China's city of lights shines with better IPR protection

GUANGZHOU - Seven years ago, Ding Yunxiang's first startup failed due to copying an Italian luxury lighting brand. But today, his company in South China's Guzhen township, dubbed "China Lighting Capital," works with several Italian lighting designers.

Ding started his first company in the manufacturing hub on the Pearl River Delta in 2007. Its copycat lights, sold at home and abroad, brought in more than 20 million yuan ($3 million) in the first year. In 2008, he was sued by the Italian company and lost the lawsuit in 2010, when his company went bankrupt.

In 2014, Ding founded the lighting brand MUMOON focusing on original designs. The change in business plan was not only due to learning a lesson from his previous company. It was also due to changes to the local intellectual property rights (IPR) environment after an IPR protection center was set up in 2011 by the local government under the authorization of the State Intellectual Property Office.

"Foreign lighting companies used to call us plagiarizers. Now, they are willing and confident to maintain long-term cooperation with us," Ding said.

Following more than 30 years of development, the small town has become the world's largest light manufacturing and sales center. Last year, Guzhen manufactured around 50 percent of lights sold worldwide, exporting products worth $370 million.

However, before the IPR protection center was established, the local lighting industry was dominated by cheap and inferior counterfeits.

Designers did not like to work with Guzhen's manufacturers because of their copycat products, said Zhou Jintian with the town's Communist Party of China committee.

"We used to only allow VIP customers or buyers with reliable recommendations to see our new designs in the back room," said Zhang Zhuanli, general manager of Guzhen-based Kinglong Lighting Co Ltd.

Rampant IPR infringement resulted from the red tape involved in patent applications. It took the local intellectual property office a year to approve a patent, while each model would be replaced by a new one every three months, making patent application meaningless.

The IPR protection center has shortened the processing time to seven days, which has boosted enthusiasm for innovation and raised IPR awareness.

In 2016, the center handled more than 9,000 patent applications, up nearly 30 percent year-on-year, and over 500 IPR disputes, up nearly 24 percent.

Ma Chi, a teacher at Zhongshan Polytechnic, started a lighting studio with his students in Guzhen, earning more than 200,000 yuan a year selling patents and designs to companies.

"In the past, we sold lighting products, now we're selling designs and it makes good money," Ma said.

Most Guzhen's lighting companies now have their own design teams and brands, creating many new styles of lighting, said Ou Enxiong, deputy director of the town's bureau of economy, technology and information.

As better IPR protection has evolved Guzhen into a leading innovator in the global lighting industry, the IPR protection center has started to deal with disputes in which foreign companies have copied Chinese products, said Zhang Binghui, deputy head of the center.

Guzhen's transformation epitomizes China's increasing efforts in IPR protection.

In response to a memorandum signed by US President Donald Trump to direct the US Trade Representative to examine China's intellectual property practices, a spokesperson with the Ministry of Commerce said earlier this week that China has always paid great attention to IPR protection, by improving legislation and intensifying administrative and judicial protection.

In 2016, Chinese police solved 17,000 criminal cases of IPR infringement, with more than 4.6 billion yuan involved, and Chinese customs seized over 42 million products violating IPR.

Since 2013, the Chinese government has launched over 170 campaigns to prevent fake products, while more than 1.3 million cases have been handled and nearly 100,000 people jailed. The intellectual property courts set up in Beijing, Shanghai and Guangzhou in 2014 have dealt with nearly 40,000 cases.