Policing pirates

When Intel executives arrived in Chengdu, Southwest China in 2004 to explore the opportunity of opening a second chip packaging and testing facility in the country, they were greeted with more than food and hospitality from their hosts.

They were also given a handbook by local officials that not only informed them how the city had performed in protecting intellectual property, but also included phone numbers of police officers and intellectual property officials that Intel could contact to ask for assistance.

The handbook was not the most important reason that Intel finally chose Chengdu, but the city's earnestness in protecting intellectual property added to the score.

The Chinese government, trying to strengthen its intellectual property protection across a wide scope, plans to build a similar liaison system between the police and intellectual property holders to protect their rights, as well as the public's interests.
Gao Feng, deputy director of the economic crimes investigation bureau of the Ministry of Public Security (MPS), said at a July 24 forum on intellectual property crimes that the ministry is working on a liaison organization with key companies, both local and foreign.

He said police departments should keep close contact with key enterprises with large intellectual property pools and learn what their needs are and how the police can help them.

"Through this kind of cooperation, we hope we can build an expressway and powerful platform together with enterprises to fight intellectual property infringement crimes," says Gao.

Xu Wenhai, director of the economic crimes investigation bureau at the Department of Public Security of Guangdong Province, says his department started to build such a liaison mechanism in 2003, through which more than 10,000 enterprises have had a regular channel of communication with local police.

He said police officers often go to enterprises to brief them about new regulations or laws on intellectual property protection and inform them of the characteristics of investigated crimes so they better protect themselves.

In Tianjin and Shandong, police officers established a database on famous or well-known brands in their regions so they can easily identify fake products.

However, Gao also urged enterprises to contribute their own efforts to help the police find criminals by providing lists of dealers and distributors of genuine products.

In addition to working with enterprises in China, the ministry is also increasing its efforts to cooperate with its overseas counterparts to strike at transnational criminal cases.

The economic crimes investigation department of MPS was given the highly commended public organization award on June 26 by the Global Anti-Counterfeiting Group and publishing group Reconnaissance International.

It was the second year in a row that a Chinese government department won the award for its performance in stopping counterfeits. Last year, the Chinese customs won the same award.

In March, Chinese police authorities and the United States Department of Justice formed a joint working group to protect intellectual property.

Sino-US anti-piracy raid

The ministry said on July 24 that it had worked with the US Federal Bureau of Investigation from July 6 to 16 to arrest 25 criminal suspects.

Police in Guangdong Province arrested 14 pirate disk makers and distributors and confiscated over 70,000 illegal copies of Microsoft WindowsXP, Vista and Office, over 235,000 software certificates and 22 software master disks used for reproduction. The software was sold in the US, the United Kingdom, Israel and Australia.

In Shanghai, 11 people were arrested and police froze more than 4 million yuan in assets involved in suspected criminal activity. The group is suspected of making pirated software from Apple and Symantec.

In the US, FBI agents conducted 24 searches and seized counterfeit software products worth $2 million and assets worth over $700,000.

"We have set a good example in cooperation in protecting intellectual properties with these operations," says Steven Hendershot, FBI's legal attach in Beijing.

Although encouraged by the achievements in Sino-US joint operations, Gao with the Ministry of Public Security called for overseas authorities to work more closely for better protection of not only Chinese interests, but also their own.

On July 25, representatives from China, the US, the UK, Australia, New Zealand, Japan, the World Intellectual Property Organization and Interpol signed a Shenzhen declaration calling for deeper cooperation among countries to fight intellectual property crimes.

Gao compared counterfeits and piracy to drugs, which have huge returns and damage to society, as pirated software has a profit margin as high as 90 percent and making fake Viagra has a return of almost 300 times, so criminals are willing to take the risks.

According to Xu Hu, deputy director of the department of public security with MPS, Chinese police confiscated 231 pirate disk production lines since 1996, reducing production by 200 million illegal copies.

He said disk-making equipment was almost all imported, mostly from Europe.

"It is a regret that some countries only accused China, but they did not take their due responsibility," says Gao.

The Chinese side suggested that disk-making equipment manufacturers establish a tracking system so that equipment can be traced and criminals can also be found through that information.

"The biggest obstacle in international cooperation is differences in legal systems, so we have to fight against criminals on one hand and bureaucracy on the other, which has compromised our efforts and reduced efficiency," says Gao.