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MEMA Calls for End to Practices and Polices in China that Put U.S. Companies and Consumers at Risk

Date: September 28, 2017

The Motor & Equipment Manufacturers Association (MEMA) has again raised serious concerns about policies in China that put the innovation and intellectual property rights (IPR) violations of American businesses at risk.

In a detailed statement filed today, MEMA has responded to the United States Trade Representative’s request for comments from industry regarding China’s policies and practices in technology transfer, innovation, and intellectual property.

“Motor vehicle parts manufacturers are innovators, conducting almost one-third of the annual $18 billion investment by the automotive industry in research and development. This industry commitment has made the U.S. a leader in more fuel efficient, cleaner and safer vehicles resulting from domestic development and manufacturing of advanced vehicle technologies. Given this investment in innovation, intellectual property rights protection is critical to the sustained success of the motor vehicle parts manufacturing industry. The IPR of a company is among its most valuable assets here in the U.S. and abroad,” said Ann Wilson, MEMA Senior Vice President of Government Affairs in the comments.

“For the brand owner, counterfeiting leads to significant costs, including lost sales, reduced markets and margins, damages to brand reputation, and significant legal and investigation expenditures. Perhaps more importantly, counterfeit motor vehicle parts pose a serious threat to the motoring public because of the likelihood that a part will not perform like a genuine part or could fail. Weak enforcement of existing laws and regulations means little is done to stop counterfeiting and the trafficking of counterfeit goods.”

In August, the Trump administration officially initiated investigation of China under section 301 of the Trade Act of 1974. “The investigation will seek to determine whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce,” according to the Office of the United States Trade Representative.

In addition to IPR and counterfeit goods, MEMA raised concerns about a pending Chinese ban on the use of virtual private networks (VPNS), inadequate actions by the Chinese government to stop infringement and trade secret theft, and new laws and policies governing cybersecurity, data, and software.

“Actions like this make a company’s global operations even more susceptible to a broad exposure of its research, development, IPR and trade secrets,” Wilson said in the comments.

Intellectual property rights protections have been a top priority for MEMA, and patent infringements, trade secret theft, counterfeiting vehicle components and parts and stealing trademarks are issues MEMA takes very seriously. MEMA remains highly engaged on issues impacting IPR. MEMA interfaces with its Intellectual Property Council, which is managed by MEMA’s Automotive Aftermarket Suppliers Association (AASA) division, to address market challenges impacting patents, copyrights, trademarks, trade dress and intellectual property rights. 

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