US manufacturers seek stricter patent enforcement

WASHINGTON, Apr 19: A leading group of US manufacturers today issued a report urging the government to bolster patent and trademark rights and take further steps to fight piracy of intellectual property.

The Manufacturing Institute, research arm of the National Association of Manufacturers, made its case in a 75-page study released the day before President George W. Bush is due to meet with visiting Chinese President Hu Jintao at the White House.

The report made no mention of China. But at a press briefing, its author complained that China and other countries which fail to enforce intellectual property rights are ''free-riding'' on the innovations of others.

''The Chinese strategy thus far -- and it's been quite deplorable -- has been essentially to play the role of the quintessential free-rider,'' study author Richard Epstein said.

''They're going to get more growth, but in terms of global implications what this will do is it will reduce the level of worldwide innovation,'' Epstein said.

From Hollywood film studios and software companies to sneaker makers, a diverse American industries complain they lose billions of dollars in revenues per year to counterfeit copies of their products.

Such infringement has been a particular obstacle in the US-China relationship because the United States' trade deficit with China represents a big chunk of the nation's overall trade deficit, which last year was a record 723.6 billion dollar.

Epstein, a University of Chicago law school professor, said US officials should exert more pressure on China to protect intellectual property, although he said he was opposed to the idea of retaliatory sanctions.

''There has to be some rather brutal talk with the Chinese saying, 'Yeah, this is a very good local advantage that you're playing by way of free-riding, but it is simply not acceptable','' Epstein said.

In his study, Epstein argued that maintaining protection of intellectual property rights is key to economic development. He called on the US government to increase funding to the Patent and Trademark Office to encourage more vigorous enforcement of current patent law.

''No one can assume that valuable innovations will pop up magically in the public domain if their inventors received no reward for their labor and capital,'' the study said.

The Manufacturing Institute's members include Procter&Gamble Co., International Business Machines Corp. and Ingersoll-Rand Ltd.

In addition to encouraging the administration to take a stronger tone on intellectual property rights, some US businesses have taken more direct steps to protect their trademarks and patented products overseas.

Software maker Microsoft Corp., for instance, on Monday formally signed a deal with Chinese computer maker Lenovo Group Ltd. that calls for all Lenovo PCs sold in China to have the Windows operating system pre-installed.

The deal follows a Chinese government decree that all PCs made in China come with a licensed operating system installed, to discourage PC buyers from using pirated copies of Windows or other commercial operating systems.

Hu's tour of the US, which also includes stops at businesses including Microsoft, is intended to allay US fears about China's ambitions.

REUTERS