[No.101] Strategies for Intellectual Property and Preventing Technology Leakage in China–A Comparison of Strategies Used in Japan, America, and Europe

Abstract

　Japanese corporations and American and European corporations take different approaches when it comes to business in China in general: (i) American corporations are concentrated in the music, motion picture, and software industries, so they have a particular interest in solving copyright infringement problems; (ii) American and European corporations have started to actively use China as a base for research and development; and (iii) many American corporations have clear China-specific technological strategies.
　The systems for managing intellectual property in China also differ among Japanese corporations and American and European corporations: (i) whether American and European corporations have an IP department depends on the individual corporation’s overall management policies; (ii) locally hired employees managing intellectual property in American and European corporations are usually the ones entrusted with important IP-related duties; (iii) there are many requirements for employment and the remuneration is high for locally hired employees managing intellectual property in American and European corporations; and (iv) relatively few Japanese corporations attribute intellectual property rights to their subsidiaries in China.
　Various aspects also differentiate Japanese corporations and American and European corporations in terms of the measures they take to combat counterfeit products: (i) American and European corporations show a similar trend as Japanese corporations toward taking administrative enforcement measures or civil proceedings, but a trend toward using criminal proceedings is emerging among American and European corporations; (ii) in American and European corporations, internal employees often prepare warning letters, conduct research, and collect evidence; (iii) the budget of American and European corporations for measures to combat counterfeit products is far greater than that of Japanese corporations; (iv) American and European corporations are active in exchanging information with and collecting information from governments; and (v) American corporations emphasize using estimated amounts of damages and quantifying the effectiveness of their measures to combat counterfeit products.
　Two key points stand out as being essential when considering measures to combat leakages of technology and infringements of trade secrets: (A) that good personnel management is effective as a measure for combating the leakage of technology and the infringement of trade secrets; and (B) that good information management is essential for preventing technology leakages and trade secret infringements. Many differences are evident between Japanese corporations and American 2 and European corporations with respect to these measures: (i) American and European corporations are more active than Japanese corporations in willfully transferring technology to China; (ii) Japanese corporations are considerably less popular in China than American and European corporations; (iii) American and European corporations are more progressive in terms of assigning managerial powers to Chinese management personnel; (iv) the level of compensation offered at Japanese corporations in China is considerably lower than that offered at American and European corporations in China; (v) American and European corporations in China engage in corporate PR in many different ways, but Japanese corporations in China do not do enough; (vi) American and European corporations employ various initiatives to increase the motivation of Chinese personnel; and (vii) Regulations at American and European corporations provide severe punishment for personnel who divulge secrets.
　Japanese corporations and American and European corporations take different approaches when it comes to strategies for intellectual property and preventing technology leakage in China. But it is important that Japan adopts the good aspects of the methods used by American and European corporations at the same time as it continues to collaborate and cooperate with international institutions, governments, and anti-counterfeiting organizations.