Building up a Bridge of Communication; Eliminating Prejudice between China and Foreign Countries

2008/04/01,By Harry Yang, China IP,[Comprehensive Reports]

During the 8th anniversary celebration of the QBPC held in March, Jack Chang, Chairman of the QBPC, delivered a speech in both English and Mandarin and demonstrated his talents in public speech. Only a few minutes' talk with Jack after the anniversary, I was deeply impressed by his gentleness and modesty. A special interview with him is more than a delight. He is highly logical and has outstanding in use of language. He developed the topic with vivid case studies and detailed data.

When people become aware of Jack Chang's profound knowledge and brilliant speech, they often think that he is a graduate from some prestigious American universities. In fact, he never studied abroad. He was born and raised in Taiwan. At the age of eight, his farther died and thus began his path full of difficulty and hardship. Coming from a poor family, after graduation from junior high school, his only choice was to attend an evening commercial high school. He delivered goods during the daytime in order to earn a living and studied at night. He was finally admitted to Soochow University as a law major after years of self-education under such hard condition. He also practiced hard and became very fluent in English. After one year of preparation, Mr. Chang passed the Taiwan Bar Examination, which was very difficult and had a passing rate of only 6%. 

After graduation from Law School of Soochow University, Chang worked for Johnson & Johnson (Taiwan) as an in-house counsel and had participated in numerous litigations. With permission of the company, he also involved in community services and provided free legal assistance to the poor. He gained rich litigation experience in these practical activities. Mr. Chang is quite proud of himself about the fact that he never lost any lawsuits in Taiwan. With accumulation of legal experiences, Jack got in-depth understanding of laws. He summarized his experience as follows: "To learn law, we must use it flexibly based on different facts and evidences. It is useless to learn on a routine manner by memorizing it or consider law simply a tool. And we shall always keep in mindthe principle of justice."

With his office based in Taiwan, moving to the US and then back to China, from Johnson & Johnson (J&J) to GE and also served as the QBPC Chairman, Chang has benefited greatly from every working experience. He states that "People usually think my experience is unbelievable. For me, I am enlightened much by my social experiences. It is truly good to study abroad and enrich your experiences. But if you don't have this chance, you can still create many opportunities to experience different social exposures. And if you do this, you can also make great achievements." He hopes that his own experience will encourage and inspire young people in today's society.

Early in the mid 1980s, Chang began studying the differences of IP legislations between Taiwan and the Chinese Mainland. After graduation from Soochow University, he worked for the IP Department of Lee and Li Attorneys-at-Law, one of the leading law firms in Taiwan. In 1997, by coincidence, he heard a speech by Jiang Zhipei, Chief Judge of the Intellectual Property Tribunal of the Supreme People's Court of China, on the status of IP development in China. This affirmed his determination to study IP laws of the Mainland. Later, he enrolled as a graduate student at the East China College of Political Science and Law (now known as East China University of Political Science and Law) to further his studies in this field.  

First interaction with China's IP Law Enforcement; destined to be in Shanghai

Since late 1997, Chang was recruited by the Corporate Law Department of J&J. He is the first non-American attorney employed outside of the United States by the company. J&J originally planed to relocate him to Singapore and later Hong Kong, but he requested to work in Shanghai as he was of the opinion that the future development of the world economy would concentrate on the Asia-Pacific region while China would be the engine of this region. His tie with Shanghai may be traced back to his parents' generation who got married in Shanghai in the old days. In January 1998, Chang moved to Shanghai and set up the Asia/Shanghai Office of the Corporate Law Department for J&J. 

Chang was a general legal counsel at Johnson & Johnson, but he is very interested in the field of IP. Soon he involved himself in the company's IP affairs. At that time, a formerly very profitable company of J&J was facing the situation of closing down and withdrawing investment due to the impact of counterfeits within a period of one and a half years. J&J hired investigation companies to file complaints to the law-enforcing departments. Although many counterfeit cases had been investigated and handled, the decline in sales could not be stopped. At this time, Jack went into the filed and joined the law enforcement's raid actions against the counterfeiters. He tracked down to the source of the problem by careful investigation and analysis, as well as cooperated with the public security authority in Jiangxi and Shanghai to investigate the source case. The result was rather astonishing: under the organization and control of a small group of ring leaders, more than 100 counterfeit product manufacturing factories/sites were cultivated in 17 provinces and 2 municipal cities.

During the process of law-enforcement, Jack Chang witnessed an incident that a law enforcement agency refused to accept a bribery in the amount of RMB500,000 but insisted on the enforcement of the laws. He also witnessed the poor enforcement environment with no resources in those remote areas. He said, "Through these cases, I realized how big the gap was in terms of public IP protection awareness and law-enforcing resources in different areas in the broad geographical span of China. And I came out with an idea that we shall promote every achievement that Chinese law enforcement departments made, and award them with encouragement and honor." Therefore, Jack Chang introduced to the then senator of the State of New Jersey the situation about the Chinese law –enforcement departments' efforts in IP protection for J&J's affiliated company in China. The New Jersey senator wrote a letter highly commented the achievements of Chinese law enforcement departments. The letter raised great attention when Ambassador Li Zhaoxing transferred it back to China.

Thereafter, Jack Chang submitted to the State Council a report enclosed with detailed data, charts and photos with the title "Why China cannot stop counterfeiting? This is a new trend and this is our recommendation." He didn't even know the exact mailing address and just put down on the envelope "Zhong Nan Hai, Beijing." To his surprise, then Vice Premier Wu Bangguo, issued a directive to the Office of Cracking down on Fake Products (State Bureau of Technical Supervision) within one week after receiving the report. On receiving the directive, the Bureau (now the General Administration for Quality Supervision, Inspection and Quarantine) deployed and launched a campaign in 17 provinces and 2 municipal cities in June and July respectively to jointly crack down counterfeit products of the brand of J&J. The action turned out to be very successful. One month later, this J&J Company's sales volume recovered by 100%, and business resumed to normal finally. Soon after, J&J further expanded the production lines of this J&J Shanghai Company, of which the products were even exported to foreign countries. This successful anti-counterfeiting case enabled Jack Chang a deep dive to the situation of China's IP law-enforcement and Chinese leaders' determination and recognition of fighting against IP infringements. In his opinion, the key to IP protection is what the Government and industry should do and how to do it.

Building up a Bridge of Communication; Eliminating Prejudice between China and Foreign Countries

In 1998, Jack Chang, on behalf of Johnson & Johnson, together with representatives from BAT, Coke Cola, Gillett, Nike, S.C. Johnson, Unilever & P&G started sharing experiences in anti-counterfeiting and submitting suggestions to the government. Later, more companies jointly registered the China Anti-Counterfeiting Coalition in Hong Kong in 1999. At the suggestion by the Ministry of Foreign Trade and Economic Cooperation and the China Association of Enterprises with Foreign Investment, and taking into consideration of needs of operation in the Chinese Mainland, they founded the Quality Brands Protection Committee (QBPC) under the China Association of Enterprises with Foreign Investment in March 2000. Number of member companies increased from 28 at the beginning to the present 181. Jack Chang was the chairman of the Legal Committee of QBPC in 2001. In 2002, he became the vice chairman of QBPC, and was elected as chairman since 2003. Inspired by Johnson & Johnson's successful experience in protecting its rights, Jack Chang proposed to QBPC to hold an award ceremony annually to commend ten best cases in IP protection. Now, this event has become a well-known brand of the QBPC. At the 2008 QBPC 8th Anniversary and at the 2007-2008 10 Best Cases Award ceremony, Jack Chang invited Mr. John Newton, the responsible person of IP Department of the International Criminal Police Organization (INTERPOL to present the award to Chinese police units. Mr. Newton said, "The winners of the best criminal cases are role models for other investigation personnel of IP criminal cases in the areas with hard conditions to make achievements. Every awarded case serves a best evidence of Chinese polices' commitment and determination in fighting against cross-border IP crimes and making contributions to IP protection!" He also mentioned that he would convey his speech to 186 member states/areas via INTERPOL internal communication material.

Jack Chang defined QBPC as a communication bridge and he himself is dedicated to eliminate prejudice between China and foreign countries via this platform. At the 1st Global Congress on Combating Counterfeiting co-organized by WCO, WIPO and INTERPOL in Brussels in 2004, Jack corrected the misleading statement delivered by a WHO expert in his speech that "192,000 Chinese people died of consumption of fake medicine in China" in front of more than 400 representatives from 64 countries. Before the Congress, Jack already threw doubt upon this figure when he saw the report in China. He took every effort to confirm with foreign media and finally found out that the origin of this report was Shenzhen Evening, which said that "Many Chinese people are victims of drug abuse and adverse effect. 190,000 people have died of side effects of medicines due to abuse and adverse effects." However, the number was reported by foreign media as "fake medicine causes delays in treatment or people die of infection of using the fake drugs. Actual death toll is possibly far above it." Jack Chang brought the original texts of several related press reports to the Congress as proofs for his clarification.

In some way, China's reputation was protected by Jack Chang's curiosity of things and his will to find out the truth, as well as his persistence. He never anticipated that in the same year when he was attending an activity in Guangan of Sichun Province, Vice Premier Wu Yi, after learned about Jack Chang's clarification at the Congress, found him out among the crowd and told him "you have made contributions to China. Continue the efforts!" Now, Jack Chang still hangs his photo with Vice Premier Wu Yi on the wall of his office.  

From this Global Congress, Jack Chang realized that the international community has limited knowledge about the status of China's IP protection. He also realized QBPC can be more influential if it serves as an international bridge in IP protection. In November 2005, Chang attended the 2nd Global Congress Combating Counterfeiting & Piracy held in INTERPOL's headquarters in Lyon as a speaker. During the small group dinner banquet for speakers, a responsible person of an internationally well-known association asked him whether the Bvlgari watch he was wearing was fake. Chang put the watch on the person's hand and said, "I bought this watch from the Bvlgari Shop on the Fifth Avenue of Manhattan. I don't know whether it is genuine or fake. Would you please check it for me?" The person was embarrassed by Chang's words. Taking this opportunity, Chang said to all representatives that the international cooperation in IP enforcement should be based on mutual trust. He proposed that during the period of Beijing Olympic Games, all Chinese people and foreign travelers should say no to pirated and counterfeit goods, and expect that all international IP organizations promote the international collaboration of IP protection and support Chinese government to create an environment of fair competition. All representatives present echoed to his proposals. Then Chang suggested joint signatures, but found no paper. So he asked people to sign on the banquet menu bearing the logos of INTERPOL and WCO on it. Those, who signed on the menu, include the former Vice Director-General of the WIPO, the Secretary-General of WCO, the Secretary-General of INTERPOL, the Secretary-General of the International Chamber of Commerce, the  President of the International Trademark Association, and governmental officials from the U.S. and Japan. This menu is now also hung in Jack's office. And it is also copied by his QBPC colleagues and hung in their offices. This story is an encouragement to both Jack and some of his QBPC colleagues. Eliminating prejudice between China and foreign countries has become their mission of life.    

The efforts made by the QBPC also won the recognition and acknowledgement by the Chinese government. In 2004, at the Forum of IP Protection of Foreign-invested Enterprises held in Xiamen, Vice Premier Wu Yi said to Chang after his speech, "I shall learn from you, Mr. Chang, for your work style of carefulness and persistency. You have the courage of pointing out shortcomings of our work and raise constructive and feasible suggestions. The QBPC is very good. It is my right hand assistant!"

In April 2008, during his speech at the "China High-Level Forum on IP Protection", Mr. Chang said "we don't agree to the prejudices of some foreign friends against China. Nor do we agree to the prejudices of some Chinese friends against foreign enterprises…We believe that both Chinese enterprises and foreign companies are on the same boat. What lies between us should be healthy competition and interaction. IP Infringer is our common enemy. It is our sincere hope that the international community could get rid of their prejudices and jointly fight against cross-border transactions of counterfeit goods."

Involvement in Law Amendment to Ameliorate China's IP Protection Environment

Jack Chang never gave up his studies in IP theory after his engagement in practical IP protection works. In 2000, after research, Chang came out with his comment on the amendment draft of Product Quality Law, and had it submitted by Mr. Zheng Jianling, who was then the NPC delegate of Shanghai City and the deputy director general of Shanghai Municipal Bureau of Audit. Out of his expectation, his proposal was accepted by the National People's Congress as one of the nine motions accepted by the NPC committees that Shanghai delegation made that year. The revised Product Quality Law of 2000 adopted Chang's suggestion in Article 61. The article was revised to "…or provides techniques for manufacturing of fake products… it shall be punished in accordance with law."

In July 2001, Bian Yaowu, deputy director of Commission of Legal Affairs under NPC Standing Committee, went to Shanghai to solicit comments from industry to the amended draft of the Trademark Law. Jack Chang said that foreign enterprises were confused by one specific article in the Trademark Law, which stipulates that "If a crime is constituted, criminal liabilities shall be pursued under the law." Since AIC was the agency enforcing the of Trademark Law, in practices, foreign enterprises often came across the situation that some AICs refused to transfer the cases to competent authorities, with the excuse that according to Trademark Law, a person may be prosecuted  only when he committed a crime. Therefore, the AIC argued that they would not transfer the case since they could not determine whether the crime is constituted. And foreigners misunderstand the article that it is subject to AIC to determine whether trademark crime is constituted. Jack Chang proposed the revision that "Where a crime is suspected to have been committed, the case shall be transferred to the judicial authorities in a timely manner to be investigated in accordance with the law." His suggestion was finally adopted in Article 54 of the revised Trademark Law. 

After that, Jack Chang has raised suggestions on behalf of QBPC regarding the amendment of laws, regulations and judicial interpretations. After new laws are promulgated, QBPC cooperates with related departments to conduct nationwide trainings on the implementation of laws. In February 2007, with the permission of the Legislative Affairs Office of the State Council (SCLAO), Jack Chang contacted some internationally influential commercial associations in Europe and America and the International Chamber of Commerce, and forwarded their written comments on the draft revision of the Patent Law to the SCLAO. In October of the same year, Jack Chang and his QBPC colleagues cooperated with the SCLAO to hold the International Conference on the China Patent Law Amendment. Many foreign experts publicly stated that the procedure of the revision of China's Patent Law is the most transparent one among all revisions of patent laws of foreign countries that they've ever participated. Jack Chang pointed out that his QBPC colleagues had made tremendous efforts to help improve China's IP environment. GE's encouragement to employees to participate in pro bono work to bring benefits to the society is a great support to his making continuous efforts to the QBPC.

To this issue, Jack Chang said that "As long as the environment of IP protection is improved, it will attract foreign investors. If the rules of the game are transparent, if the legislation and enforcement are transparent, it will win the trust of the public and foreign investors. Only on this basis will it be barrier-free for foreign investors to introduce technology and projects. For Chinese enterprises, musicians and writers, on the other hand, their creations and works can also be well protected. This is beneficial for us all."

From Fire Fighting to Fire Prevention ——Cosponsoring the China Forum on Criminal IP Protection

After understanding the law enforcement in China, Jack Chang felt that administrative law enforcement serves as fire fighters. They were fire fighting where there was a fire alarm. But limited by legal means, it's hard for them to find out the arsonist. Effective criminal investigation by the public security is an effective way to hunt down the arsonist behind the scene. "Since 1998 when we proposed that China should reinforce the criminal IP protection, public security shall set up a practical standard for case filing and investigation. But at that time, the Economic Criminal Investigation Department was newly established and was faced with more important cases than IP protection. In late years, China's criminal IP protection did not receive enough attention as it should have." Chang said.

Until one night in 2001, Jack Chang and Gao Feng, deputy director general of the Economic Criminal Investigation Department (ECID) of the Ministry of Public Security had a meeting in Shanghai. Gao mentioned that "IP crimes have had a serious impact on China's national economic security." He proposed that enterprises should fulfill their social responsibilities and jointly hold the trainings on IP criminal protection with the ECID to raise the IP awareness of local police officers. The first training seminar was held in Qingdao in April 2002, organized by the ECID and sponsored by QBPC. Deputy Chiefs in charge of economic crime investigation from provincial and city level of China attended the meeting. The meeting set a specific theme: to enhance IP protection awareness. At the end of March 2006, China Forum on Criminal IP Protection was held in Shanghai, and it was organized by the Ministry of Public Security and sponsored by the QBPC. More than 300 representatives from public security agencies, related ministries and commissions, judicial authorities, administrative law enforcement departments, INTERPOL, law enforcement agencies from different countries and industry representatives attended the meeting. The theme of the forum is "cracking down on criminal infringement: communication, cooperation and progress." The representatives had in-depth discussions on Chinese public security agencies' policies and successful experiences in cracking down on IP crimes; the experiences in law enforcement and legislation of different countries; strengthening communication and cooperation of international law enforcement; and establishment of partnership between the government and private sectors. During this forum, the Shanghai Initiative was discussed and approved, aiming at encouraging public securities to timely accept and investigate into suspected crimes, strengthening international cooperation and fighting against IP crimes.

In July 2007, China Forum on Criminal IP Protection was held in Shenzhen. The Ministry of Public Security invited many foreign police liaison officers in China to attend the forum. Before the Forum, QBPC nominated the ECID of the Ministry of Public Security to the Global Anti-counterfeiting Organization (GACG) running for the Government IP work Award. After careful review and examination, the board of review of GACG decided to grant the high commended award to the ECID of MPS. Mr. John Anderson, Chairman of GACG, came to China in person to present the award at the opening ceremony of the Forum. Furthermore, the public security was identified as the most efficient IP criminal protection department in the survey among members conducted by QBPC in 2007. Jack Chang said, "We have witnessed the evolvement of IP protection from the stage of ‘fire fighting' by the administrative law enforcement to the present stage of effective criminal investigation to track down the arsonist. We come to realize that right owners still have a lot to do. We must first improve our own business processes. It has to be without loopholes, so that there is no opportunity for infringers to get in the supply & demand chains. Therefore, fire prevention, arsonist hunting and fire fighting are of equal importance." Jack Chang opined that the progress of criminal IP protection in China throughout these years, the ECID of the Ministry of Public Security deserves the credits.

In Chang's opinion, the overall IP protection environment is now much better than it was five years ago. However, the pattern of IP infringement is dynamic and keeps changing all the time. The situation becomes more and more difficult. The trend of counterfeiting is transforming from products with low technology to products with high technology and high add-value. At the same time, counterfeiters are focusing on products with high profits. After they accumulate sufficient capital, technology and experience, they will also upgrade their equipment for counterfeit product manufacturing and they will be more professional and sophisticated in counterfeit techniques. Their trans-provincial and trans-national production and sales network will become more organized.  Therefore, in this respect, right owners and law enforcement departments will encounter more professional antagonists. This is an inevitable trend.

China still has a long way to go in the field of IP protection. China enjoys so large a territory and law enforcement levels vary in different areas. Law-enforcement agencies in coastal areas are much more experienced than those in the inland. Infringers tend to swarm to the inland region. They split a project into parts, and collaborate with foreign sellers through the Internet. Their professionalism requires law-enforcement officers to improve their capabilities and gain more experiences as well. And it takes time to build up their international vision, to strengthen their foreign language skill and their ability to understand of the international trend of IP protection.

Jack Chang indicated that to become an innovative country, China shall, on the one hand, take effective measures to crack down on trademark counterfeits and copyright infringements. On the other hand, strengthen the protection for trade secrets and patents. While some countries put pressure on China accusing its ineffective enforcement efforts in cracking down on counterfeit and piracy, some Chinese people are losing trust in the foreign and foreign invested companies. Some even think that foreign enterprises increase their patent applications in China in order to monopolize the Chinese market in the technical field. Such practice of "prejudice against prejudice" will do no good to the international collaboration of IP protection. As a matter of fact, increase of patent applications by foreign or foreign invested companies proves the increasing trust of foreign applicants in China's patent system. Chinese enterprises, foreign enterprises and academic institutions shall overcome their prejudice, provide constructive suggestions, and improve IP environment together with the government. At the same time, they shall be self-disciplined and refuse to buy or use infringing commodities, so that Chinese inventors and creators can enjoy more economic benefits, and foreign countries have more confidence in China's IP environment. We believe on the basis of mutual-trust, we can overcome ongoing new challenges and make our contributions to the establishment of a credit based harmonious society and world.

                                                                               (Translated by Hu Xiaoying)


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