When Jack Chang went to buy a jacket in Beijing's Yaxiu market a few years ago, he was shocked by what he saw - both foreign and local customers bargaining with vendors for fake LV bags or Columbian coats.

As chairman of the Quality Brands Protection Committee of the China Association of Enterprises with Foreign Investment (QBPC) - an organization that works with the Chinese government, local industries and other organizations to improve intellectual property (IP) protection in China - Chang realized how tough his work would be.

And he knew this should not be a battle against counterfeits by foreign companies alone. He needed strong allies.

Through years of cooperation with Chinese government agencies and domestic companies, Chang has witnessed a significant change in China's IP protection, with awareness by many domestic enterprises greatly strengthened in recent years.

The improvement of IP protection among ordinary Chinese companies is seen to be imperative for the nation's entire IP environment. According to statistics from the Supreme People's Court, 95 percent lawsuits alleging IP infringement in the past 10 years were filed by domestic companies.

"More and more Chinese enterprises have realized that the era of a lonely fight against counterfeits has passed and an industrial association like the QBPC is important and necessary for domestic companies," says Chang.

Established in 2000, QBPC now has 168 members that have invested a total of over $70 billion and have created hundreds of thousands of jobs in China.

Chang says several years ago, relying on local police officers and industrial and commercial bureaus for protection was almost the only thing QBPC members could do to fight counterfeits.

After a few meetings with QBPC members, Chinese companies also realized they need to work together to protect their own rights.

"Counterfeiting actually hurts domestic companies more and squeezes the living space of local brands," says Chang.

The QBPC invited many Chinese firms to its conferences and shared its experience in investigations, research and communication with the authorities.

Two years ago, COFCO, the nation's largest food importer and exporter, suggested the need for an industrial association to protect famous Chinese brands.

QBPC shared its knowledge with COFCO about the daily operation of its organization. COFCO is now working with several other Chinese companies that have famous domestic brands and want to participate in the establishment of an association.

The attitude of government agencies has also changed.

The Shanghai Pudong New Area IP Protection Association began functioning in June after it was founded by the Shanghai Intellectual Property Service Center and Shanghai Zhangjiang Park, with financial support from Pudong New Area. Most of its 114 members are domestic companies.

The organization aims to improve IP cooperation among companies in Pudong district, provide consulting and assist in legal protection.

The Shanghai Biopharmaceutical Industry Association initiated an IP Alliance for its members even earlier, in 2003 following the SARS crisis, to protect domestic companies from foreign IP infringement and promote cooperation with other industrial associations.

By the end of last year, the alliance had helped 25 Chinese pharmaceutical enterprises register more than 50 domestic and international patents and mediated 32 disputes within the industry through legal counseling and analyses.

Cooperation with the police is also key to fighting infringement, so ways to increase awareness in police officers has also been part of the QBPC's task.

It organized a joint seminar with the Ministry of Public Security on criminal investigations into IP infringement cases.

In 1998, the QBPC proposed criminal charges for counterfeiting, but at that time intellectual rights were seen as a civil matter.

One night in 2001, Chang met Gao Feng, a top police officer in charge of IPR cases, at a cafe in Shanghai and both realized that IPR violations were becoming more widespread, including crimes by organized gangs and the use of child labor. Such activity does significant harm to the public and the nation, they agreed.

They then decided to promote a forum to discuss how to protect IPRs using the criminal justice system.

At the first forum in 2002, some foreign companies shared their findings on criminal IPR infringement, the investigation techniques used in other countries and benefits to a nation with a strong protection of IPRs.

What disappointed many QBPC members was that many police officers yawned at the conference or simply left before it was over.

Yet a year later at the second forum Chang was surprised to see numerous officers from provincial police departments making detailed presentations on what they did and will do in fighting criminal IPR violations.

"I realized then if we did not do more comprehensive homework, we might not be able to catch up with the progress of the police," recalls Chang.

He says Chinese authorities have taken action for protection from criminal activity in manufacturing, but more work needs to be done with exporters, as many of them do not want to reveal where they get products and where they sell them.

Other nations like the United States should also make importers accountable, authorities say, rather than just blaming China.

This year, the Chinese and US police worked together on two software piracy cases. The Chinese side arrested 25 suspects, while US authorities issued 24 search warrants and began the search for suspects.

(China Daily 11/19/2007 page9)

2013-07-17