of contract law and freedom of contract.
Certainly, if a Chinese company is good at innovations, they should not flush them into the toilet because what happens after one year, if you don't have foreign applications filed, is that you will forfeit your rights.
GT: Some overseas companies do not have a good market share in China. Their products are priced too high, especially when compared to cheap shanzhai goods. What's your advice on this?
Wegner: They should be more realistic about their prices. Practice is more important than theory. So, for example, there is an ongoing case in the US Supreme Court that involves Costco, a US supermarket, versus the watch maker firm Omega. Omega sells genuine branded watches in the US for about $2,000, which in some foreign countries retail just for $12. Why does Omega sell so cheaply elsewhere? Because they have to bend to the business reality that they can't charge the same price in those countries as in the US.
GT: Many economies have experienced a period of imitation goods. Do you think shanzhai products will eventually disappear in China?
Wegner: I don't think it's a black-and-white issue. What do you need for innovation? You need brilliant scientists. China has Tsinghua and many other institutes and right now some of the world's best scientists. Why does the US have the world's best scientists? Because we bring them from China. So we have a huge number of Chinese scientists that have gone to Stanford, Berkeley, MIT and other institutes.
The way for China to develop most quickly is to provide incentives to these brilliant scientists to stay home, which will need strong IP rights and strong venture capital. It could be difficult for China to attract foreign scientists because of the language barrier, but the big point for China is to keep Chinese scientists at home, or to attract those that are now in the US to go home.
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