Campaign appears to have resulted in improved coordination among various IPR enforcement authorities in China at the central, provincial, and local levels.
The Special Campaign has produced regulatory and judicial changes, as well as strengthened enforcement activities. In late November 2010, the State Council issued the "Notice on Further Strengthening the Management of the Software Assets of Central Administrative Entities and Public Institutions," obligating, for the first time in China, central government budget allocations for legitimate software purchases. It further required that government asset management include software, and that only legitimate software be used in central government networks. Furthermore, on January 11, 2011, the Supreme People's Court, the Supreme People's Procuratorate, and the Ministry of Public Security jointly issued a document entitled, "Opinions on Handling Several Issues in IP Criminal Cases," which appears to modify the proof requirements in copyright infringement cases involving multiple copies of works.
Anecdotally, individual companies and industry trade associations report some increases in investigative and enforcement activity, particularly in the online environment, where China's media have reported more than 200 website closures and suspensions of online business licenses. Trade associations state that their members are seeing increased enforcement activity in luxury- and branded-goods sectors. Over the past few months, local and provincial branches of China's Administration for Industry and Commerce (AIC) claim to have conducted 1,372 raids involving more than 700,000 law enforcement personnel, logging 5,000 trademark violations in 16,000 cases valued at over $15 million. Pharmaceutical manufacturers report positive results from the Special Campaign, which has focused in part on public health and safety. According to rights holders in this sector, law enforcement has been reaching out to individual companies, investigating leads early on, and bringing criminal prosecutions against infringers. Rights holders detect more diligence and promptness on the part of Chinese authorities in developing criminal counterfeit pharmaceutical cases. Anecdotal accounts also suggest that Chinese police may be pursuing production networks and distribution channels, and seizing counterfeit products as well as manufacturing equipment.
However, some companies and trade associations report mixed results and remain skeptical about whether current activity levels will be maintained once the Special Campaign ends. As an example, the software industry reports no discernable increase in legitimate software sales to date, and no significant changes in software-related enforcement activity. This is despite China's assertion in its Special Campaign plans that software legalization is a high priority. For this sector, it appears that this latest campaign is not yet having a positive effect. One company noted that most of the Chinese government's efforts to purchase legal software have been focused on low-end and pirated domestic software.
Online Piracy
Piracy over the Internet in China continues to be a source of concern and injury to the copyright industries and the United States. It is estimated that there are 457 million Internet users in China, as compared with 223 million in the United States; when coupled with reports that 99% of all music downloads in China are illegal, the concerns of industry are understandable. However, there appear to be early signs of progress in this area. As a result of the Special Campaign, several websites and portals, including VeryCD, qishi.com and 5474.com have been shut down, and three of the operators of these last two sites were arrested and sentenced to prison terms that ranged from three to five years,
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