US officials are looking at China’s intellectual property policies which have given rise to counterfeit goods, pirated software and theft of trade secrets. This comes from the top US trade official Robert Lighthizer, who believes that these issues have enough merit for an investigation. It is estimated that the rise in pirating and counterfeiting has cost the US economy $600 billion annually.
Intellectual property is the best value driver for any business. Having access to an exclusive asset like a powerful brand name, creative design, or innovative ideas can set your business apart from all the rest, especially when it is time to sell. It’s no wonder that companies would go the extra mile to protect their business’s intangible assets. Last year alone, Apple won a supreme court case against Samsung awarding Apple $ 400 million for patent infringement. And even when there are no favorable decisions in court, companies spend millions taking these cases to trial for years.
However, China is not staying silent. Stating that any investigation from the US is concerning, and will “not sit idle” if the actions taken by the US impair trade relations. China has been at the forefront of this issue, due to various hacking allegations made against major corporations based in China. At the moment, it is unclear whether the actions US trade officials will take will selectively target certain Chinese companies or whether they will take a more wide spread approach that will affect the Chinese economy as a whole.
So, what does this mean for businesses in the US? It will be advantageous for many businesses who want to protect their intellectual property, just like Apple, they will benefit from increased sales, which where otherwise lost through pirating and counterfeiting. On the other hand, China’s retaliation to this investigation may come in the form of US trade sanctions resulting in increased prices for Chinese imports and less profits from US exports headed to China.