Fake pens write their own ticket
The first time the pair of Shanghai private detectives came to this remote village known as China’s pen capital, they ran into big trouble. They were on a mission, along with provincial police, to raid a factory and seize thousands of counterfeit Parker pens.
They made it inside the building and found the bogus goods. But then a mob of locals arrived, hemming them inside and barricading the only street leading out of town. The detectives escaped with just a few boxes of evidence -- and only after local police intervened.
That was four years ago. Since then, China has adopted more-stringent anti-counterfeiting laws, and knockoff markets in large coastal cities such as Shanghai and Shenzhen have been shut down or pushed underground.
But when the same detective firm sent another team to Wengang last summer, it was a similar story. Locals tailed them, and by the time the out-of-towners reached a plant that was making knockoff pens, the factory had cleaned out its supplies. Investigators came away empty-handed.
“We don’t have the ability to change the local situation,” said the 42-year-old head of the Shanghai detective agency, who asked not to be identified because of the nature of his work.
His frustrations underscore the intractable state of affairs in China’s long-running battle against knockoffs. In counterfeit production hubs -- auto parts in Taizhou, cosmetics in Chaozhou, pens in Wengang -- life goes on little changed.
In a survey this year by the Quality Brands Protection Committee, an industry group made up of 164 multinational companies operating in China, 70% said the situation was worse than or the same as before.
Chinese scholars and government officials contend that there’s been a lot more progress in protecting intellectual property rights than that survey would suggest. Nationwide, Chinese courts took on nearly 20,000 civil and criminal cases related to such protection last year, up from about 13,000 two years earlier.
“This shows that IPR awareness in China is getting much stronger,” said Tao Xinliang, dean of Shanghai University’s Intellectual Property School. Yet lack of enforcement, and even collusion, on the part of local authorities remains a major barrier. And few places may be as tough to crack as Wengang.
The town, in southern China’s Jiangxi province, has been making writing implements for centuries. Famous calligraphers and poets such as the Tang Dynasty’s Wang Bo looked to this place for their maobi, or brush pen.
In more recent years, villagers not only cornered the nation’s market in maobi but also added metal pens to their repertoire. Today more than 2,100 businesses in Wengang (population 70,000) make brush pens, and 1,000 others produce ballpoint, fountain, gel-ink and other modern pens, says the China Writing Instrument Assn. In 2005, the town made and sold roughly 7.5 billion brush and metal pens -- enough to supply one to every person on the planet, and then some.
Zhou Guosheng, Wengang’s Communist Party secretary in charge of press affairs, says the growing pen trade has boosted the town’s annual per capita income to $800, about half the nationwide average but better than that of other villages in this relatively poor and hilly province. Zhou insists that Wengang isn’t making counterfeit goods. “Most factories are producing their own brands,” he said.
It’s true that many more manufacturers in Wengang, like those in other industries throughout China, are trying to build up their own labels.
“We all know counterfeiting is not the right road to long-term success,” said Luo Qinghua, president of Paiya Stationery Co., which makes Diyuewen fountain pens. Luo, whose family has been making brush pens for generations here, said all of his products were for export. Though he wouldn’t allow a visitor to walk through his factory, Luo said his 100 employees weren’t pirating famous brands.
“It’s not worth the risk,” he said.
But ask other manufacturers, retailers and even passersby on the street whether they make or sell fake Parker or Montblanc pens, and often their reply is, “How many do you want?”
That’s what Luo Jianghua, general manager at Shanghai Laowen Stationery Co., said. When Luo, unrelated to Luo of Paiya, discovered that the caller was interested only in asking questions, he replied, “Oh, we don’t have that,” and quickly hung up.
Parker says it makes most of its pens in Britain and France, although the company operates three factories in China that produce lower-end products. None of them is anywhere near Wengang. Montblanc International, a subsidiary of Geneva-based Richemont, declined to comment.
Almost everybody in Wengang does something related to pens. Narrow alleys are filled with sounds of grinding metal for pen casings and noxious fumes from paint shops. Dozens of pen storefronts, on the ground floor of pale two- and three-story buildings, are scattered along the main road. Foreign brands are seldom on display, but merchants discreetly trade even fake pen cases: A Montblanc one could be had for $1.25.
Nine times a month, on days marked by the lunar calendar, villagers gather for a large pen fair in a shabby concrete building in the center of town. Hundreds set up booths or tables selling bamboo, ox bone and ivory for brush sticks, and all kinds of animal hair -- goat, rabbit, weasel, skunk -- for brush tips.
On a recent morning, Zhang Qungen stood behind a hanging display of his brushes made of bamboo and sheep wool, selling for $5 each.
A third-generation brush maker, the 42-year-old said there were fakes in town of famous brush brands too. He regarded those making and selling fake metal pens even lower.
“They’re of low quality,” he sneered. “They just want to make money.”
On the second floor of the market, some makers of brush pens were also taking orders for pirated metal ones. One trader said his family had a shop and could have ready 5,000 Parker pens in 10 days, a week if necessary. “Let me show you samples,” he said.
Brian Lou, the IPR protection supervisor for Parker in Shanghai, says some smaller fake-pen factories in Wengang appear to have closed down recently, though less because of government action than rapidly rising prices for metal and other commodities. Yet he said provincial authorities were stepping up enforcement, pushing many bootleggers underground. The counterfeiters then would set up shop in their homes, where authorities are restricted from conducting raids.
Larger counterfeit producers have turned to exporting on a made-to-order basis. China’s exports of ball, fountain and marker pens were valued at about $1.2 billion last year, up from $350 million in 2001, says China’s industry association.
But no one knows how many of those shipments were counterfeit. In October, U.S. customs officials in Memphis, Tenn., seized 20,000 counterfeit Sharpie markers, a brand owned by Parker’s parent company, Atlanta-based Newell Rubbermaid Inc.
Parker has been fighting piracy in China largely by going after wholesalers and retailers. Over the last two years, Lou says, the company has filed about 300 lawsuits, winning more than 90% of the cases that have closed and sharply reducing the supply of fake Parker pens in the Chinese market. But sometimes judgment awards are so small they’re not enough to pay investigative and legal costs.
In some instances, Lou noted, counterfeit pens are so well made that even investigators struggle to determine their authenticity. At some wholesale markets in Guangdong province, counterfeit Parker products that retail for $8 each can be bought for about a dime.
Lou and his team would like to stop the supplies at the source, but most see little hope of doing that any time soon, especially in a town like Wengang where the pen industry -- real and counterfeit -- is its economic lifeblood.
Local officials “need financial income like taxes. They want to resolve employment problems,” said Kevin Koo, an IPR lawyer in Shanghai who has handled cases for Parker. “The central government will not push local government to crush that.”