After years of careful, nuanced and largely unsuccessful diplomacy intended to stop the widespread piracy of American goods in China, the US has shifted its approach and posted an officer in Beijing to address the problem directly.
The appointment does not signal that piracy in China is nearing an end. But US companies, which contend they lose billions of dollars every year to counterfeiting, are relieved that the coming year holds, at the very least, a new strategy.
The International Intellectual Property Alliance, which represents the movie, music and entertainment software industries, has estimated that 90 percent of the DVDs, CDs and digital games hawked by street vendors and sold in shops in China are pirated. Last year, US businesses lost US$2.5 billion to copyright theft originating in China, the alliance estimates.
"The vast majority of copyright holders are not making money in China, or are making a fraction of what they ought to be making or are making in neighboring countries," said Eric Smith, president of the alliance.
The piracy is not limited to the entertainment industry. Batteries, shoes, clothing, alcohol, prescription drugs, soap, cosmetics, toiletries -- even automobiles have been counterfeited and sold in China.
The black market employs thousands of workers and rep-resents a significant portion of the economy. Illicit manufacturers operate factories all over China, where the knock-offs are produced for a fraction of the price of brand-name goods, and are so cleverly packaged that it is hard to tell them from the real products.
Many of the counterfeit goods are loaded onto ships and sent throughout the world, and it can be difficult for distributors to know that they are getting bootleg products.
Five years ago, just 16 percent of the contraband seized at US ports came from mainland China, said Jon Dudas, director of the Patent and Trademark Office. By last year, China accounted for 65 percent of confiscated counterfeit goods, he said.
Donald Evans, the US commerce secretary, emphasized the issue in a meeting this year with Vice Premier Wu Yi (
It chose Mark Cohen, a lawyer in the agency's office of enforcement who speaks Chinese, holds a master's degree in Chinese studies and was part of previous trade delegations to China. Cohen will work out of the US Embassy in Beijing.
In an e-mail exchange from Beijing, Cohen wrote that he had been meeting with US companies and with Chinese officials, and cautioned that "we should not be condemned to repeat the past."
"It's critical that we provide guidance as well as criticism to the Chinese, and that we support our companies by trying to seek protection for their rights," Cohen wrote. "Obviously if you are a rights holder watching infringing actions eat into your bottom line, every day of delay is time that is running out."
Although China has intellectual property laws, enforcement has been sporadic. The alliance reported last October on an increase in raids by Chinese authorities on factories and distributors of fake goods. But it also said that the raids brought no change to the black market because fines against the pirates were tiny, no violators were sent to jail and no criminal cases were started.