Iona's Guest Post: A Lawyer's Guide to Shanghai

Iona came to visit Shanghai! Here are her (professional) thoughts...

I'm back in snowy Montreal after a week-long adventure: first giving intellectual property training in Manila and then visiting Michelle and Sam in Shanghai. My visit to Shanghai was my first to China. My overwhelming first impression of Shanghai (in addition to agreeing with LJ that everyone seems constantly be hanging laundry) was that the shops seemed to outnumber the people. Well, not quite: Shanghai has a population of 23 million so it stands to reason that there would be a lot of shops, but I was still in awe. Corner shops, food stalls, designer stores, independent clothes shops, pet shops, high street fashion retailers, luggage shops, tourist shops… you name it, Shanghai sells it. If you did need to urgently buy a pet budgie, a pair of longjohns and a bowl of rice (and who wouldn't?) I am certain that you could easily do so in any part of Shanghai. Of course one of the things that China is notorious for selling is counterfeit goods, which for most of us girls means fake handbags. 

Before going to China I was asked by someone who shall not be named to purchase a fake handbag. Of course I threw my hands in the air: "I can't do THAT!" Why not? Buying a fake handbag in Shanghai would have been so easy. There are a number of "fake markets" which I didn't feel the need to visit; I did however go to Yu Yuan Market which is a confused mash up of any city's China town with Disneyland. A China town within a Chinese town if you will. It is a labyrinth of shops and eateries and yet more shops, stuffed full of tourists and tourist tat. Men accost Westerners with the words "bag or watch?" and a scrap of paper with a picture of a designer bag and watch to reinforce the point. I did not follow any of these men back to their bag and watch lairs, but it was obvious that that was the place to haggle over a fake Mulberry.

We know it's wrong to buy fakes, but why? Under English law (and Chinese law is likely to be very similar):

·       Handbags (indeed any garments) do not generally attract copyright protection (but DVDs do).

·       However handbags do generally bear trade marks: Louis Vuitton is the obvious example as his bags are plastered with "LV", but all designer handbags have something that shows you who has made them. The reason that people buy knock-offs is because they want everyone to think that they have a designer bag, so the knock-off must bear the trade mark too. Making or selling a handbag with a designer's logo on it infringes that designer's trade mark.

·       That said, buying a handbag not made by Chanel but with Chanel's logo on it does not infringe Chanel's trade mark. It is not infringement of intellectual property to buy a knock-off. Loop hole?

·       It is illegal to import infringing goods into the UK. Loop hole closed (sort of).

So actually, I'm fine to buy the fake handbag (I still wouldn't, I'm too much of a goodie two-shoes), I just can't take it home with me.

The real penalties are, supposedly, for those that supply the fakes. According to a guide published by the UK Intellectual Property Office, under Chinese law you can get up to 7 years in prison for manufacturing or selling infringing goods, up to 15 years for operating an illegal business, and up life (or the death sentence!) for production and marketing of fake or substandard goods.

With those kind of deterrents, why is it is still so easy to buy fakes in China? 

One reason is that, as Michelle and Sam have highlighted in this blog, China is a frustratingly bureaucratic country. Hoops must be jumped through and documents must be rubber stamped in order to achieve anything. European brand owners often find it too difficult to a) register their rights and b) enforce those rights in China, so just don't bother.

This is linked to the fact that although China has recently stepped up its enforcement initiatives, insufficient resources are allocated to the task. To give some perspective, in 2007 there were fewer than 1,000 copyright officials in the whole of China, a country which then had 1.3 billion people. Handbag sellers often have a legitimate shop front with a back door through to the fake goodies, which they can close if the authorities get close. Anyway, with infringing software and pharmaceuticals to deal with, the Chinese authorities have bigger fish to fry than the fake handbag merchants.

As I have said it is not illegal to buy a fake handbag, though it is illegal to bring it into the UK. With that in mind I would be interested in hearing your thoughts. In today's society the culture of "free" is pervasive: would you choose to make the most of what's on offer in China by buying cheap and fake? Or, along with fake tan and fake eyelashes, do you think that fake handbags are just a bit cheap and nasty?

More on IP: I regularly contribute to the 1709 blog on all things copyright related; my most recent blog post is (fittingly) on Gangnam Style and the culture of free.