Wednesday, July 27, 2011

China blocks Apple knockoff...first steps to IP legitimacy

With the announcement this week of the shutdown of 5 knock-off Apple stores by Chinese authorities, the entire venture community's hopes were raised.

Indeed most California venture capitalists are frustrated with China's constant play on their startups. Every successful Silicon valley startup has been knocked off, Facebook, Twitter, LinkedIn, Zynga, etc not counting the established ones such as Google and Yahoo.

Not that any of these have significant IP (Google's notwithstanding), but they do have trade practices, certain proprietary tools and interfaces that make them unique, and significantly justify their success. 

The National Venture Capital Association, the voice of venture capital, has been making the rounds in Washington DC in order to raise the issue to the Commerce Department and other federal authorities. But as it always stands with China, it is quite difficult for our leaders to make China listen, and enter the world of legtimate IP practices.

Europe is not any less innocent, just maybe a little less conspicuous about it. A German venture firm, run by 2 brothers, made it its mantra to invest in European versions of Silicon Valley success stories. French, Italian and Spanish web copycat artists make a living out of making the local version of their US counterparts, sometimes not even changing the design or the brand colors.

"I hope that the US Patent office gets an overhaul with Congress delivering a real IP protection law that includes today's innovations so that China and Europe stop getting a free ride on US innovations" confirms Rachid Sefrioui, Managing Director at Finaventures, a venture fund based in Los Angeles.