China intellectual property faces enforcement conundrum

While China has generated a huge number of statistics during the past couple of weeks to demonstrate its achievements in fighting violations of intellectual property rights, fake fashions and pirated DVDs are still being openly sold throughout this city.

Typical is a DVD shop set up in a main-floor suite of an apartment complex which even has a flashing neon DVD sign in the window. Standing in front of a rack of the latest U.S. blockbusters the owner is ready and willing to convert to selling the real thing. "We don't want to keep on selling 'daoban' ('outlaw' copies). We'll be happy to sell the legal copies and charge whatever they want." he says.

The customer looking over the nicely packaged DVDs that sell for about 90 U.S. cents joins the discussion. "I'd pay more if it made things right and it meant I got better quality."

Mark A. Cohen, intellectual property attache of the U.S. Embassy to Beijing says that's the crux of the situation. "What really matters is to have markets developing legitimate goods; people buy legitimate goods and revenues going up for industry," he said.

To really reach its goal, Cohen said that China could ease its enforcement burden by taking non-enforcement measures such as opening its market and speeding up market access.

"If you have more motion pictures coming into movie theaters, you will reduce some of the piracy and have more revenue. Putting money into anti-piracy isn't necessarily giving you more revenue. Having a bigger market will do it," said Cohen in an interview with Xinhua.

Meanwhile he says China has made some very good moves. "I am happy to see increased cases (of enforcement), that's an example of more transparency.

Unlike Western countries which rely on judicial measures to protect intellectual property, China invented a unique administrative system of enforcing adherence to IPR. Many experts believe side-stepping the courts and not bogging down the judiciary is a more economical and a faster way of dealing with IPR pirates and of educating people. However the less harsh penalties of administrative justice is not always a big enough deterrent to stop intentional IPR violation, say experts.

"One important issue in China is how the administrative system can integrate with the criminal system," said Cohen. "Or when does the case become criminal?"

China's official data reveals that most of the country's IP cases are handled by its unique administrative system rather than in civil or criminal courts. The proportion of cases transferred from administrative authorities for criminal prosecution also varies between regions. Moreover, China's IP cases tend to cluster in particular regions. For example, more high-tech-related IP infringements were found in Shenzhen while theft of trade secrets are concentrated in more prosperous cities.

Given that the World Trade Organization (WTO) provides no guidelines on administrative enforcement, China has moved into an uncharted area strewn with new problems, such as uniform sentencing nationwide.

"When you look at a big country like China, or the United States, or Brazil or India, there are always going to be different economic interests. So how do you ensure a crime is treated the same?" said Cohen.

To solve this problem, he said that legal institutions need to determine where the problems are and make sure "bad guys get punished more and little guys don't get punished as much".

"Many people recognized there were major changes to China's law after China joined the WTO. Almost all major IP laws were revised," he said.

To improve the country's law enforcement, however, Cohen believes that China should give more consideration to the independence of its courts and questions like when to bring in specialized prosecutors to handle IP cases.

As the specialization and globalization of IPR crimes has become a growing trend worldwide, Cohen said that China and the United States could cooperate in a variety of ways. He said that the role of business should never be underestimated because intellectual property is primarily a private right.

"Many people in China and the United States assume that most of the intellectual property activities in China involve foreigners suing Chinese. The fact is, if you look at civil court statistics, 95 percent of the cases are Chinese suing Chinese," he said.

Talking about America's 200-plus years of experiences in intellectual property protection, Cohen said, "There is a lot of complexity in intellectual property which can make it a challenge even to my own country. This is what we should keep in mind."

Source: Xinhua

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