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Hu Pledges to Protect U.S. Intellectual Property in China: Political Rhetoric or Valid Promise?

Published onFeb 16, 2011
Hu Pledges to Protect U.S. Intellectual Property in China: Political Rhetoric or Valid Promise?

On January 19, 2011, President Barack Obama and Chinese President Hu Jintao pledged cooperation on, among other things, intellectual property at a joint news conference held during President Hu’s three-day visit to America.  According to a statement released by the White House, China has agreed to the following:

….to hold accountable violators of intellectual property on the internet, including those who facilitate the counterfeiting and piracy of others, and to strengthen IPR protections in China’s libraries.  China has also agreed to clarify the IPR liabilities of relevant third parties, like landlords, managers, and operators of markets that sell counterfeit products.

China’s lax enforcement of intellectual property rights has long been a source of contention between the two economic superpowers.  China, a frequent guest on the International Piracy Watch List, is home to one of the largest counterfeit and piracy markets in the world.  According to the U.S. Customs Border Patrol, during the fiscal years 2004 through 2009, China made up 77 percent of the aggregate value of counterfeit goods seized in the United States.  Additionally, during the summit, President Obama, in discussing Microsoft CEO Steve Ballmer’s concerns about intellectual property protection, called attention to an even more alarming statistic – an estimated 90% of Microsoft software users in China are using a counterfeit version.

This is not to say that China has turned an absolute blind eye to this pervasive issue.  Not only does China have anti-piracy and anti-counterfeiting laws and regulations, but it has also conducted official crackdowns and successfully prosecuted several counterfeiters.  In 2005, China’s National Copyright Administration began a campaign to combat the rampant piracy that raged in its country.  The Administration reported that “as many as 2,621 cases concerning Internet piracy had been handled, among which 91 serious cases were sent to judicial authorities and 1,198 illegal websites involved in copyright infringements were forced to shut down.”  The Chinese government has also implemented increased supervision over major Internet enterprises in an attempt to stop the spread of piracy.  In April 2010, a Shanghai court ordered Dazhong Insurance, a Shanghai-based company, to pay Microsoft 2.2 million yuan (US $320,000) in damages for using illegal copies of Microsoft software.  Beijing reported this past month that it had arrested more than 4,000 people suspected of intellectual property violations since November as part of a six-month nationwide crackdown on counterfeit goods.

In an acknowledgment of China’s past and present enforcement efforts, President Obama stated, “The Chinese government has, to its credit, taken steps to better enforce intellectual property. . .  And I think President Hu would acknowledge that more needs to be done.”

In the wake of the summit, one has to wonder whether China’s efforts to combat intellectual property violations are of any actual sustenance or merely a well-timed display of political action.  I am of the opinion that China’s national government is making a good faith effort to strengthen and enforce its intellectual property rights; the problem, however, is not with the implementation of the regulations, but with the enforcement of those regulations.  According to Daniel Chow, a professor at Ohio State University College of Law, the core of the problem is neither the central government nor the courts, but rather the problem lies with the actual enforcers (or non-enforcers) of the anti-counterfeit and piracy policies – the local government.  Chow states, “The central government is probably sincere but enforcement occurs at the local level, and local governments have a direct and indirect interest in protecting counterfeiting, which is important to the local economy.”

In spite of China’s numerous anti-piracy campaigns and the growing amount of civil intellectual property cases in Chinese courts, intellectual property violations remain at “unacceptably high levels,” resulting in serious harm to many US businesses.  Professor Chow, contributing this phenomenon to local government officials trying to protect jobs and maintain the fast economic growth, said, “If the local government cracks down on counterfeiting, millions of jobs will be lost, not just in counterfeiting but in legitimate industries that support counterfeiting and millions in tax revenue.”

While local government officials certainly play an active role in the rampancy of intellectual property violations, President Hu has pledged to “take new steps to combat theft.”  As part of China’s resolve to show its commitment to its pledge to protect intellectual property rights, more than 8,000 counterfeit goods including fake Nokia, Motorola and Apple laptop computers, cell phones, earphones, and CDs as well as pirated Gucci bags and books were destroyed or donated to Red Cross societies and countries that had been devastated by natural disasters on Tuesday, January 25.

Only time will tell if President Hu’s commitment will remain steadfast after the dust from the Hu-Obama Summit settles, but I certainly hope that China’s present actions are an indication of its future intentions.


*Tierryicah Mitchell is a second-year law student at Wake Forest University School of Law and is Secretary of the Black Law Student’s Association. She holds a Bachelor of Arts and Science in Political Science and History from the University of North Carolina at Chapel Hill.  Upon graduation in 2012, Ms. Mitchell plans to work for the federal government.

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