Legislators call on government to use WTO to prevent counterfeiting

Expressing concern over the growing problem of counterfeit production in China, local legislators yesterday called on the government to seek WTO mechanisms to help solve the problem.

Legislators say the rampant copying of Taiwanese inventions by Taiwanese investors in China could seriously damage Taiwan's traditional industries. The WTO, therefore, should be used as a vehicle to solve cross-strait issues after both sides join the trade body.

Independent legislator Hsu Tain-tsair (許添財) told the Legislative Yuan that some Taiwanese companies, which invent their own products such as seasonal and holiday decorations, have suffered by having their inventions copied and then manufactured by Taiwanese businessmen in China.

"Their products have been seriously counterfeited and manufactured at a scale tens or even hundreds of times greater than the original amount produced in Taiwan, taking advantage of cheaper labor costs in China," said Hsu.

Taiwanese businessmen hurt by the practice cannot be fully protected by applying for patents abroad, because of the short-lived nature of these types of products, he said.

Additionally, the current intellectual property rights laws implemented in Taiwan might not fully regulate Taiwanese investors in China.

The problem would eventually cause serious damage, particularly to Taiwan's traditional industries, he said.

"The government should impose more severe punishment on them at home and also seek to use WTO mechanisms to demand China tackle the problem based on bilateral negotiations after both sides join the WTO," he suggested.

The government might even seek WTO arbitration, he added

Once both sides join the trade body, it is expect that they will engage in bilateral negotiations not required for WTO accession.

"The relevant authorities in the economics ministry will study the issue and also address it in our bilateral negotiations with China, which has been stalled and we hope it can to be resumed soon," said economics minister Wang Chih-kang ( 王志剛 ).

However, legal experts said that while counterfeiting in China by Taiwanese producers is a big industry, WTO regulations are not appropriate for tackling cross-strait counterfeiting.

"Taiwan invested counterfeiters are notorious for violating the intellectual property of other Taiwanese companies, at both the high-end and low-end, as well as international name brands," said Nicholas Chen (陳文俊), a lawyer who also heads the China Business Committee at the American Chamber of Commerce in Taipei.

"As low-end counterfeiting in Taiwan has become less profitable, these elements have migrated to China for the domestic and export markets," he added.

But Chen stressed that relying on the WTO to address these issues is misguided, since the WTO deals with trade in goods and services. The WTO does not focus on cross-border enforcement against criminal activity.

There are many laws in China that are relevant to intellectual property protection in China, including trademark law, patent law and copyright law.

The enforcement of rights is handled directly by companies who hire investigators and lawyers to bring administrative, criminal and ancillary civil litigation," Chen explained.

According to Chen, the IPR laws in China do have standing if a company or industry association wishes to protect its market and products.