Wednesday, January 28, 2009

U.S. vs. P.R.C. in WTO = KO

Canadian legal blogger - Michael Geist - has a great article breaking down the recent ruling on the U.S.'s complaint against China regarding intellectual property rights enforcement.

The article is titled, "Why the U.S. Lost Its WTO IP Complaint Against China. Badly."

The title says it all. The ruling provides some large loopholes in the enforcement of IP violations under the Berne Convention and TRIPS.

His point about China's high threshold of violations required to pursue a criminal conviction is especially interesting. China requires there to be 500 instances of copyright violation before they will initiate criminal prosecutions.

Mercurio writes:

"It also would seem to allow an individual to rent premises and set up shop selling pirated copies of music/DVDs and counterfeit TMs but avoid criminal prosecution as long as only 499 copies of each item are copied and sold."

What does this mean to the average person?

China's seemingly high threshold for criminal prosecution of IP violations means China can remain a safe haven for the smart counterfeiter.

Utilizing proven business techniques like on-demand production and just-in-time inventory strategies, organized counterfeiters could easily stay below the 500 instances threshold.

"I see you have 499 copies of Underworld: Rise of the Lycans. You'd sure be in trouble if you had one more copy. I'd have to run you in as a counterfeiter."

So if you are looking for cheap knockoffs of Western products, head on down to the PRC.

They are practically given it away! These prices are too low to miss!

And it is all legal - at least under international law.