China technology joint venture with G.E. January 18, 2011
Posted by James in Uncategorized.add a comment
As reported in a New York Times article on January 17th, 2011, G.E. is entering a joint venture with a China State-owned enterprise in which G.E. will share some of the same technology that is used in Boeing airplanes.
This type of joint venture is an example of a “pay to play” situation where U.S. companies must disclose their technology in order to have access to growing Chinese market. Many IP professionals fear that this will result in an unfair, irreversible transfer of key technologies to Chinese companies that could later become international competitors. With the needed technology in hand, these Chinese companies could be able to exit the joint venture, closing of the market for U.S. and other foreign companies, while repeating the benefits of the technology exchange.
Without knowing the eventual outcome, this type of transaction again highlights the importance of both: (a) having a credible legal system whether the ownership of rights can be agreed upon and enforced in the case of any breach; and (b) continuing to innovate so market leadership depends not on who can produce the cheapest but on who can innovate successfully and consistently.
