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Monday, 24 October 2011

Cake or death? The value of an apology in China

It is not quite on a par with Eddie Izzard’s “cake or death, but there is a chance that more defendants in criminal IP cases in China will be offered a choice of “jail or apology”. A story currently causing a stir in China’s IP community concerns a Mr X (name withheld to spare his further blushes) who was caught selling counterfeit Samsonite suitcases. Mr X’s factory was raided and 1,000 counterfeit suitcases with an estimated value of 1,000,000 RMB were found. The threshold value for bringing a criminal case, rather than a civil case, in China is 50,000 RMB (many cases potentially have a value in excess of 50,000 RMB but it can sometimes be difficult to persuade the local authorities of this, so criminal cases are relatively rare) and Mr X was therefore arrested and is now awaiting trial in a custody house (criminals are kept in police-run custody houses until trial, if they are found guilty they are then transferred to a court-run jail. Custody houses have a reputation for being less comfortable than jail). Assuming Mr X is found guilty, then he can expect a sentence of between 3 and 7 years in jail, he will be liable to Samsonite for damages, he will be fined by the court and will be injuncted from further sales of the offending suitcases.


So far, so normal. However, in advance of his trial, Mr X’s family published a half-page apology in a Guangzhou newspaper offering to compensate Samsonite for all of its loss and beg for Samsonite’s forgiveness. This is a highly unusual step in China and reveals something of the value of face. As most readers will know, or at least have heard of, ‘face’ is important in China. Face can be won or lost in many ways, and issuing a written public apology in a newspaper is one guaranteed way to lose substantial face. The loss of face is not a temporary matter. The public nature of the apology means that all Mr X’s neighbours and acquaintances will know of his misdeeds and therefore on his return from jail he will not be able to pretend that he has, for example, been on an extended holiday rather than jail. Mr X’s family may be shunned and his business may suffer (in certain circumstance ex-convicts are permitted to continue running small, non-listed businesses on their release from jail). Mr X’s apology may also be used against him in any future IP infringement cases (should he revert to his bad old ways despite his corrective stint). 


Claimants regularly demand public apologies but judges very rarely order them, on the ground that IP infringement is a corporate crime rather than a personal crime and no individual should be made to suffer such a loss of face for a corporate crime. By publishing a voluntary apology Mr X has demonstrated his sincere sorrow for the damage he has caused to Samsonite. In turn, and having received their compensation payment, Samsonite has magnanimously issued a statement to the court asking it to forgive Mr X. It is likely the judge will let him off a period of his sentence, or have him transferred to a jail (from his custody house) sooner than he might otherwise have been. Mr X and his family are not granting interviews and so his true motivation can only be guessed at but it is likely that he has strong personal motives for wanting to avoid jail at such substantial cost to himself. 


It is indicative of the importance in China of face that most defendants would rather go to jail than make an apology. However, if the judge reduces the sentence by a substantial chunk of time then it may be that the balance between loss of face and time in the clink will change, leading to defendants being more inclined to apologise in return for a shorter sentence. This may not go down well with western brand owners, who would probably rather their targets spent time in jail thinking about what they have done wrong instead of apologising and moving on.

2 comments:

Anonymous said...

by "criminals" you of course mean "people facing criminal charges" :)

Anonymous said...

Saying sorry hurts? I came across this video which reminded me of your post. If you're going to ask me though, I think saying sorry means that you're brave enough to admit your mistakes. http://youtu.be/-o-OTQXc5pY

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