Kiwi innovation needs protection, says expert

Crowds on Nanjing Road, Shanghai, China. Photo/NZME.

New Zealand has a huge disconnect between innovation and making money from its inventions because companies and the Government do not understand the importance and value of global intellectual property protection.

That is the view of James & Wells partner Ceri Wells, who added: "We are extremely good at developing things - we're very inventive.

"We often rank at six or seven in the OECD in terms of innovation. But when it comes to commercialisation, we're somewhere near Cyprus," he told the ExportNZ BOP seminar.

Mr Wells said the Government was willing to pour money into research and development but put no money into the ownership of that innovation.

"People develop things, but then don't control the IP," he said.

And IP was a key factor to consider when dealing with China, either as an exporter or importer.

"China is trying to really understand IP," he said.

" IP laws in China are strengthening very fast. The Chinese Government has policies to encourage companies to invest in innovation. They understand that if you own the technology you're not reliant on some international company, so it gives them greater security."

China was now filing more than two million patent applications annually and publishing more than 500,000 patent applications every year, he said.

"They have worked out that if they are trying to make money out of IP by encouraging citizens to file, they also have to be a respecter of IP rights," he said.

China still has some way to go - a report last year quoted, Xinshi Li, president of the Chinese Academy of Inspection and Quarantine, as saying half or more of the bottles of purported Chateau Lafite sold in China were probably made on boats off the coast of China, rather than in the vineyards of Bordeaux.

Mr Wells said the environment in China was still very difficult, but improving. "We are finding very good IP enforcement in China. It's matter of knowing which courts and authorities to approach."

In China the government offered a 50 per cent grant to meet the costs of domestic companies filing international patents, with regional and civic authorities typically picking up the balance. "There's huge encouragement for Chinese companies to go out and control the knowledge they've created."

New Zealand companies needed to understand they couldn't just send their products into China and expect them to be protected, he said.

"Rip-offs often occur when exporters start a dialogue with a Chinese company. Most distributors will go and register your trademark in China, to secure control of the relationship. The first to file owns the IP - there are some extremely well-known European brands that are owned by Chinese businessmen in China."

There was also a danger of Chinese companies registering the Chinese language version of a trademark or branding.

"There are lots of horror stories, usually because people have entered the market unprepared," he said. "But there is now pretty good enforceability in China and it's improving all the time. Exporters need to remember, it's going to be the world's biggest market, and IP rights last a long time."