Intellectual property rights protection and their
continued enjoyment to the exclusion of others is one of the
strongest motivations to innovate and spend considerable amount on
research and development. One feels cheated when his hard work and
tremendous investment is misappropriated by other at almost not cost.
Japan has alleged that its Shinkansen bullet trains
have been pirated by China. Even the value creation concept mooted by
few did not find favour with the Japanese company manufacturing the
trains in question.
Kawasaki Heavy Industries (KHI), the maker
Shinkansen bullet trains, is feeling cheated due to this entire
episode. After signing technology transfers with CSR Sifang, the
builder of China's impressive, new high-speed rail, KHI says it
deeply regrets its now-dissolved partnership. Initially, KHI planned
to sue its previously junior partner for patent infringement, but
subsequently it changed its mind.
Countries around the world are demanding technology
transfer agreements while allowing the foreign companies to establish
place of business in their territories. Some even extend benefits,
financial and non financial, in lieu of technology transfer.
In the field of telecom equipments, countries
generally ask for the source code of hardware and software. As a
trade off for earning profit in lucrative markets like china and
India, companies generally comply with this demand of respective
governments.
KHI is annoyed with CSR Sifang as the latter not
only copied its technology after patenting remarkably similar
high-speed-rail (HSR) tech but CSR now wants to sell it to the rest
of the world as a Chinese product.
Both Japanese and European rail firms are struggling
to increase their sales volume and this decision of China and Chinese
companies to sell China made rails would create more trouble for
them. Chinese companies would now compete with Japanese and European
companies both inside and outside Chinese markets.
What made KHI very disturbed is the fact that under
the licensing agreements with KHI, China's use of the expertise and
blueprints to develop high-speed railway cars was to be limited to
domestic application and markets.
Although KHI was not comfortable with the terms and
conditions of the technology transfer agreement yet it signed the
same in the hope that the terms and conditions of the agreement would
be legally binding.
China sees no wrong in this deal and its legal
interpretation. The Chinese authorities are now planning to file for
HSR patents abroad and that may cover the lucrative market of India.
China is also maintaining that Chinese product is much more superior
to the products of Japan and Germany. However, some feel that there
is no real innovation in the rail products of China. If this is the
case, the KHI’s train technology transfer episode may take a very
long time to resolve.
