Shawn Harwood*

Intellectual property infringement is the dark side of commercial competition; dishonest attempts to earn money reproducing another company’s products or concepts without permission. IP violations manifest in diverse ways: from the subtle, unauthorized use of a copyrighted song, to selling the blatant counterfeit of a trademarked product. Various forms of commercial fraud prey on every layer of society – they steal income from the originating company, deny tax revenue to governments, and frequently threaten the health and safety of consumers. Researchers claim that 80-90% of the world’s counterfeit goods originate from the People’s Republic of China, and as such, Chinese IP enforcement practices are an issue that impacts the global community (Longo, 2019). Fortunately, this critical policing environment allows for essential partnerships and policing “swim lanes” that can facilitate China’s domestic battle with IP violators.

It should be no surprise that one of the world’s largest centralized governments would conduct its law enforcement in a bureaucratic, hierarchical manner. In China, the Ministry of Public Security (MPS) is the overarching authority managing all police operations. Individual departments within MPS manage specific investigative categories: economic crimes, narcotics control, and IP enforcement are each discrete departments. By contrast, American policing relies on overlapping police authorities; multiple national-level agencies own the right to investigate the same types of crime. While the American system occasionally leads to jurisdictional competition and confusion as to which agency has primacy over certain crimes, the collaborative atmosphere intentionally allows different agencies to apply varying areas of expertise and methodology to a common problem. The American investigative system is like a unit of medieval foot soldiers overlapping small shields to create a cooperative, adaptable barrier, whereas the Chinese system is like a single soldier wielding one enormous shield. 

Lane 1

IP enforcement in China relies on three discrete swim lanes to successfully combat transnational crime organizations operating within the country. Without question, China’s police agencies are the principal swim lane; only domestic investigators and police officers can seize contraband and arrest criminals. The soldier analogy above should not suggest that Chinese investigative work is less effective or flexible in the absence of American-style investigative overlap. On the contrary, the MPS Food & Drug Crime Investigation Department (FDCID) – the national-level department responsible for all IP enforcement in China – reports significant successes in disrupting domestic IP violators. MPS press releases suggest their IP enforcement efforts yield an average of 26,000 arrests and $1.4 billion in seized counterfeit products each year (Xinhau, 2021). However, when investigative responsibilities fall on the shoulders of a single agency, partnerships outside the domestic police organization are vital to successfully fighting organized crime. FDCID investigators and their subsidiary Public Security Bureau policing offices conduct the primary investigative and operational work that yields the actual disruption and prosecution of IP violators. However, there are two other critical swim lanes that contribute to the overall success of China’s police efforts against IP crime organizations. 

Lane 2

Corporate brand protection offices are taking root all over China and frequently develop the initial IP violation casework. These offices employ in-house  investigators to develop a network of intelligence assets throughout China: identifying the locations where counterfeit products are made and stored, and the vendors selling this contraband around the world. What is the unique investigative quality that makes swim lane two invaluable to IP enforcement in China? Simply stated: Chinese police don’t conduct undercover work. As such, brand protection offices deploy private contract investigators to seek employment in the crime organizations’ factories and warehouses and pose as buyers of counterfeit goods. These contract agents develop covert evidence about the IP violators’ operation, which brand protection specialists then develop into robust investigative reports to provide Chinese police partners. While this undercover material may not be directly admissible in a Chinese prosecution, the photographs, observations, and other evidence will often tee up a formal investigation (or at least a swift police raid) that will remove fake goods from the market and place the crime organization squarely in the sights of FDCID investigators and prosecuting attorneys. 

Lane 3

Similar to private industry, foreign government agencies like U.S. Homeland Security Investigations (HSI) are deployed in China and occupy a third swim lane to assist Chinese law enforcement in disrupting and prosecuting IP violators. HSI and other U.S. partners are able to expand China’s case potential through importation records analysis and financial investigations that evaluate proprietary U.S. data with a nexus to the alleged criminals. The resulting data analysis is able to map the crime organization’s global distribution network, quantify the value of the perpetrated fraud, and identify significant foreign-based distribution nodes (criminals importing significant amounts of counterfeit goods with the intent to distribute) for additional investigation. As these findings rely on information that is not available to FDCID investigators, their contribution to the Chinese criminal case is both critical and unique. Providing this quantitative and qualitative evidence to FDCID directly contributes to China’s ability to build substantive cases against transnational crime organizations engaged in dangerous IP violations. 

In today’s globalized market, IP infringement directly threatens consumer safety and the economic prosperity of every nation. If the vast majority of counterfeit goods originate from China-based crime organizations, then China’s ability to combat this commercial trade fraud should have the interest of the entire global community. As such, law enforcement partnerships in the IP space – the critical policing swim lanes discussed in this article – are alliances that must be examined and supported for the common good. When corporate brand protection and  U.S. government  partners assist Chinese police in stopping IP violators at home, then we collectively disrupt the proliferation of dangerous contraband before criminals can export it to the United States and elsewhere. 

*Shawn Harwood is a graduate of the University of Virginia, where he majored in Economics and English Literature. At the Naval Postgraduate School, he earned a Master’s Degree in Security Studies publishing a thesis on adaptive crisis response. As a Supervisory Special Agent, Mr. Harwood works for U.S. Homeland Security Investigations and has been posted to the U.S. Consulate General as an Attaché in Guangzhou, China since 2017.

This article is the result of the author’s independent research and the views expressed do not necessarily represent the views of DHS, HSI, or the United States.


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