Intellectual Property Rights in China - Hardcover

Zhang, Zhenqing

 
9780812251067: Intellectual Property Rights in China
Hardcover
ISBN 10: 0812251067 ISBN 13: 9780812251067
Verlag: University of Pennsylvania Press, 2019

Inhaltsangabe

Over the past three decades, China has transformed itself from a stagnant, inward, centrally planned economy into an animated, outward-looking, decentralized market economy. Its rapid growth and trade surpluses have caused uneasiness in Western governments, which perceive this growth to be a result of China's rejection of international protocols that protect intellectual property and its widespread theft and replication of Western technology and products. China's major trading partners, particularly the United States, persistently criticize China for delivering, at best, half-hearted enforcement of intellectual property rights (IPR) norms. Despite these criticisms, Zhenqing Zhang argues that China does respect international intellectual property rights, but only in certain cases. In Intellectual Property Rights in China, Zhang addresses the variation in the effectiveness of China's IPR policy and explains the mechanisms for the uneven compliance with global IPR norms.

Covering the areas of patent, copyright, and trademark, Zhang chronicles how Chinese IPR policy has evolved within the legacy of a planned economy and an immature market mechanism. In this environment, compliance with IPR norms is the result of balancing two factors: the need for short-term economic gains that depend on violating others' IPR and the aspirations for long-term sustained growth that requires respecting others' IPR. In case studies grounded in theoretical analysis as well as interviews and fieldwork, Zhang demonstrates how advocates for IPR, typically cutting-edge Chinese companies and foreign IPR holders, can be strong enough to persuade government officials to comply with IPR norms to achieve the country's long-term economic development goals. Conversely, he reveals the ways in which local governments protect IPR infringers because of their own political interests in raising tax revenues and creating jobs.

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Über die Autorin bzw. den Autor

Zhenqing Zhang teaches political science at Hamline University.

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Introduction
A Tale of Two Intellectual Property Rights Enforcement Cases

Intellectual property rights (IPR) are highly controversial in China's rapidly expanding foreign economic relations. As such, I encountered enormous difficulty when requesting interviews from IPR professionals in China. Nevertheless, I also encountered some pleasant surprises. In early March 2008, my interview request received a warm response from Mr. Wu, a legal adviser with the IPR office of the branch office of The China No. 1 Pencil Company in Bilin City in East China's N Province. When I entered Mr. Wu's office, I was immediately attracted to a plaque bearing the title of "Model Unit of IPR Work" (zhishichanquan gongzuo xianjin danwei) hanging on the wall. Mr. Wu proudly told me, "We won this plaque with our hard work." He further added, "Maybe some good luck, too."

As one of the leading pencil producers in the country, Mr. Wu's company has survived and thrived on the enormous market need for double black pencils used for China's standardized tests. Standardized tests are important components of China's talent selection system. Indeed, the tradition can be dated back centuries. It has been estimated that the annual sale of pencils in China can reach as many as 100 million a year. The huge business opportunity has been very tempting for legal pencil producers and counterfeiters.

In May 2005, The China No. 1 Pencil Company identified a large amount of counterfeit double black pencils on the market in Bilin City. This discovery came only forty days before June 7, the day on which the Chinese National College Entrance Exam would take place. This was a very important day for millions of Chinese high school students and their families. If the knockoff counterfeit pencils were used in the exam, there was a very good chance that the scanner would not be able to read the answer sheet because the pencil lead would not be black enough, and thereby, the exam results of millions of high school students would be compromised. Mr. Wu and his colleagues reported this to the Economic Case Investigation Team of the Bilin Public Security Bureau immediately. He told the police, "It is not only our company's business interests that are at stake. That was absolutely unacceptable for the families of those affected high school students, either." The police had no reason to delay in taking action on this case. After a thorough investigation, the police identified an important suspect for the counterfeit activities: Shi Jiatao, a former employee of one of the branch factories of The China No. 1 Pencil Company.

With enough evidence to make a case, the police arrested Shi and his accomplices. According to the interrogation record, after resigning from his previous job, Shi, his wife, and their three friends discovered that producing and selling counterfeit pencils could be a highly lucrative business. Starting in February 2004, Shi purchased semi-finished pencils from East China's Shandong Province and produced a fake trademark. In only one year, Shi and his "team" had produced as many as nine million counterfeit pencils. With a factory based in N Province, the marketing network reached Shangdong, Zhejiang, Jiangxi, and Hebei. Altogether, the Bilin City police destroyed ten underground factories, confiscated three million counterfeit pencils, and arrested ten suspects during the investigation. In October 2005, the case was transferred to the Bilin City People's Court for criminal litigation. In June 2006, Shi Jiatao and his accomplices were sentenced to imprisonment ranging from three to five years.

The IPR enforcement case was one of the most important achievements in the history of the Economic Case Investigation team in Bilin City. The case was rated as one of the "top ten representative IPR enforcement cases" of the year, and the head of the team won a national-level prize. The case also left the Bilin police with a very positive reputation among the public, particularly the high school students and their families. Of course, Mr. Wu and his team won praise from the headquarters of The China No. 1 Pencil Company for their swift action to protect the company's business interests.

Although it has been several years since the successful enforcement, Mr. Wu is still very proud of the case. Toward the end of the interview, he told me, "This case was so successful because it was enforced under the right circumstances. It happened at the initiation of the right complainant, against the right counterfeiter, and, most importantly, at the right time. What do I mean by saying 'the right counterfeiter'? Think about it. If those stupid counterfeiters had infringed on a trivial company rather than ours, would our complaint have been so compelling? Moreover, if the case was not enforced before the National College Entrance Exam, would our company have won so much sympathy from the public?"

I did not ask Mr. Wu if he had reported any unsuccessful cases, although I was pretty sure that he did not have good outcomes every time. Another real-world example I encountered earlier indicated that the successful IPR enforcement case that Mr. Wu took pride in was an exception, rather than the norm, in China.

The beginning of the story is similar to the previous one. In spring 2007, Company C, an architecture material company also located in East China's N Province, detected counterfeit goods on the market in Tiqian City and reported this to the city's IPR enforcement agency. Through an investigation, the IPR enforcement officer discovered that the counterfeit goods were being produced by Company X, a smaller company located in the city's jurisdiction. The IPR agency immediately confiscated the counterfeit goods, which were altogether worth over 1 million RMB (about $160,000). Because the total value of the counterfeit goods far exceeded the minimum amount needed for criminal prosecution, the IPR enforcement agency was ready to bring the case to the city court for criminal prosecution. However, the Party Secretary of the small town where Company X was located lobbied the IPR enforcement team not to sue Company X because it was one of the major contributors to the township's tax revenue. With the help of one of the officials affiliated with the city IPR enforcement squad, I participated in several meetings among the township officials and the squad. The most cited reason by the township Party Secretary to protect Company X from legal punishment was that punishing Company X would reduce Q County's tax revenue and would eliminate job opportunities. These reasons did not convince the Tiqian City IPR enforcement team in the beginning. However, when township officials told the IPR enforcement officers that many workers with Company X were previously laid-off employees of several other local, state-owned enterprises and that economic punishment of Company X would drive those workers to lose their jobs again and thus endanger social stability, the IPR enforcement officers started to soften their position. The township officials' lobbying efforts received reinforcement from several female workers of Company X. When we stepped out of the meeting room after a lengthy round of bargaining that afternoon, several female workers of Company X approached us, grabbed the arms of the IPR enforcement officers, and appealed on behalf of the factory owner. The reason they cited was similar to that of the township Party Secretary: punishing the counterfeit factory would deprive them of their jobs and jeopardize their families' well-being.

The lobbying efforts seemed to be effective because afterward, the legal procedures slowed greatly. Before I left Tiqian City in mid-August, some "insiders" were already predicting that Company X was unlikely to face criminal prosecution and that there would be only slight financial punishment. In November 2007, as expected, Company...

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Verlag
University of Pennsylvania Press
Erscheinungsdatum
2019
Sprache
Englisch
ISBN 10 
0812251067
ISBN 13 
9780812251067
Einband
Gebundene Ausgabe
Anzahl der Seiten
312
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
preigu
mail@preigu.de

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