By Stan Abrams
I confess. I've sold out. I have slid all the way down to being a complete cynic. My idealism has fled. This confession is a long time in coming. I have recently noticed that the subject of intellectual property (IP) enforcement in China, and what will ultimately fix the problem, has come up a lot.

Perhaps it was the recent IP seminar hosted by the US Embassy in Beijing. Maybe it was all the clients I've spoken to this past month with IP problems that asked about "the big picture" or the students that have come in the office to chat for various reasons. Anyway, all this cogitating has forced me to examine my stance on this issue.

My long-standing position on enforcement of intellectual property rights has been based on the idealistic notion that if people understood the vital role that IP plays in commerce, not to mention the moral aspect, that demand would dry up. Yeah, that's what I used to believe, no kidding. I figured that China just had economic growing pains and that a big public education campaign would take care of everything. (I can hear the cynics laughing as I type.)

So what changed? Two things, one that I have ignored or perhaps misinterpreted for the past five plus years and another that is fairly recent.

First, from my personal observations, EVERY foreigner who lives in China purchases counterfeit products. The idea that individuals who understand commerce would not purchase fake goods is not supported all that well by the foreign community here. Over the years, I have attributed this to the general attitude of lawlessness that pervades the souls of many expatriates which, simply put, is that "I'm not at home right now, I'm not a citizen here, and I'm somehow beyond the pale of authority."

This attitude of lawlessness may go some way towards explaining expatriates' actions over here. However, it does not explain why EVERY foreigner who visits China also buys counterfeit products if given the chance. These people are only over here for a couple of days, a week at the most, and consistently snatch up fake Nikes, movies on DVDs, knock-off Rolexes, you name it. What are these people thinking? Even U.S. government employees, such as former U.S. Trade Representative Charlene Barshefsky, have been caught at the Silk Market in Beijing buying fake products.

Does this make the U.S. or other foreign countries hypocrites as they castigate the Chinese government for failing to live up to the promises made when they acceded to the World Trade Organization? Perhaps not. No country can control all of its wayward citizens. However, this does tell us something about the appeal of counterfeit merchandise.

This brings me to my second point, which involves file-sharing of copyrighted works and other Internet shenanigans. I wasn't even aware of this phenomenon until a couple years ago, but it is now rampant in many parts of the world, including North America and Europe. This practice has so worried the entertainment industry that the RIAA (Recording Industry Association of America) has started suing individual file sharers, including the well-publicized case of a 12 year-old American girl who was sharing MP3s; her mother settled for $2,000.

So even in the U.S., with all the knowledge of IP rights and the cultural baggage of morality, Westerners are still violating IP rights. What's the answer? Call me slow, call me stupid, but only now have I realized that the reason why people buy fake stuff and download copyrighted works without paying for them is . . . that . . . they . . . can!

Simple conclusion. Yes, the scales have fallen from my eyes. I wasn't on the road to Damascus, but I had the revelation anyway.

OK, let's stop the histrionics, although as Billy Joel tells us, "Melodrama's so much fun; In black and white for everyone to see." I have debated this with many people over the years, within the context of policymaking. The question is what amount of resources should be spent on education and how much on enforcement? My idealistic view led me to push for education, scoffing at the idea that enforcement of such a widespread problem in such a large country was possible.

My new, pragmatic position is therefore that education ain't gonna cut it. We are all human, which means that we are, to varying degrees, fundamentally selfish. If we can get away with downloading the new Matrix flick for free, we will do so unless someone stops us.

While I vociferously oppose the RIAA's litigation strategy, particularly when 12 year-old girls are involved, I now understand it. Scaring folks might be the only way to make headway on this issue.

What does this mean for China? Well, effective enforcement requires resources and political will: more cops, more raids, tougher judges. While more resources certainly could be made available, the political will is another matter. Perhaps the most difficult issue facing the Chinese government is unemployment. As long as the counterfeiting industry employs a significant number of people, it will be difficult for the Chinese government to get the problem under control.

I think that I've just argued myself to the conclusion that IP infringement will be a problem for a long time to come. Before we all start getting weepy, though, let's remember that infringement covers a wide range of goods, and enforcement is not either "on" or "off". In my five years in China, I have seen enforcement increase tremendously. For companies with patents or trademarks that can identify discrete infringers, enforcement is actually pretty good. We are on the right track, but the track is long and there are many obstacles in front of us. Better to spend time and money wisely than wasting it on idealistic education campaigns.

1 COMMENT

  1. I buy fake products, because it gets annoying to live in China with nothing at all. It is far better to fall asleep listening to music with a fake Ipod than running my computer on batteries for 30 minutes and then having to recharge it. If you happen to notice everything in China is fake. So it is hard to buy anything other than food without it being fake. So tell me if you know where to buy the real deal, let us know. Then you can down us for buying the goods as fakes when that is the only option. Not to mention as a foreigner in China, they will always sell you the fakes at the same cost of the real ones simply for the money. Westerners are a cash cow to the poor Chinese who live off a few hundred dollars a month. China is "buyer beware". Do you think the Chinese would rip off their own kind like that? No they wouldn't. They think we are rich, why sell us the real items and make less profits? You sit there and harp on the lawlessness of foreigners in China, now turn your attention to the Chinese theives. You know the ones who say it is genuine and the real item, but in truth it is a fake that is made for mere pennies to the dollar and yet you pay full price, they make the money off cheating us. So you see I am not really stealing, I am saving money, buying the things that make my life more easy and reducing my chances of being milked like a cash cow does. But then again you are rich. You make 4 thousand dollars US a month, why not harp on those of us who just spent our mortgage payments on a trip overseas, because we know that the chance will never come again.
    And for a little personal info on illegal file sharing, I download. I tell you truthfully, But I ALWAYS buy the CD's later. I like to try before I buy. itunes does not give you the full song, just a 30 sec clip. How would I know if I like the song or not? Why pay for a full song that sounds good for 30 seconds, then sounds like crap afterwards? If the RIAA comes knocking on my door. I will let them in and show them the $800 woth of CD's on my desk. And as for DVD's perhaps you have never downloaded before or not, but most DVD rips and AVI files are corrupt and full of viruses. And how would I know, you may ask….Because I tried that while living in China. I found bootleg copies of American movies dubbed in Chinese and could not stand watching a movie where I could not understand what they were saying. Have you ever bought an American movie dubbed in Chinese before? If you answered yes, then I applaud you for your heretical denial that you just bought a fake!

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