Everything Old is New Again: Reframing the Cultural Explanation for Intellectual Property Infringement in China

Daniel Whalen won Canada’s IP Writing Challenge last year for his article, “Everything Old is New Again: Reframing the Cultural Explanation for Intellectual Property Infringement in China.” In anticipation for the next edition of Canada’s IP Writing Challenge, we would like to share the introduction to Daniel’s award-winning submission. Please enjoy and watch out next week for our official announcement of the the 2014 IP Writing Challenge!

In the modern “knowledge”-based economy, intangible resources play an ever more important role in nations’ economic growth and prosperity.[1] Increasingly, commodities’ value lies in their unique expressive content, inventiveness or brand rather than their physical possession per se. Many governments grant rights over such “intellectual property”, entitling right-holders to block access to their works or to secure compensation in exchange for their use. Generally speaking, these rights serve as powerful incentives to produce and disseminate creative works that ultimately benefit societies as a whole.[2] Yet there exist wide, global disparities in the extent and enforcement of these rights. As intellectual property has become a greater feature of international trade, these disparities have become significant sources of tension in international economic relations.[3] For that reason, in recent times, the more intellectual property-driven, generally Western[4] countries have sought to impose their relatively strict intellectual property laws onto other countries with more industrial-based economies, often by coercive legal transplant or indirect political pressure.[5]

Despite such efforts, Western-style intellectual property law has been slow to catch on in many of these countries. The People’s Republic of China (PRC) – hereafter, simply China – is a particularly interesting example because of its immense and increasing economic significance on the global stage.[6] Granted, such law is of relatively recent introduction to China. After decades of uninterrupted isolationism, the Chinese government finally opened the country’s large markets to foreign investment in 1978.[7] In the following decades, China signed a series of ambitious, if vague, international agreements to bolster its intellectual property regime, resulting in the enactment of a wide range of related Western-style laws and regulations.[8] Upon China’s accession to the World Trade Organization (WTO) in 2001, the country was once again forced to significantly upgrade its intellectual property laws.[9] Despite these significant, rapid advancements, however, enforcement of intellectual property rights in China remains woefully inadequate. Authorities agree that the country is a global hub of rights infringement, responsible for the bulk of infringing goods seized at borders worldwide and causing billions of dollars in losses to right-holder and government revenues annually.[10]

The explanations for why the enforcement of intellectual property law is such a problem in China are legion, but generally economic, political, legal or cultural in nature. In reality, as I shall explain over the course of this essay, there is likely some truth to each. Even so, many leading contemporary thinkers seem to have settled on the notion that China will embrace such laws once the welfare gains of doing so outweigh the welfare losses, which is simply not the case at present. That is, they seem to believe that the adoption and enforcement of Western-style intellectual property law is an economic and political inevitability.[11] Admittedly, this prediction is persuasive; the economic and political pressures on China are great[12] and the histories of other, now post-industrial countries have followed a similar trajectory.[13] Curiously, however, such arguments increasingly leave cultural forces out of consideration. Whereas it was once quite fashionable to attribute China’s shoddy record of enforcement to the country’s Confucian tradition,[14] such explanations have fallen out of scholarly vogue. The role of culture, in particular Confucianism, in China is now widely questioned or downplayed.[15]

In this essay, I intend to critically examine this academic resting place. In particular, I will argue that, in at least several key respects, Western-style intellectual property law conflicts with modern Chinese culture insofar as it is informed by the intermingling of its ancient Confucian tradition and past 64 years of unique socialist governance. To provide the necessary backdrop to this analysis, I begin in Part I by explaining what I consider to be three core determinants of a society’s acceptance of such law: resultant benefits outweighing the costs, in general terms; an inclination towards individualism; and the embrace of legalism and the rule of law. The rest of the essay is dedicated to the final two, culturally based premises. In Part II, I contrast the requirement of individualism with collectivism and explain how the latter’s unique forms of expression in China are inimical to Western-style intellectual property law. In Part III, I do the same in consideration of the traditional and contemporary Chinese approach towards legalism and the rule of law. I wish to clarify at the outset that my analyses are not intended to be normative but seek to demonstrate how law is a product of context, flowing from countries’ unique cultures and traditions.[16] I also wish to make clear that, although this subject requires some amount of generalization, I do not intend to paint all of China with one brush.[17]

Daniel Whalen is a recent graduate of Osgoode Hall Law School and is currently articling at Smart & Biggar / Fetherstonhaugh in Ottawa. Featured is the introduction to the article with which Daniel won the 2013 IP Writing Challenge. Click here to read the rest of Daniel’s article.

[1] See generally Michael A Peters, Simon Marginson & Peter Murphy, Creativity and the Global Knowledge Economy (New York: Peter Lang Publishing, 2009) (tracing the development of this form of economy).

[2] See generally Daniel Whalen, “On Social Welfare and the Incentive to Share”, 25 IPJ [forthcoming in 2013], online: IP Osgoode <http://www.iposgoode.ca> [Whalen] (arguing that intellectual property rights, in both design and practice, are focused on social welfare by encouraging the dissemination and consequent public engagement of creative works, primarily by incentivizing the creation and broad distribution of creative works, which is achieved by granting to their owners rights that facilitate commercial exploitation).

[3] See generally Robert C Bird & Subhash C Jain, “The Continuing Challenge of Global Intellectual Property Rights” in Robert C Bird & Subhash C Jain, eds, The Global Challenge of Intellectual Property Rights (Cheltenham: Edward Elgar Publishing, 2008) 3 (broadly detailing the trade-related concerns of intellectual property protection); Michael J Trebilcock & Robert Howse, The Regulation of International Trade, 3d ed (New York: Routledge, 2005) [Trebilcock & Howse] ch 13 (detailing the trade-related concerns of intellectual property protection).

[4] This group includes, inter alia, the U.S., members of the E.U., Japan, South Korea and Canada. Although the term “Western” denotes these countries’ geography, it is more meaningfully understood, in the age of globalization, as describing their dominant cultural, economic, political and legal influences. I acknowledge the term’s imprecision in that regard, but have chosen to use it for lack of a more descriptive shorthand. The broad usefulness of this term will become apparent in the discussions of “Western” history and influence in Parts II and III.

[5] The U.S. has led this charge, traditionally through severe, unilateral sanctions – or threats thereof – aimed at persuading countries to adopt certain laws or cease trade practices deemed threatening to U.S. economic interests: see generally John T Masterson, ed, International Trademarks and Copyright: Enforcement and Management (Chicago: American Bar Association, 2004) (describing the powers and processes of the U.S. Trade Representative (USTR) at 18-22). China has been a frequent target of these powers since their enactment in the 1970’s: see generally Peter K Yu, “From Pirates to Partners: Protecting Intellectual Property in China in the Twenty-First Century” (2001) 50 Am U L Rev 131 [Yu, “Pirates”] (describing U.S. trade actions against China at 136-154).

[6] China has boasted the world’s fastest growing economy since 1980, its GDP growth averaging about 10% per year: see “World Development Indicators”, online: World Bank <http://www.worldbank.org>. The country is widely acknowledged as an emerging economic superpower, poised to overthrow the present hegemony of the U.S. and the E.U. in the coming decades: see e.g., World Bank, China 2030: Building a Modern, Harmonious, and Creative Society (Report No 76299) (Washington, DC: World Bank, 2013), online: World Bank <http://www.worldbank.org> (“[e]ven if growth moderates, China is likely to become a high-income economy and the world’s largest economy before 2030” at xxi); “World Economic Outlook (October 2012)”, online: International Monetary Fund <http://www.imf.org> (projecting China’s economy to become the world’s largest by 2016).

[7] This process began following the death of leader Mao Zedong, “founding father” of the PRC, and the rise of his successor, Deng Xiaoping. See Parts II and III, below, for more on this topic.

[8] The first such agreement – effectively introducing Western-style intellectual property to China – was struck with the U.S. in 1979, compelling China to join the World Intellectual Property Organization and thereby accede to and develop domestic legislation based upon the various international, multilateral treaty-based standards for copyright, trade-mark and patent law at the time. China would sign several more such agreements with the U.S. in the following decades. For further background on the history and details of these agreements, see generally Yu, “Pirates”, supra note 5.

[9] Upon joining the WTO, China was forced to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which specifies minimum standards of protection required of all WTO Members and is presently the most comprehensive, far-reaching multilateral agreement of its kind: 15 April 1994, 1869 UNTS 299, 33 ILM 1197, online: WTO <http://www.wto.org >. For further background on the history of TRIPS with China, see generally Peter K Yu, “From Pirates to Partners (Episode Two): Protecting Intellectual Property in Post-WTO China” (2005) 55 American University law Review 901 at 906-923.

[10] See e.g., US, USTR, 2012 Special 301 Report (Washington, DC: US Government Printing Office, 2012), online: USTR <http://www.ustr.gov> at 26-35. See also Andrea Wechsler, “Spotlight on China: Piracy, Enforcement, and the Balance Dilemma in Intellectual Property Law” in Annette Kur, ed, Intellectual Property Rights in a Fair World Trade System: Proposals for Reform of TRIPS (Cheltenham: Edward Elgar Publishing, 2011) 61 (discussing why China is a “paradise for [intellectual property] pirates” at 91). For a more general background on the varied costs of infringement, see generally Michael Blakeney, Intellectual Property Enforcement: a Commentary on the Anti-Counterfeiting Agreement (ACTA) (Cheltenham: Edward Elgar Publishing, 2012) at 7-22.

[11] One of the most ardent supporters of this view is Prof. Peter Yu, who, incidentally, is also one of the foremost Western-based experts on Chinese intellectual property law: see e.g., Peter K Yu, “Intellectual Property, Economic Development, and the China Puzzle” in Daniel J Gervais, Intellectual Property, Trade and Development: Strategies to Optimize Economic Development in a TRIPS Plus Era (Oxford: Oxford University Press, 2007) 173 [Yu, “China Puzzle”] (“[a]t some point in the near future, the development of the Chinese economy will reach a crossover point at which the country will gradually abandon its infamous pirate past to become a champion of intellectual property protection” at 202). See also Frederick M Abbott, “Toward a New Era of Objective Assessment in the Field of TRIPS and Variable Geometry for the Preservation of Multilateralism” (2005) 8 J Int’l Econ L 77 (“[i]n a decade or so, China will likely reach a cross-over point when it will decide that interests in collecting technology rent outweigh its interests in technology appropriation, and it will shift from an appropriation regime to a protection regime” at 81-82).

[12] See generally Yu, “China Puzzle”, supra note 11, (discussion of external and internal pressures at 185-202).

[13] It is a case of historical irony that, not too long ago, many of the presently post-industrial countries pushing for stronger global protection of intellectual property rights – including the U.S., Japan and South Korea – unabashedly permitted infringement of the same in order to build up their national economies, much as China does now: see generally William Kingston, “An Agenda for Radical Intellectual Property Reform” in Keith E Maskus & Jerome H Reichman, eds, International Public Goods and Transfer of Technology Under a Globalized Intellectual Property Regime (Cambridge, UK: Cambridge University Press, 2005) 653 (“[f]rom the start of the industrial revolution, every country that became economically great began by copying: the Germans copied the British; the Americans copied the British and the Germans; and the Japanese copied everybody” at 658); Assafa Endeshaw, Intellectual Property Policy for Non-Industrial Countries (np: Dartmouth Publishing, 1996) (“[h]istorically, each of the advanced countries today was determined to industrialize first before… ‘opening up’ to forces and interests that they might previously have dreaded and before calling for a stronger international [intellectual property] system” at 120). Accordingly, many convincingly argue that the infringement of intellectual property rights is primarily an economic, rather than cultural, issue. Prof. Keith Maskus has empirically illustrated this phenomenon, demonstrating how, even across seemingly unrelated countries, intellectual property protection generally rises with per capita income: see Keith E Maskus, Intellectual Property Rights in the Global Economy (Washington, DC: Institute for International Economics, 2000), ch 4.

[14] Perhaps the most influential modern work advocating this position is Prof. William Alford’s book To Steal a Book Is an Elegant Offence (Stanford, CA: Stanford University Press, 1995). In it, Prof. Alford contends that there is no counterpart to the Western conception of intellectual property; rather, the idea of copying as “infringement” is a foreign concept. See also Patrick H Hu, “‘Mickey Mouse’ in China: Legal and Cultural Implications in Protecting US Copyrights” (1996) 14 BU Int’l LJ 81 (explaining how intellectual property rights “contradict[] traditional Chinese moral standards” at 104); Peter K Yu, “Piracy, Prejudice, and Perspective: An Attempt to Use Shakespeare to Reconfigure the US-China Intellectual Property Debate” (2001) 19 BU Int’l LJ 1 (explaining how, “[f]or centuries, the Chinese have regarded copying and imitation as an important living process” at 16-21).

[15] Prof. Alford’s thesis and the works it has influenced have proven highly controversial: see e.g., Shi Wei, “Cultural Perplexity in Intellectual Property: Is Stealing a Book an Elegant Offense?” (2006) 32 NC J Int’l L & Com Reg 1 (“‘To Steal a Book is an Elegant Offense’… is a concept unknown to Confucianism” at 11); Peter K Yu, “The Confucian Challenge to Intellectual Property Reforms” (2012) 4 WIPO J 1 [Yu, “Confucian Challenge”] (“one should be very cautious in using Confucianism as a cultural explanation for the massive piracy and counterfeiting problems in Asia” at 9). I will try to avoid such controversies in this essay by suggesting slightly more nuanced positions supported by China’s recent development rather than its Confucian history alone or supposedly cultural attitude towards copying.

[16] At least this view seems to be beyond dispute among academics: see e.g., Edwin K Mansfield, Intellectual Property Protection, Foreign Direct Investment and Technology Transfer (Washington, DC: World Bank, 1994) (“one should recognize that a country‘s system of intellectual property protection is inextricably bound up with its entire legal and social system and its attitudes toward private property; it involves much more than the passage of a patent or copyright law” at 20); Yu, “Confucian Challenge”, supra note 15 (“[t]he protection and enforcement of intellectual property rights concerns not only law and policy, but also a country’s political, social, economic and cultural systems” at 1).

[17] See “Regionalism and the Rule of Law” in Part III, below, for further discussion of differences within China.