China Fights Counterfeits

GUANGZHOU, China—At the China Expo Forum for Intl. Cooperation here Jan. 11, U.S. and Chinese exhibition industry leaders made a move that they hope will increase business between the two countries.

Some hailed the signing of the Joint Declaration for the Protection of Intellectual Property at Exhibitions as a significant move in China's economic progress, while others warned it could take some time to have a noticeable effect.

While not legally binding, the declaration has the support of the Chinese government, and nearly 950 Chinese exhibition organizers reportedly have signed on, agreeing to uphold its principles.

Written by the Dallas-based Intl. Assn. for Exhibition Management and the Beijing-based China Council for the Promotion of Intl. Trade, the pact declares that intellectual property rights violations harm exhibitions, a vehicle of fair trade, and should not be tolerated.

Gao Yan, vice chairwoman of CCPIT, provided CEFCO attendees with a blueprint to prevent IP theft. Steps include distributing anti-piracy rules and regulations among exhibition-industry stakeholders, developing agreements to be signed by tradeshow participants, broadening the use of IP violation complaint offices at shows, investigating complaints on-site, and punishing violators by removing counterfeited products and banishing them from future shows.

"We welcome national and international organizations to participate," said Gao Yan. "Protecting intellectual property is key to the healthy and sustainable development of this industry."

IAEM Chairman Sandy Angus called the declaration a "historic first."

"This means that only original products can be shown at exhibitions here, and if counterfeits are shown, these 900-plus organizations will make sure they're taken away," said Angus, also chairman of U.K.-based Montgomery Exhibitions.

China's inability to control counterfeiting has been a stumbling block on the country's path to becoming a major player in the global economy. Joining the World Trade Organization in 2001 came with the responsibility of conforming to certain international standards, including those concerning IP protection.

Yet China's national government has only established IP laws and enforcement agencies in the last two decades — with some coming about in recent years — said Wang Jinzhen, assistant chairman of CCPIT. That has put the country far behind others that have acknowledged copyright and patent rights for generations.

"There is great disparity in the laws between cities," Wang Jinzhen added, with the problem being more serious in areas far from urban centers like Beijing and Shanghai. "Some localities are still protectionist. We must spend time educating people in developing parts of the country."

But Wang Jinzhen believes the declaration will make a difference, particularly since it coincides with action by China's Ministry of Commerce.

By a lucky coincidence, the Ministry of Commerce enacted new regulations concerning IP piracy at exhibitions just one day before the IAEM-CCPIT declaration was endorsed.

In a speech at CEFCO, Li Ling, an inspector with the Ministry of Commerce's copyright bureau, outlined existing laws against IP theft and the government's method for enforcing them at exhibitions.

When patent and copyright owners file complaints, Li Ling said, "we will attack violations ... We can protect them through measures that allow punishment."

She noted that throughout 2004 and 2005, the national government had cracked down on counterfeiters in other industries, and it is planning a far-reaching educational campaign on the issue supported by the United Nations, the WTO and other international business groups.

So, does this mean the era of the Chinese knockoff is over? Not so fast.

"It will change, but slowly," said Gu Xuebin, managing director of the recently established China division of Australian show services provider Info Salons.

The Chinese government can accomplish whatever it truly puts its mind to, Gu Xuebin said, but there's no denying counterfeiting is big business driven by big demand.

"The tough part will be convincing the Chinese people that this is important," he noted.

Still, having the support of so many Chinese businesspeople makes the IAEM-CCPIT declaration a promising first step, said Gu Xuebin, pointing out that major exhibitions in the cities where Info Salons operates already have IP offices to field exhibitor complaints.

The key to real change lies in enforcement, many believe. And this will require close and efficient cooperation between show organizers and the Chinese government — a tall order in a country that's still making the transition (in some quarters) from Third-World status to that of a modern business culture.

But the effort is necessary to complete this transition, at least as far as some tradeshow participants are concerned.

Tom Beyer, current chairman of UFI, the Global Assn. of the Exhibition Industry, and managing director of Stockholm Intl. Fairs, said some European companies have been reluctant to exhibit at tradeshows in China, because they're afraid their products would be copied.

"The people living here say a declaration is OK, and there are several existing rules and laws, but that (those in charge) don't follow up on them," Beyer said.

UFI and the Society of Independent Show Organizers — co-organizers of CEFCO along with IAEM and CCPIT — were not involved in drafting the declaration. However, UFI and SISO leaders said that was due only to the declaration coming together about a month before the conference. They support the spirit of the document and expect to sign on in the near future.

"Will everything be fine tomorrow because of this declaration? No," said Galen Poss, current SISO chairman and president and CEO of Hanley Wood Exhibitions. "But over time, (it) will make a difference."