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Product Piracy Cases Difficult to Prosecute

The case of a fugitive Chinese business executive accused of violating U.S. trademark laws underscores the difficulty of prosecuting cases involving intellectual property rights. Only two individuals have been extradited to the United States on charges of property rights violations so far. Yuan Hongwei, head of a Chinese chemical firm, Thursday, January 10th jumped bail and fled Britain on the eve of a final court hearing in London on a U.S. request to extradite him. More from VOA's Bill Rodgers

Yuan Hongwei's friends in London showed up for Thursday's court session, apparently unaware he had already fled -- forfeiting his passport and a hefty bail.

Yuan was arrested at Heathrow airport in September at the request of U.S. authorities who wanted him extradited on charges of violating U.S. trademark laws.

He was brought to court under custody, then released on bail. Yuan later did appear for several hearings but the court-imposed restrictions were clearly inadequate -- so says David Campbell, a lawyer involved in the case. He says, "The court sought to impose strict conditions on him, including reporting daily at the police station, taking his passport away, the deposit of a significant sum of money into the court. However, clearly that wasn't enough to prevent him from returning [to China]."

The case of Yuan Hongwei underscores the difficulty of prosecuting intellectual property rights violations. His firm, Hunan Magic Power Industrial Company, for years sold adhesives and other chemical products, without a license, under the name of a U.S. company.

The company, ABRO Industries, tried to stop the pirated products from being sold in various countries, including Cameroon and even in China itself. Yet the practice continued, even after Louisiana state authorities issued a warrant for Yuan's arrest in 2006 after the state seized a shipment of fake ABRO products.

Stopping legitimate goods from being pirated should be a top priority, says Brad Huther, who handles intellectual property issues at the U.S. Chamber of Commerce. "This type of criminal activity, while recognized as a priority, doesn't have the same level of resource commitment or, for that matter, the penalties associated with trafficking and illegal drugs and other types of more notorious forms of criminal activity. But we think we need to raise the bar."

Yuan is a prominent businessman in China's Hunan province, and upon his return he issued an open letter accusing the United States and ABRO of violating his human rights. He also thanked the Chinese government and public for their support.

Yet the case may have repercussions for China, which is a member of the World Trade Organization and subject to its commercial regulations.

Huther adds, "China is looked at as the principal source of manufactured, counterfeit goods -- whether it is fair or unfair, it really doesn't matter, that is the public perception. I believe this is the perfect case for the Chinese to show whether they are really serious about going after those who would steal the property rights of others."

U.S. business owners say product piracy is a continuing problem for both business and consumers. Some see the outcome of the Yuan Hongwei case as underscoring the need for stricter enforcement and prosecution measures.