1. International Business Assignment #1
Intellectual Property case study
Done by: Roger Thompson 300653701
Read the newspaper report from chinadaily.com.cn, on page 2

2. of this assignment, and answer the following questions:
Questions and answers:
1. What is the general notion behind rights to intellectual property?
The main purpose of the rights associated with intellectual property is to protect people
from getting their ideas stolen and used by others without proper permission. This ensures that
people will be able to secure their profit from their ideas.
2. The piracy of intellectual property is illegal in China, but it is nonetheless widespread.
Explain any two reasons why you believe piracy in the mobile telephone industry is
so rampant there. (There may be many reasons, and I would like you to identify and
explain two of them.)
The level of piracy which has been occurring in the mobile phone industry in China is
merely a small part of the widespread piracy that is taking place there. The piracy of items
has become a part of the culture in certain areas. The rampant piracy of mobile phones is
the result of two factors that I would like to call: price and plastic.
Price: The producers of the “fake” phones have the advantage of price, when it
comes to the cost of the original ones. Therefore they provide consumers with a makeshift
sense of the original phones without having to pay the same prices.
Plastic: China is the world’s number one manufacturer of plastic as a result,
manufacturers are able to create plastic and electronic based products at a cheaper rate.
This further fuels the rampant nature of making “knock-off” mobile phones in the sense
that they can produce these imitation products easily; because the materials needed to do
so is not far from their reaches.
3. Although not explicitly stated in the newspaper report, Apple Inc. is probably
deeply concerned about the existence of Hiphone. Explain any two reasons why

3. you believe the company should be, and probably is, concerned.
With such a company copying their product Apple has the right to be concerned
because the Hiphone is presenting itself as a competitor even though it’s just an imitation
of the real thing. The Hiphone is taking up a considerable part of the market share that the
iPhone would possess if there was no Imitators.
The other reason why the Apple should be concerned with the piracy of its products is
the possibility of losing its customer base to the Hiphone. If these companies that are doing
the pirating decide to develop something that is a little more innovative than the originals
they will be able to take over Apple’s consumer base without having to pay for all the
advertising costs that is involved with establishing a brand.
4. Suppose you were a Canadian business person thinking of
exporting your products to China. How could the information
contained in the newspaper report(Chinadaily.com.cn, August 17,2011)
be helpful to you?
The information in the newspaper would have given me an insight to what to
expect when my product enters China’s market; it would eventually be pirated. With such a
problem I would seriously consider creating a particular function/ patent/ emblem that
would signify my product’s authenticity. I would put in the considered energies needed to
try and deter people from trying to copy my product, such as copyright laws. Even though
they are not paying much respect to the copyright laws, it’s still best to have them put in
place. If I feel my product is unable to establish itself as dominant in its market then I
would not export it there, because imitations will be developed that have a price advantage
which would be detrimental to my investment.