Tougher penalties await copyright infringers

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BEIJING -- Copyright and patent violators soon could face longer jail terms and higher fines in China if tough new sentencing guidelines are enforced, experts said Thursday.

Chief Justice Jiang Zhipei of the Supreme People's Court said a document released late Wednesday will serve as a guideline for the nation's thousands of intellectual property rights cases and will try to raise the cost of breaking the law, the China Daily reported.

The new guidelines from China's highest court empower judges at all levels across the country to hand down more jail time within the scope of the law, giving, for instance, IPR violators six or seven years' jail time even if the law says the nature of their crime demands three to seven years.

"We should not only sentence such offenders in a determined manner, but also make it economically impossible for them to commit the crime again," Cao Jianming, vp of the court, told the state-run newspaper.

IPR protection in China is covered by civil, administrative and criminal regulations, and courts across China are handling an increasing number of cases each year -- 16,583 civil and 3,567 criminal IPR cases in 2005, up 21% - and 28%, respectively, from 2004, showed data from the State Intellectual Property Office (SIPO).

Foreign businesses at the front of the public anti-piracy charge in China have long complained that too few IPR violation cases are handed by criminal courts and that the civil and administrative punishments handed down are weak deterrents to criminals making a killing by stealing everything from movies to car parts.

To take an example cited by the China Daily, a couple in Qingdao, an East China port city in Shandong Province, were fined 20,000 yuan ($2,600) for selling 2,900 pirated DVDs and possessing 19,000 more. In other words, since the average pirated DVD sells here for $1, the couple was fined less than they probably grossed on the street and not at all for their contraband inventory.

The new sentencing guidelines harden a judicial interpretation from two years ago that did not say which offenders were considered "serious" and deserving of a criminal trial and hard punishment.

Experts say prosecutors largely still will determine who is called a "serious" IPR offender in need of a criminal trial. However, the new guidelines instruct China's lesser civil and administrative courts strongly to consider the possibility that cases they are handling should be tried in criminal court, thus exposing lesser defendants' cases to transfer to criminal court, severe fines and sentences of three to seven years in prison.

The high court's public announcement of its tougher stance could make it hard for authorities at all levels to shun IPR enforcement and punishment of violators.

"This is the salient point: the high court has spoken and now the rest of China's authorities can no longer excuse their inaction," Lester Ross, chief China representative of U.S. law firm Wilmer Hale, said in a telephone interview.

Could this change in tune be a remedy to past inaction seen in SIPO data showing that only 1% of China's anti-piracy cases met with a judicial punishment in 2004?

"We look forward to the implementation of a tougher stance against IPR crimes by the Chinese courts and will be monitoring the results closely," Mike Ellis, senior vp and Asia Pacific director of the Motion Picture Association, said in an e-mail.

The guidelines came on the heels of Beijing's announcement of a four-year IPR protection plan and the European Union's saying on Wednesday it would grant China $48.2 million to help stamp out piracy (HR 1/17).
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