The Politics of Intellectual Property Rights in China
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This page intentionally left blank Piracy and the State The Politics of Intellectual Property Rights in China China has the highest levels of copyright piracy and trademark counter- feiting in the world, even though it also provides the highest per capita volume of enforcement. In this original study of intellectual property rights (IPR) in relation to state capacity, Martin K. Dimitrov analyzes this puzzle by offering the first systematic analysis of all IPR enforcement avenues in China, across all IPR subtypes. He shows that the extremely high volume of enforcement provided for copyrights and trademarks is unfortunately of a low quality and as such serves only to perpetuate IPR violations. In the area of patents, however, he finds a low volume of high-quality enforce- ment. In light of these findings, the book develops a theory of state capacity that conceptualizes the Chinese state as simultaneously weak and strong. It also demonstrates that fully rationalized enforcement of domestic and foreign IPR is emerging unevenly and, somewhat counterintuitively, chiefly in those IPR subtypes that are least subject to domestic or foreign pressure. The book draws on extensive fieldwork in China and five other coun- tries, as well as on ten unique IPR enforcement datasets that exploit pre- viously unexplored sources, including case files of private investigation firms. Martin K. Dimitrov is Assistant Professor of Government at Dartmouth College. He has also been a postdoctoral Fellow at Harvard University, in the Fairbank Center for Chinese Studies and in the Davis Center for Rus- sian and Eurasian Studies. He received his B.A. in government and French from Franklin and Marshall College and his Ph.D. in political science from Stanford University in 2004. His publications have appeared in the Journal of Democracy, Current History, and Twenty-First Century (Ershiyi shiji). He is currently working on a book-length study of the collapse and resil- ience of communist regimes. For my mother, Zlatka Kostadinova, and in memory of my father, Kostadin Kostadinov Piracy and the State The Politics of Intellectual Property Rights in China MARTIN K. DIMITROV Dartmouth College CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi, Dubai, Tokyo Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521897310 © Martin K. Dimitrov 2009 This publication is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published in print format 2009 ISBN-13 978-0-511-60524-6 eBook (NetLibrary) ISBN-13 978-0-521-89731-0 Hardback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. Contents List of Tables page vi List of Figures and GIS Maps ix Acknowledgments xi List of Abbreviations xv I introduction 1 Intellectual Property and the State 3 Appendix: Sources and Methods 29 2 Regulating the Quality of Enforcement 33 II the Organization of the State: ipr enforcement options 3 Customs: Centralization without Rationalization 71 4 Courts: The Emergence of Rationalization 95 5 Administrative Enforcement: The Complex State 115 6 Criminal Enforcement: The Failure of Coordination 146 III the State in Action: the politics of ipr enforcement in china 7 Trademarks: Capricious Enforcement 185 8 Copyrights: Beyond Campaign-Style Enforcement 221 9 Patents: Creating Rationalized Enforcement 249 IV conclusion 10 State Capacity and IPR 271 Glossary of Selected Chinese Terms 285 Index 291 v List of Tables 1.1 Kinds of IPR Enforcement in China and Their Providers page 13 1.2 Case Selection Criteria 19 3.1 Cross-National Customs IPR Enforcement Efforts in 2004 76 3.2 IPR Cases Handled by Chinese Customs, 1996–2005 80 3.3 IPR Cases Handled by Taiwanese Customs, 2002–2005 87 3.4 IPR Cases Handled by Czech Customs, Selected Years 90 3.5 IPR Seizures by U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement, 2001–2005 93 4.1 Number of Subnational IPR Tribunals in China in 2000 (by location and type of court) 102 4.2 Determinants of IPR Court Cases per Province in China in 2004 104 4.3 First- and Second-Instance Civil IPR Cases Accepted by Chinese Courts, 1985–2005 105 4.4 Cross-National Statistics on First-Instance Civil IPR Cases Terminated in 2004 (per million people) 108 4.5 First-Instance IPR Cases Handled by Russian Arbitrazh Courts, 1997–2007 110 4.6 Civil IPR Cases Terminated in Taiwanese Courts in 2004 112 4.7 U.S. Civil IPR Cases (April 1, 2004–March 31, 2005) 114 5.1 Cross-National Administrative Enforcement Efforts in 2004 116 5.2 Administrative Enforcement in China in 2004 117 5.3 Administrative Enforcement in Taiwan in 2004 136 5.4 Administrative Enforcement in the Czech Republic, 1997–2005 142 vi Tables vii 6.1 Cross-National Police Enforcement Efforts in 2004 (per million people) 148 6.2 Administrative Case-Transfer Rates for Selected Chinese Agencies in 2004 153 6.3 Number of Criminal IPR Cases Handled by Chinese Courts, 1992–2005 160 6.4 Verdicts and Sentences Imposed for IPR Crimes in China, 2003–2004 161 6.5 Criminal Cases of Manufacturing and Marketing of Fake and Substandard Commodities and of Illegal Business Activity in China, 2004–2005 162 6.6 Criminal Sentences and Incarcerations in Six Countries in 2004 (per million people) 164 6.7 Number of Criminal Copyright Cases Investigated in Russia, 1997–2005 166 6.8 Criminal IPR Matters Handled in Taiwan, 2001–2005 170 6.9 Taiwan Criminal Enforcement Rates in 2004 172 6.10 Czech Criminal Enforcement Patterns, 2000–2005 174 6.11 Number of Persons Sentenced for Copyright, Trademark, and Patent Infringement in the Czech Republic, 1992–2004 175 6.12 French Criminal IPR Enforcement Statistics (selected years) 179 6.13 Persons Incarcerated for IPR Crimes in the United States, 2001–2005 180 6.14 Cross-National IPR Enforcement Efforts in 2004 (per million people) 181 7.1 Administrative versus Court Enforcement of Trademarks in China, 1996–2005 189 7.2 Tobacco Market Concentration Rates in Four Countries 196 7.3 Number of Agencies Participating in Raids in China 207 7.4 PSB Participation Rate in Foreign- and Domestic-Brands Raids 208 7.5 Individual Agency Participation in Raids in Russia 217 7.6 Dependence on Police Assistance during Raids in China and Russia 218 8.1 Business Software Piracy Rates in Selected Countries, 1995 and 2005 (%) 223 8.2 Copyright Administrative Enforcement, Administrative Reconsideration, and Administrative Litigation in China, 1998–2006 241 8.3 Administrative versus Court Enforcement of Copyrights in China, 1995–2005 242 viii Tables 9.1 Administrative versus Court Enforcement of Patent Infringement Disputes in China, 1996–2006 256 10.1 Cross-National IPR Enforcement Efforts in 2004 (per million people) 273 List of Figures and GIS Maps figures 4.1 The Rise of Civil Litigation in China, 1978–2005 page 98 6.1 IPR Incarceration Rate versus Overall Incarceration Rate in the Czech Republic, 1994–2004 177 7.1 Agency Participation Rates in Raids against Counterfeiters of Domestic Cigarette Brands in Guangdong Province (raids N = 99) 201 7.2 Non–Guangdong Province Agency Participation Rates in Raids against Counterfeiters of Domestic Cigarette Brands (raids N = 108) 202 7.3 Agency Participation Rates in Raids against Counterfeiters of Foreign Cigarette Brands (raids N = 100) 203 8.1 Impact of GDP on Piracy in Thirty-two Countries (2000 data) 224 8.2 Impact of Enforcement on Piracy in Thirty-two Countries 226 gis maps 2.1 FDI Dependence in 2003 (FDI as percentage of gross provincial product) 58 7.1 Domestic Trademark Cases Handled by the SAIC by Province, 2000–2004 (per million people) 191 7.2 Foreign Trademark Cases Handled by the SAIC by Province, 2000–2004 (per million people) 192 ix x Figures and GIS Maps 8.1 Foreign Copyright Cases Handled by the NCAC by Province, 2000–2005 (per million people) 237 8.2 Domestic Copyright Cases Handled by the NCAC by Province, 2000–2005 (per million people) 239 9.1 Patent Infringement Disputes Handled by the Intellectual Property Offices by Province, 1985–2004 (per million people) 258 9.2 Patent Passing Off and Counterfeiting Cases Handled by the Intellectual Property Offices by Province, 1985–2004 (per million people) 261 Acknowledgments It gives me great pleasure to thank the individuals and institutions whose gen- erous support made the writing of this book possible. At Stanford, I especially benefited from the advice of Larry Diamond, Judith Goldstein, Michael McFaul, Jean Oi, and Barry Weingast. I was fortunate to have Jean Oi as my adviser, mentor, and friend. Across the years, Jean has provided exceptional advice, good counsel, and sustained encouragement, along with a perfect sense of when I needed to move faster and when I needed to slow down. I am deeply grateful for her support. My colleagues at Dartmouth College have enriched the past four years with their conversation, advice, and friendship. I want especially to thank John Carey and Linda Fowler, who strengthened my book through their detailed comments and generous engagement with my manuscript. I also owe much to M. Anne Sa’adah, William Wohlforth, Ned Lebow, and Allan Stam, who gave me incisive suggestions for improvements. Many others have read my work.