Fake Innovation: Are Copycats Creative?

In a bizarre turn of events related to intellectual property, a Chinese senior official has defended the blatant copyright practices employed by many Chinese manufacturers.

The clam is, believe it or not, that “innovative elements” should be commended and encouraged rather squashed without evaluation.

“Both the interests of intellectual property holders and of the end-consumers of these products should be considered when it comes to intellectual property, as both protection and use of property contribute to the progress of society,” said Yang Xueshan, vice minister of the Ministry of Industry and Information Technology (MIIT).

The “shanzhai phenomenon” that is sweeping across China covers a diverse range of electronic products including mobile phones, MP3 Players and Web designs. Since Apple released its iPhone 4, shanzhai models have been widely available across Chinese black markets. The cheapest copy sells for about 550 yuan ($83).

“It is not fair to label a knockoff product as piggybacking on existing intellectual property without careful assessment. Fake-product makers should pay for using intellectual property created by others to avoid any infringement. Otherwise, they should be encouraged, as they are also innovating,” Yang added.

It must be said that he included a pledge promising a properly conducted crack down on copyright infringement.

To illustrate the extent of the shanzhai trend, one website (shanzhaiji.com) markets exclusively shanzhai products ranging from mobile phones to high-definition TV sets, which are all priced cheaply.

The problem is that most of the copycat products while they may bear some semblance to the original are, generally speaking, of much poorer quality as well as lower cost.

“Knockoffs, which are more often better localized, just cater for the particular needs of low-income people, so there is sufficient room for them to survive and thrive,” claims Zheng Jianmin, a professor of business at the University of International Business and Economics.

Others sharply disagree.

“Shanzai products are controversial, as they are not clearly defined…

The act of stealing and pirating from other brands is intolerable worldwide. Developing self-innovated brands is the only way to make Chinese brands respected worldwide,” states Feng Jun, CEO and founder of the giant Chinese consumer electronics brand, Aigo.

There may remain many schools of thought on this highly charged, controversial issue, but last year alone across China, courts settled a total of 36,000 intellectual property disputes, marking an increase of 2.7% from the previous year.