fetch Solutions e-Catalog Identifies RoHS "Green Products"

China's RoHS Compliance Puts Electronics IP at Greater Risk


In March 2007, the Chinese government began enforcing its version of the RoHS environmental regulation. Termed the "Administrative Measure on the Control of Pollution Caused by Electronic Information Products," China's RoHS mandate represents more than just another administrative challenge to members of the electronics supply chain, according to Robin Gray, executive director of the National Electronic Distributors Association (NEDA), Alpharetta, Ga. In fact, Gray cautions that compliance with the China RoHS directive could put manufacturers' and suppliers' intellectual property (IP) at even more risk for piracy than it already is.

Electronics firms doing business in China need to be aware that while China RoHS targets the same substances restricted by the EU RoHS directive, the China policy stipulates that compliance can only be verified by testing done in accredited Chinese laboratories. "So these labs will know the composition of the product down to the most minute detail," Gray explains. "Any intellectual property, with respect to alloys or chemical content, is going to be documented by these labs."

This could be extremely detrimental to the competitiveness of U.S.-based electronic component makers and OEMs, since reverse engineering and outright IP piracy are common practice in China. In fact, the U.S. Customs and Border Protection agency reports that 70 percent to 80 percent of counterfeit technology products seized at U.S. borders come from China.

"Reinnovation," as the Chinese government has termed the practice of reverse engineering foreign-developed products, is a fact of life in today's China, according to Dave McCurdy, president and CEO of the Electronic Industries Alliance, Arlington, Va. McCurdy recently testified before the U.S.-China Economic and Security Review Commission hearing on China's enforcement of intellectual property rights, and the dangers of the movement of counterfeited and pirated goods into the United States.

EIA is one of nearly 185 U.S.-based businesses and organizations that have rallied together to form the Coalition Against Counterfeiting and Piracy (CACP) in association with the U.S. Department of Commerce.

The coalition is not only actively working with government agencies to ensure greater detection, enforcement and prosecution of IP crimes in China and worldwide, but is also committed to increasing the public's understanding of the negative impact of counterfeiting and piracy on the U.S. economy.

For example, the U.S. Department of Commerce estimates that in 2005 the value of the copyrighted works that were pirated exceeded $2.3 billion, and counterfeit goods make up an estimated 5 percent to 7 percent of world trade.

Fortunately for the electronics industry, the Chinese economy is becoming more dependent on foreign imports and exports, and as a result, the government is making a concerted effort to appease its trading partners by enforcing the intellectual property rights of both native and foreign companies in the region.

The U.S. Department of Commerce reports that the Chinese government has stated it will establish 50 Intellectual Property Rights (IPR) trial courts across China and 50 IPR Infringement Reporting Centers across the country. While these efforts are a good first step, U.S. companies doing business in the region still need to be cautious with potential suppliers before entrusting their strategic technologies to them, NEDA's Gray advises.