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According to a study released at the beginning of this year by the OECD, right around today, plus or minus a few weeks, China will surpass the U.S. in its R&D spend. If you are like me, you are scratching your head right now and thinking, "wow, that happened fast."

 

This is, I think, a watershed moment, because it will very soon mark an important shift from IP violator to IP protector. I personally think that China will soon accelerate reforms in how it deals with IP violators, since becoming a staunch defender of its rights under TRIPs requires respecting the IP of others. To be sure, Chinese companies and individuals will continue to steal IP from outsider to China, but the shift to more of a "catch-me-if-you-can" approach is probably soon to be under way if in fact, it is not so already. My prediction is that this tectonic shift will be an important consideration for those investing in and around China over the next couple of years, as Chinese courts learn to take more of an IP friendly approach. While this may turn out to be as many as five years away from reaching the bottom lines of companies likely to be affected by the change, it will eventually favor American and European companies who have been getting short shrift from decreased sales abroad (and sometimes domestically) and will increasingly disperse those would-be IP thieves in China among a wider pool in an attempt by them to make detection more difficult. Finally, it may lead to certain labor intensive industries that have been previously wary of moving overseas to rethink their prior decision.

 

 

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