China’s anti-piracy war: Companies fight back

Vaughan would not disclose any sales figures, but said they were in line with expectations.

“We're seeing some early signs that things are going in the right direction,” he said.

Secrecy a mainstay
In other industries, secrecy remains the mainstay.

Household names like the spray lubricant WD-40 and Coca Cola have managed to protect their businesses by using closely guarded formulas. Lian, the consultant, said he urges companies to keep some of their production processes outside China.

“The most effective methods are focused on keeping part of the production process secret,” Lian said.

The radio-frequency identification, or RFID, tags that Pfizer and other drug companies are putting on their packages are also being adapted for use on cigarette packaging, specialty materials and jewelry, said Rod Chui of Hong Kong RFID, a high-tech firm in Hong Kong that is developing the products.

But such technologies are in their infancy and it's unclear whether they will deter piracy or be worth the added costs for companies.

But drugs may be legally repackaged in places like the U.S. and Europe, giving criminals opportunities to hijack legitimate packaging for counterfeit medicines, said Dr. Bryan A. Liang, vice president of the Partnership for Safe Medicines.

Hurdles in new encryption
Software and media companies, meanwhile, are running into other hurdles as they develop new encryption and so-called digital rights management technologies meant to prevent excessive copying on personal computers.

Sony BMG Music Entertainment faced lawsuits over flawed CD copy protection software that opened a potential security vulnerability when it was automatically installed on computers. Sony settled a number of lawsuits and offered a one-click “uninstall” application to remove the copy protection program.

Warner Bros. will go along with any standard meant to deter piracy, said Vaughan.

But in the meantime, it's working with DVD wholesalers to put key titles on store shelves alongside pirated products.

“That's part of the strategy of gradually converting the market,” he said. “This is the beginning. There's a long, long way to go.”

MORE FROM WORLD BUSINESS

World business Section Front

The stunning collapse of Iceland   G7 endorses plan to stem financial crisis World markets follow huge U.S. losses Venezuela shuts down nearly all McDonald’s Iceland’s financial debacle escalates European markets lose ground again Forecasters see U.S. leading global downturn U.K. to partially nationalize banks Iceland teeters on the brink of bankruptcy U.K. threatens to sue Iceland World business Section Front   Add World business headlines to your news reader: