Knockoff men knocked off in an ever-changing China
JI WANCHANG strolled through a Beijing luxury mall one recent morning with an eye out for luxury coats. But at one store, a clerk told him a fur-collared Moncler and other coats were “sample sizes” and not for sale.
A second clerk, selling a wolf furlined Yves Salomon, said the coat was reserved.
Ji sighed. In both cases, the fur wouldn’t match their labels, he suspected – and the clerks knew selling a fake to Ji, who is well known on sight in many of China’s shops, meant big trouble.
“Ma’am, I don’t want to make things difficult for you,” he told a sales clerk, who nodded and bowed. “I’ve found problems with your clothes, so please correct them.”
Ji is what is known in China as a professional counterfeit hunter. Part Ralph Nader, part bounty hunter, Ji rummages for fake or substandard goods in shops. Then, using China’s consumer protection laws, he collects tens of thousands of dollars from the companies that make or sell them. The laws are part of China’s effort to weed out the fake clothes, electronics, food and furniture that swamp its stores and frustrate companies and consumers alike.
But Ji’s livelihood is now under threat. Some government officials say Ji and the unknown number of others like him abuse a law that was meant merely to empower consumers to report fakes.
If proposed new government rules get accepted, people like Ji will no longer be able to go pro.
Last year, China’s courts handled about 120,000 intellectual property cases, up 9 percent from 2014, according to official media.
One anti-fake effort was intended to empower the consumer. In 2009, the government promised consumers that if they found a product that flouted food safety laws, they could win 10 times the value of that prod- uct in compensation. In 2013, China bolstered an earlier consumer protection law by increasing payouts to buyers of other kinds of fake goods, while a decision from China’s supreme court was widely seen as supporting counterfeit hunters.
Ji and his peers have used these laws to their advantage, buying knockoffs in bulk – the more they turn in, the more they are paid – and filling their storerooms with counterfeit products. Ji’s group, the Jinan Old Ji Anti-Counterfeit Rights Defense Work Studio, has a network of about 20 informers who report suspected fake products. He says his biggest success to date is collecting about $178,000 in compensation from a company that tried to pass off its blankets as pure cashmere.
Among overseas companies, people like Ji have fans.
“A lot of my clients would, in some circumstances, support the activities of these kinds of consumer warriors because ultimately they may be uncovering information that helps us do our job,” said Scott Palmer, an intellectual property lawyer at Sheppard, Mullin, Richter & Hampton, which represents American corporations in China.
But government officials complain that the program is increasingly expensive and increasingly abused. Government rules released in August and under consideration said that payouts for fakes would not be available to those who sought them “for commercial purposes”.
Ji, defending his work, says he has to recoup his legal fees, which he incurs when the companies he accuses of selling fakes fight back. He says he makes about $148,000 a year but his take-home pay is only about $30,000 to $44,000 after expenses.
“When they encounter a fake product, more than 80 percent of Chinese people will just suck it up and not take it very seriously, as long as their lives are not in danger,” Ji said. “If there are more professional counterfeit warriors, the quality of goods will improve at once.”
Still, Ji views the work as necessary. Every month, he says, he receives more than a hundred phone calls from people curious about how to get compensation from a fake product.
On a recent afternoon, a man from the eastern city of Tai’an called Ji, who was en route to check out a shopping mall in Beijing. How, the caller asked, could he emulate Ji?
Ji told the aspiring fraud-buster that he could not “just casually enter any shop and buy eight or 10 pieces and demand compensation.” His profession was built on navigating tricky relationships with local courthouses and police, Ji said, adding that recently some thugs from Tai’an wanted “my life, my arms and my legs”.
“Not everyone can be a counterfeit hunter. This industry isn’t a gift that falls down from heaven,” Ji told the caller. “You haven’t seen the hardships and suffering we’ve gone through. You’ve only seen our glorious side.”