Beijing Puts First-Ever Piracy Criminal in Jail

After promising for years to start cracking down on rampant piracy, a Chinese court has now handed down a one-year jail sentence to a Beijing man for selling fake DVDs. This marks the first time a person in the Capital has been convicted and sentenced to prison for the crime of theft of intellectual piracy, according to the Chinese Xinhua news agency. The pirate is Zhou Cheng, 40, who was also fined 10,000 yuan ($1,430) for selling illegally-mastered DVDs at a store in Beijing's Chaoyang district where authorities found 10,000 illegally copied discs. China is the world's biggest source of pirated goods.

The West has long been exasperated by the lawless nature of the Intellectual Property Rights regime in the world's most populace country. When in China, it is common to find a myriad of faked goods from designer handbags to computer software sold on street corners, in markets and in higher-end shopping areas. The country has been struggling to take a stand against intellectual property piracy, which has been a top priority for Beijing ahead of the upcoming Olympics in August. Washington filed a WTO complaint in April 2007, stating Beijing was violating its trade commitments by failing to stop piracy.

The top court in China has made easier prosecution of those discovered manufacturing or selling fake goods, by lessening the amount needed for conviction. Now, anyone making 500 or more faked copies of movies, CDs, software or other copyrighted items can receive up to seven years in prison. Also, a China has created a tip program to reward those who turn in pirates, and these informants will be paid 100,000 yuan or almost $15,000. A hotline has been setup for citizens to snitch on copyright violators and also an email address for residents to send in names.

The law covering Copyright protection is broadly covered by the Act: Implementing Regulations of the Copyright Law of the People's Republic of China, in Article 47. This says:

 Audio and video recordings produced and distributed in the territory of China by foreign  producers shall be protected by the Law.

The punishment for copyright violation is found in: CHAPTER VI, Administrative Sanctions Article 50. This states:

 Infringements against copyright  shall be liable to the administrative sanctions to be imposed by  copyright administration departments in the form of warning, injunction in relation to the  production and distribution of infringing copies, confiscation of unlawful gains and seizure of  infringing copies and equipments used for making infringing copies, as well as fine.

The related fines involved are found in Section 51, and can run anywhere from 100 to 100,000 yuan in RMB.

But faux DVD's are just the tip of the iceberg, as China’s piracy economy is bigger than almost any foreigner can imagine. There is a robust and growing industry of fake motorcycles, cars, designer clothing, cell phones and every conceivable electronics product. In China, even items that would not immediately strike the imagination as profitable to fake are copied, such as razor blades, toothpaste and drugs. And the copycats are done so well they are normally indistinguishable from the original. Analysts believe piracy contributes a third to China’s GDP.

But the Government is showing a different face ahead of the Olympics.  Yi Xintian, a spokesman for the State Intellectual Property Office said, "The Chinese government has taken concrete steps and its success is there for all to see. We are extending comprehensive and strict protection to Olympic intellectual property. The Chinese government has the resolve and capability to make sure that during the Olympic Games we create a favorable climate for intellectual property."

Obviously there are some in the Chinese Government who are reluctant to crackdown on an industry that needs almost no influx of research and development funding, and produces a massive return. But China will realize that the rewards of protecting Intellectual Property are greater than those for lawlessness for an up and coming economy like China.