Honda wins China copyright ruling

Japan's Honda has won a copyright case in Beijing, further evidence that China is taking a tougher line on protecting intellectual property rights.

A court ruled that Chongqing Lifan Industry Group must stop selling Honda brand motorbikes and said it must pay 1.47m yuan ($177,600) in compensation. Internationally recognized regulation is now a key part of China's plans for developing its economy, analysts said. Beijing also has been threatened with sanctions if it fails to clamp down.

Chinese firms copy products ranging from computer software and spark plugs to baby milk and compact discs. Despite the fact that product piracy is a major problem, foreign companies have only occasionally won cases and the compensation awarded has usually been small. Still, recent rulings and announcements will have boosted optimism that attitudes are changing. Earlier this week China said that in future it will punish violators of intellectual property rights with up to seven years in jail. And on Tuesday, Paws Incorporated - the owner of the rights to Garfield the cat - won a court battle against a publishing house that violated its copyright. Other firms that have taken legal action in China, with varying degrees of success, include Yamaha, General Motors and Toyota.

The problem of piracy is not limited to China, however, and the potential for profit is huge. The European Union estimates that the global trade in pirated wares is worth more than 200bn euros a year (£140bn; $258bn), or about 5% of total world trade. And it is growing. Between 1998 and 2002, the number of counterfeit or pirated goods intercepted at the EU's external borders increased by more than 800%, it said. Last month the EU said it will start monitoring China, Ukraine and Russia to ensure they are going after pirated goods. Other countries on the EU's hit list include Thailand, Brazil, South Korea and Indonesia. Any countries that are not making enough of an effort could be dragged to the World Trade Organisation (WTO), a step that could trigger economic sanctions, the EU warned.