Coercion Will Not Protect Trademark Owners in China, but an Understanding of China's Culture Will: A Lesson the United States Has to Learn

ABSTRACT INTRODUCTION I. CHINA RESPONDS TO FOREIGN PRESSURE AND OVERHAULS ITS NATIONAL LEGAL SYSTEM TO PROTECT TRADEMARK RIGHTS A. Trademark Rights Protection in China: Awareness of the Risk B. Trademark Law Enforcement in China: Myth or Reality? II. WHEN CHINESE CULTURE IS AN IMPEDIMENT TO TRADEMARK ENFORCEMENT III. ANALYSIS A. From Coercion to Understanding: The United States Should Adopt the China-E.U. Model B. China- EU Relationship: A Model Approach CONCLUSION INTRODUCTION Business entities and individuals have a legitimate interest in protecting their trademarks abroad. (2) However, when it comes to protecting their trademark(s) in China, the international community has voiced some deep concern about China's dedication and ability to provide protection. (3) Indeed, China is viewed as the single largest producer of pirated and counterfeit goods in the world. (4) This harsh critique of China's inability to protect trademark and intellectual property rights ("IPR") in general is widely spread in the West. (5) While China is undertaking a historic and unprecedented advancement in the legal protection of trademarks, ongoing debates have raged on between the West and China. (6) The West, led by the United States, continues to assert that China has done poorly in protecting foreign trademarks. (7) Trademark piracy in China is still rampant and continues to cost foreign trademark owners billions of dollars in lost sales and jobs. (8) Consequently, the United States' constant frustration with China's failure to protect and enforce trademark and IPR in general in China has led the U.S. Trade Representative ("USTR") to place China on the Priority Foreign Country Watch List for epidemic infringements of IPR more than once. (9) Each year on the last day of April, the USTR's Office issues the Special 301 Report that places countries on a priority foreign country list. (10) Many American businesses that recommended that China be put on the priority watch list in the next Special 301 Report on April, 30 2010, (11) have been heard as China remains on the priority watch list in 2010. (12) As of today, China continues to be the most notorious and singled-out country for piracy and counterfeiting practices. (13) Conversely, China justifiably claims that it has made substantial strides in establishing a modern trademark system within a short period of time. Such action demonstrates China's commitment to fight intellectual property piracy and counterfeiting within its borders. To further demonstrate its commitment, China actively engaged on the international platform, signed several international treaties and conventions, and acceded to the World Trade Organization ("WTO") in 2001. (14) Following its accession to the WTO, China has complied with the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). (15) Thus, China leaves no doubt as to its commitment to becoming a competitive, "innovation-oriented" country that should command international respect regarding IPR protection. (16) Yet, China's efforts in adhering to its domestic and international duties have not substantially reduced the problem of IPR piracy and trademark infringement in China. (17) At the national level, despite adequately implemented resources, including anti-piracy campaigns and an increasing number of IPR cases brought before Chinese courts, overall levels of piracy, counterfeiting, and trademark infringement remained unacceptably high in 2007. (18) Similarly, at the international level, although China's legislation has been in accordance with international standards, enforcement under the TRIPs Agreement remains mediocre. (19) TRIPS is viewed as the "benchmark" for gauging the adequacy of China's trademark laws because it sets the standard for international IPR protection. (20) According to the 2008 USTR Report, inadequate IPR enforcement is a key factor contributing to these shortcomings. …