By Stan Abrams
I confess. I've sold out. I have slid all the way down to being a complete cynic. My idealism has fled. This confession is a long time in coming. I have recently noticed that the subject of intellectual property (IP) enforcement in China, and what will ultimately fix the problem, has come up a lot.

Perhaps it was the recent IP seminar hosted by the US Embassy in Beijing. Maybe it was all the clients I've spoken to this past month with IP problems that asked about "the big picture" or the students that have come in the office to chat for various reasons. Anyway, all this cogitating has forced me to examine my stance on this issue.

My long-standing position on enforcement of intellectual property rights has been based on the idealistic notion that if people understood the vital role that IP plays in commerce, not to mention the moral aspect, that demand would dry up. Yeah, that's what I used to believe, no kidding. I figured that China just had economic growing pains and that a big public education campaign would take care of everything. (I can hear the cynics laughing as I type.)

So what changed? Two things, one that I have ignored or perhaps misinterpreted for the past five plus years and another that is fairly recent.

First, from my personal observations, EVERY foreigner who lives in China purchases counterfeit products. The idea that individuals who understand commerce would not purchase fake goods is not supported all that well by the foreign community here. Over the years, I have attributed this to the general attitude of lawlessness that pervades the souls of many expatriates which, simply put, is that "I'm not at home right now, I'm not a citizen here, and I'm somehow beyond the pale of authority."

This attitude of lawlessness may go some way towards explaining expatriates' actions over here. However, it does not explain why EVERY foreigner who visits China also buys counterfeit products if given the chance. These people are only over here for a couple of days, a week at the most, and consistently snatch up fake Nikes, movies on DVDs, knock-off Rolexes, you name it. What are these people thinking? Even U.S. government employees, such as former U.S. Trade Representative Charlene Barshefsky, have been caught at the Silk Market in Beijing buying fake products.

Does this make the U.S. or other foreign countries hypocrites as they castigate the Chinese government for failing to live up to the promises made when they acceded to the World Trade Organization? Perhaps not. No country can control all of its wayward citizens. However, this does tell us something about the appeal of counterfeit merchandise.

This brings me to my second point, which involves file-sharing of copyrighted works and other Internet shenanigans. I wasn't even aware of this phenomenon until a couple years ago, but it is now rampant in many parts of the world, including North America and Europe. This practice has so worried the entertainment industry that the RIAA (Recording Industry Association of America) has started suing individual file sharers, including the well-publicized case of a 12 year-old American girl who was sharing MP3s; her mother settled for $2,000.

So even in the U.S., with all the knowledge of IP rights and the cultural baggage of morality, Westerners are still violating IP rights. What's the answer? Call me slow, call me stupid, but only now have I realized that the reason why people buy fake stuff and download copyrighted works without paying for them is . . . that . . . they . . . can!

Simple conclusion. Yes, the scales have fallen from my eyes. I wasn't on the road to Damascus, but I had the revelation anyway.

OK, let's stop the histrionics, although as Billy Joel tells us, "Melodrama's so much fun; In black and white for everyone to see." I have debated this with many people over the years, within the context of policymaking. The question is what amount of resources should be spent on education and how much on enforcement? My idealistic view led me to push for education, scoffing at the idea that enforcement of such a widespread problem in such a large country was possible.

My new, pragmatic position is therefore that education ain't gonna cut it. We are all human, which means that we are, to varying degrees, fundamentally selfish. If we can get away with downloading the new Matrix flick for free, we will do so unless someone stops us.

While I vociferously oppose the RIAA's litigation strategy, particularly when 12 year-old girls are involved, I now understand it. Scaring folks might be the only way to make headway on this issue.

What does this mean for China? Well, effective enforcement requires resources and political will: more cops, more raids, tougher judges. While more resources certainly could be made available, the political will is another matter. Perhaps the most difficult issue facing the Chinese government is unemployment. As long as the counterfeiting industry employs a significant number of people, it will be difficult for the Chinese government to get the problem under control.

I think that I've just argued myself to the conclusion that IP infringement will be a problem for a long time to come. Before we all start getting weepy, though, let's remember that infringement covers a wide range of goods, and enforcement is not either "on" or "off". In my five years in China, I have seen enforcement increase tremendously. For companies with patents or trademarks that can identify discrete infringers, enforcement is actually pretty good. We are on the right track, but the track is long and there are many obstacles in front of us. Better to spend time and money wisely than wasting it on idealistic education campaigns.