Countering Corruption in Intellectual Property Cases

Regaining rights to stolen intellectual property can be a perpetual nightmare for companies operating in China and other countries with similar governmental and law enforcement structures. The common raids-based approach to recovery can fail because of corruption and double-dealing. However, many companies are now using the more effective intelligence-based approach, which requires the skills of a CFE.

Mr. Xu, a consultant with an intellectual property (IP) protection firm in China, passed a crumpled sheet of paper across the desk to Mr. Smith, the security manger for a large, international cosmetics company manufacturing in China. The company was beginning to sell its products in the country for the first time. The words were in Chinese – a language Smith couldn’t read – on a barely legible carbon copy. However, Smith did notice the red stamp in the bottom right corner – the infamous “chop” without which nothing is considered official in China. The stamp had been placed on the paper by the local police bureau that had conducted a raid, with Xu’s help, on a factory that had been producing knock-off items infringing on IP belonging to Smith’s employer. Smith had employed Xu’s services to identify the counterfeiters and orchestrate the raid in conjunction with the local police.