China improves efforts against IPR infringements, better investment climate for foreigners

BEIJING, Jan. 19 (Xinhua) - A local branch of the municipal industry and commerce administration of Hangzhou, capital of east China's Zhejiang Province, is ready to join hands with the France-based luxury goods company Louis Vuitton Malletier in preparations for the nation's first campaign against IPR (intellectual property right) infringements this year.

In mid-January they will jointly launch a preliminary probe into counterfeiting on LV products in the province.

"In the move, once sale of any suspicious goods under LV brand is detected, we'll ask related staff from the French company to determine whether the commodities are shoddy goods or counterfeits. When an IPR infringement is ascertained, we'll deal with it severely," Chen Liang, deputy head of Jianggan station of the administration told Xinhua Wednesday.

Chen said that in 2010, his station detected four IPR infringements on LV brand. Involved were 1,000-odd items of commodities ranging from garments and suitcases to shoes and accessories. One of the cases involved huge amount of money and was dealt with as a criminal case. The counterfeiter concerned received a jail term of 18 months and was fined 143,274 yuan (21,708 U.S. dollars).

In December, Louis Vuitton Malletier presented Jianggan station with a silk banner inscribed with the slogan "Guard of Market" to express the company's gratitude.

The French company was not unique. Last month, another eight Fortune 500 companies, including the Sweden-based Atlas Copco Group's corporate, Caterpillar from the United States and Kabushiki Kaisha Hitachi Seisakusho and Mitsubishi Heavy Industries, Ltd. of Japan, presented horizontal inscribed boards to the Hangzhou industry and commerce administration to show their appreciation for its effective actions against IPR infringements.

"The administration's efficient, just efforts against IPR infringements not only safeguarded consumers' legitimate rights, but also protected trademark owners' interests," said Sachi Nishikawa, IPR staff member with Komatsu Ltd. from Japan.

"In 2000, we built a databank about owners of prestigious foreign brands, such as Chanel, Burberry, Gucci and Omega, and established cooperative relationships with companies concerned with IPR infringements," said Liao Jing, an advertising supervisor with the Hangzhou industry and commerce administration.

The Beijing-based Quality Brands Protection Committee of the China Association of Enterprises with Foreign Investment (QBPC) has 193 corporate members, involving nearly 80 billion U.S. dollars in investment in China. Of the capital, 50 percent came from America and the remaining 50 percent from Europe and Asia.

QBPC Chairman Jack Chang, who is also senior IP counsel for Asia with the GE (China) Co., Ltd., told Xinhua that Chinese enforcement bodies' weak awareness of IPR protection a decade ago let foreign-funded companies down and they complained a lot at that time. However, Chang noted, QBPC saw progress in efforts of related Chinese departments against IPR infringements over the past few years. "Since the committee was established 11 years ago, we have cooperated with a series of Chinese enforcement bodies and, together, found solutions against counterfeiters," he added.

"We've seen IPR legislation becoming increasingly transparent in China, as corporate opinions have been solicited in the process," Chang noted.

He took the third amendment of the patent law as an example.

Suggestions and proposals were solicited from foreign-funded companies in China, and even from councils of commerce in the United States and Europe. Legislators had also teamed up with QBPC in holding international seminars to hear opinions from foreign experts before the revision was completed in 2009.

Also, views from foreign-funded companies in China were solicited for the proposals on justice in hearings on IPR infringements, which were recently promulgated by the Supreme People's Court and the Ministry of Public Security, according to Chang.

Meanwhile, IPR-related law enforcement has improved, he noted.

QBPC joined hands with the IPR court under the Supreme People's Court and the Ministry of Public Security in providing training courses and holding international symposiums for police officers and judges to improve their IPR awareness and upgrade their capabilities in related law enforcement.

Chang said that Chinese customs houses were among just a few in the world which have employed numerous people to confiscate counterfeits and shoddy goods.

Officials statistics show that from 2005 to 2009, the local customs house in Huangpu on the Pearl River Delta, which is an economic powerhouse and a place where many IPR infringements have been reported, exposed 906 IPR infringement cases valued at 122 million yuan and destroyed 20.34 million items of shoddy goods and counterfeit merchandise.

According to the testimony in July 2010 before the U.S. Congress by ABRO, a professional epoxy and cleaner supplier, "ABRO has been pleased, overall, with the efforts of the Chinese government in fighting counterfeiters within their borders. In just this last year (2009), Chinese authorities had raided over 20 major sources for counterfeit ABRO merchandise in China. Further, over two dozen shipments of counterfeit merchandise have been seized and destroyed by Chinese customs authorities on ABRO's behalf."

Chang also cited some new developments in IPR protection in China.

The Ministry of Science and Technology has readjusted policies related to independent innovation and assured foreign-funded companies that they would enjoy national treatment in this regard. In Beijing, medical equipment developed by some QBPC members have been confirmed by the city's commission of science and technology as innovative in China and receive protection by related Chinese laws and regulations.

Beginning two years ago, QBPC has taken new steps against illegal online programs. It guided its members not to place advertisements on web sites that broadcast pirated videos. The move has been widely acknowledged by many web sites with legal broadcasts.

According to China's Ministry of Commerce, Chen Deming, the nation's six-month crackdown on IPR infringements and counterfeiting, a special campaign launched in October 2010, boasted impressive results.

The crackdown has resulted in the report of 16,036 cases of infringement and counterfeiting, the confiscation of 98.77 million yuan (14.98 million U.S. dollars), and the arrests of 4,157 suspects involving cases that were worth 2.3 billion yuan, according to Chen.

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