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China's IPR protection on fast track

(China Daily)
Updated: 2008-04-07 16:29

Qiao Gangliang, vice-president of the UK-based General Electric (GE) Healthcare, was surprised to see his company win a trade secret and copyright infringement case in China within eight months last year.

"It was much faster than I had expected," says Qiao, who compared the efficiency with that in the United States where he had worked as a law clerk. "As I understand, it usually takes two to three years in the United States."

The case, together with 11 other foreign-related cases, won Best Cases of IPR Protection for 2007-2008, a yearly award granted by the Quality Brands Protection Committee (QBPC) under the China Association of Enterprises with Foreign Investment (CAEFI), in Beijing late last month.

Representatives from major foreign-invested firms and intellectual property rights (IPR) protection experts say they felt China's judicial and law enforcement environment had made great progress, but much work remains to be done.

"These examples of good investigative practice set a worldwide example for other investigators to follow," says John Newton, intellectual property program manager of the International Criminal Police Organization, at the award ceremony.

"Many foreign companies were impressed by the efficiency and transparency of our case," says Qiao. "It surprised those who had misgivings about China's IPR protection that we won a suit here and secured our damages of 900,000 yuan."

The value of counterfeit goods involved in other awarded cases varied from 290,000 to 7.85 million yuan.

Michael Barbalas, president of the American Chamber of Commerce in China (AmCham), says he saw progress every year in China's efforts to combat fake goods. "We had a survey among our member companies recently and they said generally the legal structure is getting better in China."

Rapid moves and effective cooperation between administrative forces and judicial agencies were most frequently mentioned when the cases were introduced at the ceremony by the QBPC member companies, including Cisco, Nike, Motorola, Sony, and Procter & Gamble.

"We honored the pioneers to encourage stronger law enforcement and more excellent practice in IPR protection that can correspond with the efforts the Chinese government made after joining the World Trade Organization (WTO)," says CAEFI executive vice-chairman Liu Zhiben.

In a bid to create a better market and investment environment for foreign companies, China's supreme court has issued more than 20 judicial interpretations related to IPR protection since 2001, when China joined the WTO.

It ordered the establishment of special courts for IPR cases and lowered the threshold needed to prosecute people manufacturing or selling counterfeit products.

China's legislation in IPR protection is up to international standards, says Sun Hailong, vice-president of the Xi'an Intermediate People's Court, which handled the GE case.

But others say that while legislative progress has been good, stricter enforcement remains a problem. "China has already made great progress in legislation and policies, but we'd like to see tougher enforcement," says Michael O'Sullivan, secretary-general of the European Union Chamber of Commerce in China.

He hopes Chinese copyright and patent owners would get more involved in pursuing cases and criminal thresholds will be further lowered.

China's actions on IPR protection remained the first issue of interest to foreign companies when visiting China, says AmCham's Barbalas.

"Counterfeiting is getting worse, which means more people are doing it in large volumes," he says.

Official data show Chinese courts dealt with 2,962 IPR infringement cases in the past five years, 133 percent more than the previous five years.

Cross-border IPR crimes were on the rise, though specific data was unavailable, claims QBPC chairman Jack Chang.

"In a good number of cases, foreigners brought samples from abroad and opened factories in China to make counterfeit items, as China boasts a mature processing industry," he says.

The QBPC would focus on tackling challenges of organized international counterfeiting groups and regional protectionism, says Liu.

On March 28, 21 Chinese law enforcement agencies were recognized as "pioneers" by the QBPC, which comprises 177 foreign companies with a combined investment of more than US$70 billion in China.

Sun Hailong says he and his colleagues just did an ordinary job.

"We handled the GE case just as we did others," says Sun. "Foreign companies should have better knowledge of China's laws and trust in Chinese law enforcers."