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Chinese enterprises have paid more than US$1 billion in compensation to their foreign counterparts because of disputes over intellectual property rights (IPR) since China joined the World Trade Organization in 2001, Minister of Science and Technology, Xu Guanhua, said yesterday in Beijing.

These disputes mainly came up in the sectors of film, colored TVs, motorcycles, digital cameras, MP3 chips, autos and telecommunication equipment, according to Xu.

"The frequent occurrence of IPR disputes with foreign companies has had a serious impact on China's industrial development," said Xu, noting that the influence could sometimes be "destructive" for certain sectors.

Xu made his remarks while reporting the status of the country's scientific and technological innovation work and IPR protection to members of the Standing Committee of the National People's Congress (NPC).

Xu blamed Chinese enterprises' lack of awareness of IPR protection and weak ability in managing IPR issues for their problems.

Foreign companies owned the majority of patents in the technology used or produced by Chinese enterprises, he said.

For example, in the wireless transmission and mobile telecommunication sectors, foreign firms owned 93 percent and 91 percent of invention patents respectively.

He said China had made progress in setting up a legal system for IPR disputes. For example, laws had already been promulgated on patents, trademarks, copyright and unfair competition.

However, the country did not have a law dealing with enterprises that take advantage of IPR to seek a market monopoly, he noted.

Xu said China had drafted a series of policies to support the development of IPR which is seen as an important part of the nation's innovation drive.

Enterprises, scientific research institutes and universities are encouraged to form alliances in developing IPR so as to bring their advantages into full play, Xu said, adding that China has made efforts to improve the social environment for IPR protection.

From September 2004 to the end of last year the country handled 22,000 trademark violations and destroyed 33 illegal CD production lines.

(China Daily April 28, 2006)