A landmark court
decision forcing the New Oriental Education Group to pay 10 million
yuan (US$1.21 million) in compensation for copyright and trademark
infringements?to two United States plaintiffs has caused
controversy and debate in China.
"The amount awarded to
the two US firms is relatively high for copyright infringement
cases in China, which are rarely won by foreign companies and if
won, are awarded nominal compensation," the Agence France-Presse
(AFP) said.
But, "the fine is not
high at all," said Zhang Chu, an expert Intellectual Property
Rights (IPR) law, in a telephone interview with Xinhua.
"New Oriental has earned
much more than the amount it was ordered to pay."
"Many local enterprises
lack of awareness of IPR and have ignored issues on patent and
copyright for years." said Zhang.
In January 2001, the
US-based Educational Testing Service (ETS) and the Graduate
Management Admission Council (GMAC) accused New Oriental, China's
biggest private English language training institute, of
infringement of copyright and trademark, asking for 30 million yuan
(about US$3.63 million) compensation.
New Oriental denied the
validity of "copyright of test questions" in that all test
questions in its books, which have been used in past tests, have
been used by students all over the world, and were only used for
teaching and training.
The judge told the
Beijing Morning Post, "Although there is no clear
regulation prescribing 'copyright of test questions' in Chinese
law, there are some related parts in Law On Copyright of the
People's Republic of China."
But professor Zhang said
copyright law in China is complete.
"China should enforce
penal punishment to make its law on IPR valid," said US law experts
at a US-China conference on Internet law in July.
"The case also shows how
China is attempting to use the courts to enforce copyright law,
both to give teeth to its claims of rule of law and to dull foreign
businesses' complaints of rampant fakery," the Associated Press
(AP) reported.
New Oriental was ordered
to hand over all illegal copies of ETS and GMAC materials and
publish an apology.
Since its establishment
in 1993, New Oriental has gained huge profits from using and
selling books, involving test questions for TOEFL, GRE and GMAT,
and their trademarks, which have been registered by ETS and GMAC
respectively.
"We are sincerely
repentant and apologize for our past mistakes," New Oriental
announced after the sentence.
"China has been under
increasing pressure by other countries to crack down on piracy
after it joined the World Trade Organization in 2001," reported the
AFP.
In 1997, local industry
and commerce administration officials confiscated the illegal
copies of ETS and GMAC test questions produced by New Oriental. But
it continued to do business, using the illegal copies
later.
"Companies should do
business over the long run," Zhang said.
"You may make money in
the short term, but are doomed to pay if you use the copyright of
patents registered by others."
This is a warning and a
tough question for Chinese companies that are still adopting
mainstream technology without their own patents.
New Oriental Education
Group has established branches in 12 major cities of China and in
Toronto, Canada, gaining half of the Chinese training market for
students going abroad, and training over 400,000 students
annually.
The education group has
registered trademarks of "New Oriental" and the corresponding
Chinese version in China.
On Sept. 1 this year,
New Oriental announced officially its trademarks and brands by law
in its website, www.neworiental.org.
Xu Xiaoping, a spokesman
for New Oriental, said the verdict was unfair and the company would
appeal to a higher court.
(China Daily October 2,
2003)