If you got together ten experts on China intellectual property enforcement for a chat and asked them to discuss needed reforms, you would probably end up with everyone agreeing on a short list of fixes. That’s because everyone knows what’s wrong and what needs to be done, but moving forward with the resources and institutional will to do so is another story.
What are some of those obvious fixes? Here are my top five, several of which are pipe dreams and won’t happen in the foreseeable future:
1. More resources and training for enforcement and registration staff.
2. Incentivize criminal enforcement authorities to prioritize IP cases.
3. Free judges from certain policy guidance that interferes with straightforward judgments (i.e. forced settlements).
4. Strengthen central control of IP enforcement to crack down on local protectionism and assert more power over local officials.
5. Promote more judicial and administrative communication with an eye towards coordinated activities between agencies and equal application of the law.
These are big picture items, and there are hundreds of technical matters that could also be tacked on to that list. But if you’ll notice, I did not include “Greater emphasis on civil litigation” as a line item. In this, I do not agree with recent government pronouncements.
At a news conference yesterday that publicized IP enforcement measures, Jiang Zhengwei, Vice Minister of Commerce, had this bit of advice:
The current protection of IPR relies heavily on administrative measures, which are fast and efficient but need to be improved.
In the future, China will draw lessons from Western countries and place more emphasis on dealing with these cases in court. We will simplify the process and make it more efficient while cutting the cost.
I don’t know where this idea comes from, and I don’t understand it. Administrative actions (the most common are raids of suspected IP infringers) are indeed fast, cheap, and efficient, and yes they do have their drawbacks as well, many of which I addressed in that list above. Court action is slower and more expensive, but it is also the only way to receive damages from the infringer.
The choice of court versus administrative action (or in a perfect world, going to the police) is a complex one, but it usually boils down to a few factors: speed, cost, and damages.
The above quote suggests that court is the better choice, so the government should make going to court easier. Two problems with this. First, I don’t care how much cheaper and more efficient you make civil litigation, it won’t be able to compete with administrative action. A colleague of mine recently supervised a raid on behalf of a foreign client for about USD 6,000 and the whole thing took about ten days. Try that for a court case — ain’t gonna happen.
Second, in cases where the defendant will not be able to pay damages, there are few cases where court action would be preferred.
So why the emphasis on court action? Here’s the answer, which almost made me start crying:
Feng Xiaoqing, a law professor at the China University of Political Science and Law, noted that taxpayer money would have to be spent if administrative agencies were left to fight infringements of intellectual property rights. Courts, on the other hand, can cover their costs by collecting fees from litigants, making it fairer to rely on them to protect individual rights.
Are you f*^$(ng kidding me? We want to push court action because the costs can be defrayed by litigants’ fees? I’m nearly speechless here. Spending less money is certainly not what leaps to mind when I consider how to strengthen IP enforcement in China.
Here’s what it comes down to. If we’re serious about IP enforcement, then the resources need to be allocated to do it right. If arbitrary decisions about choice of dispute resolution venues are made based on filing fees, then we’re never going to fix these problems.
Let’s get serious.