The Counterfeit Merchandise Hunter
(Youth Weekend) By Jiang Wenjuan (蒋文娟). November 30, 2006.
The famous counterfeit merchandise hunter Lin Feng (林枫) was recently accused by the Xian police of extortion. After posting bond, he returned to Tianjin and was interviewed by our reporter. Lin said that the authorities had been negligent in their duties and allowed counterfeit merchandise to proliferate; he did not extort the pharmacy; and the pharmacy did not want to call the police at first, but the whole case occurred as a result of the hyping by a Xian media outlet.
On the evening of November 24, Tianjin resident Lin Feng who specializes in hunting down counterfeit merchandise stepped out of the Lianhu district detention center in Xian. After he returned to Tianjin, he read the several tens of thousands of news reports about his case on the Internet. When he read the clearly biased media reports and the critical comments of netizens, he felt bitter. "After hunting down counterfeit merchandise for so many years, this is the first that I have come across something like this. I will return to Xian and I will clean up the market there," he told the reporter.
On November 11, Lin Feng arrived in Xian and began his undercover investigation of the pharmaceutical market. Two days later, he reported the occurrences of counterfeit medicine to the department of industry and commerce and the medicine supervisory bureau. During the investigation against the Yikang Pharmaceutical Chain Store, Lin Feng received a 4,000 RMB reward from the store manager.
On November 17, the anti-counterfeit campaign of Lin Feng took a turnabout. As his anti-counterfeit activities at the Kaiyuan Business City winded down, the East Main Street Chamber of Commerce believed that his motives were impure. On the same day, the Yikang Pharmaceutical Chain Store complained to the Department of Industry and Commerce that Lin Feng extorted 4,000 RMB from them by promising no media exposure. The next day, the police determined that Lin Feng was suspected of involvement in extortion and formally detained him and confiscated the sum of money.
On November 20, the Xian Business and Commerce Association held a press conference about "Quality and Trust." They declared that the department of industry and commerce does not support any illegal anti-counterfeit merchandise campaigns.
A media commentary read: "On the first seven days, the anti-counterfeit campaign was red hot. On the last seven days, the detention was sad. Such were the heaven and hell in the anti-counterfeiting campaign of Lin Feng in Xian."
On November 24, Lin Feng posted bond while he awaited the legal decision. Three days later, Lin Feng was back in Tianjin.
Here is the transcript of the interview with Lin Feng:
Q: Were you well-prepared when you went to Xian to hunt down counterfeit merchandise?
A: I have plans to go around the country to hunt down counterfeit merchandise. On this trip, I went from Tangshan to Beijing to Xian. In Xian, I know Sun Anmin (a famous counterfeit merchandise hunter in Xian). So I went there after coordinating with him. My next stop was supposed to be Wuhan, but this thing happened.
Q: This thing occurred at the Yikang Pharmacy. How did you detect counterfeit medicine?
A: It requires mainly experience to detect counterfeit medicine and products. For example, health foods. The registration information is published at the Ministry of Health website. One can tell from registration numbers and packaging. The characteristic of counterfeit medicine is that it is for large dosage, it comes in large and luxurious packaging, it is priced for at least 100 RMB, and it will exaggerate its health effects. This time, I was able to detect counterfeit male potency medicine. It ought to have Chinese medicine ingredients, but it actually has nothing except for the components of Viagra. While this leads to quick erections, its use is banned by the state.
Q: Does the pharmacy know how to detect it themselves?
A: Sometimes, the pharmacy is deliberately selling counterfeits.
Q: Do you feel that the local medicine supervisory department has responsibilities?
A: The distribution of medical products in Xian involves several dozen businesses and counterfeit medical and health products are everywhere. This is not about one or two boxes, one or two kinds of medicine, but the entire store counter can be filled with counterfeit merchandise. I was engaged in the fight against counterfeit merchants the first day that I got there. Do you think that the local authorities are responsible for what happened?
At 9am on November 13, Sun and I went to Hancheng Road, which is the area with the largest distributors of medical products. I found two types of counterfeit medical products at the headquarters of Yikang. I determined that they were pure counterfeits. They also had an aphrodisiac which is a health product and not a medicine. But it had the registration number of another product from a Ningpo manufacturer. As soon as I saw the explanation on the packaging, I thought that it was counterfeit.
At the time, we reported these cases to the Xian medicine supervisory bureau. Usually, these inspections are held jointly by three departments. We could not get through to the department of health by telephone, so only investigators from the department of industry and commerce and the medicine supervisory bureau came to inspect the illegal medical products which they put under seal in the warehouses. The Shanxi provincial and Xian city media followed us. On that morning, four companies and pharmacies were inspected and it was quite a scene with many onlookers.
Q: Did you tell the legal enforcement agencies who you are?
A: When we arrived at the scene on November 13, we called in our reports and I said that I am an anti-counterfeiting specialist.
Q: Did the medicine supervisory bureau and the department of industry and commerce welcome your presence?
A: They were very cooperative for the first few days. They showed up in 20 minutes the first time. They were cordial when they see me. They welcomed our presence. They were dutiful in their efforts.
Q: Can you please describe the details of what happened at Yikang?
A: At the time, the two pure counterfeit products were detected. The store brought out the counterfeit documents, and they were seized. Yikang did not have a business permit to sell food supplements, so the food supplements at the store were taken off the shelves.
Q: Were they fined?
A: The Department of Industry and Commerce did not seem to have done anything. When I left Xian, the medicine supervisory bureau did not appear to have imposed any fines.
Q: The pharmacy store chain has its own quality inspection people. Don't they know that the medicine was counterfeit?
A: I spoke to Manager Lei in the quality inspection department. He apologized that they could not carefully inspect all of their many products. Besides, some of the counterfeit medicines went through proper procedures. By that, he meant that the manufacturers faked the procedures so that the document appear to be real. They were unable to tell the difference. Actually, it is possible to look up the registration numbers on the Internet.
So after inspecting the shops on that street, I still have the health products that I purchased the day before from the Yikang Pharmacy. The health product does not fall under the jurisdiction of the medicine supervisory bureau or the department of industry and commerce. It was up to the department of health, which did not send anybody over. So at around 1pm, I brought the package and went to the Yikang Pharmacy with Sun and the workers from three different media outlets. We went to the pharmacy store and I wanted to return the product. I was not going to demand compensation. I only wanted them to increase their alertness and inspect themselves more carefully. Their store manager Ms. Jin and the quality inspection department manager Mr. Lei took me to the second floor. After we reviewed the product, they agreed that it was counterfeit. After acknowledging the fact, they informed the stores in their entire chain to remove the product. They refunded the money to me and they stomped on the product with their feet in front of the media.
At that time, Ms. Jin called me into her office. She said, "With so many media showing up this morning, the reputation of the store is ruined." She was quite sincere and polite as she said that. She acknowledged that they have quality problems. I said, "As long as you are aware of the harm in the counterfeit products, then my goal has been achieved." She asked, "How do we settle today's problem?" I said, "I, Lin Feng, will never demand compensation from your store. According to the consumer laws, it is one-for-one. I return the merchandise to you and you refund my money." Then I also gave her some constructive ideas about reforms. After that she said, "Since you don't want compensation, I want to reward you with 4,000 RMB for your constructive advice ..."
Q: Did she volunteer on her own initiative to give you a reward? Did you hint to her?
A: She absolutely offered it herself. I can guarantee that. My business is to hunt down counterfeits, so I don't lie. There are people on the Internet who said that I asked for 10,000 RMB at first, 8,000 RMB next before settling for 4,000 RMB. That is nonsense. That is not true. If anyone says that, they better come up with the proof or else I'll sue them.
Q: At the time, Sun and the reporters were not with you?
A: Sun and the reporters were in Manager Lei's office. There was no third party.
Q: After you took the money, did you tell the others?
A: I told Sun, but the reporters did not know.
Q: Did you think about getting someone to accompany you? There would be a witness, at least.
A: At the time, I was afraid of things going wrong. So when she gave me the reward, I volunteered to write a receipt. She said that there was no need because we had an agreement. I said, "A receipt can prove certain things. It is better to have one."
So let me show this for you to read: "Since Lin Feng offered many reasonable recommendations about quality inspection, Yikang Medical Enterprises voluntarily rewarded the sum of 4,000 RMB exact to Lin Feng. Payer: Jin XX. Payee: Lin Feng." There two copies of this receipt. There was another quality assurance document, on which was written: "Concerning the reasonable recommendations from Lin Feng, the store is willing to inspect itself and increase its management of the legal business in order to guarantee the health of consumers. Guarantor: Lei XXX, November 13, 2006." The content of this document was agreed upon by us verbally, drafted by me and signed by both parties.
Q: Are there precedents of rewards from enterprises? Do you consider this a form of transaction?
A: I do not consider this to be a transaction. I often offer reasonable recommendations to companies and give them advise. They will reward me. I know about many things that a supermarket manager is unaware of. Therefore, I think that it is acceptable for companies to reward us. But we don't insist on it. If you offer it to us, we will accept. There is no law that says we cannot accept gifts.
Q: The local Xian media said that Lin Feng told them "There is no point going after your retail outlets. It is possible to make 100,000 RMB with one big enterprise. So you must offer between 5,000 RMB and 10,000 RMB here." Did you ever say that?
A: "This is purely fictional. I will assume responsibility for anything that I said at the police station . I hope that they can produce the videotape to show that I used words of extortion. If they can't, then I will sue them for libel and smearing. You must have some evidence. You cannot just make it up. If you say that I demanded one million RMB from you, then does that mean that I really demanded 1 million RMB from you?"
Q: What kind of reasonable recommendations did you give them?
A: The medicine supervisory bureau requires that the pharmacy must inspect any medical products. Each product should have three types of documentary proof. There has to be the approval document from the state medicine supervisory bureau. If the medicine and the documents are mismatched, then it must be verified; if this is counterfeit medicine, then it must not be put on the shelves. That is the first point. The second point is that health products cannot be advertised for its medical effects. If such products are found in a store, they must be removed immediately. The third point is that the seller cannot distribute illegal advertisements. The fourth point is one must follow the state laws on the sales of prescription medicine. Unless there is a prescription, the medicine should not be sold because that would be irresponsible towards the citizens. I told them that if there is anything they don't know or understand, they can just give me a call or send me an email. I will help them answer the questions.
Q: Were they willing to ask you for advice? Why should they trust you? You are merely a counterfeit product hunter.
A: They accepted it at the time, because I found many problems at their store which they could not identify themselves. They admired my knowledge about counterfeit products. I have spent ten years looking for counterfeit products. I am experienced in detecting counterfeit medical products.
Q: So you spend seven days in the detention center. What were your feelings?
A: Obviously, I did not feel good. I hunt down counterfeit products for the people. I did not do this for myself. I worked hard and I ended up in detention. Who is going to feel good about it?
Q: It seemed that the local department of industry and commerce changed its heart about you later on.
A: On November 16, the department of industry and commerce enforced the law and seized about 500,000 RMB worth of counterfeit products. But all of a sudden, the Xian East Main Street Chamber of Commerce president showed up in front of the cameras and said: "Based upon our investigation, these professional counterfeit hunters have ulterior motives when they go after the counterfeit products. The East Main Street Chamber of Commerce has received orders from our superiors not to support this anti-counterfeiting campaign! Everyone with the East Main Street Chamber of Commerce will withdraw immediately!" This was how the workers from the department of industry and commerce gave up looking for counterfeit products after having done so several days in a row previously.
Q: Under what circumstances did the man announce that?
A: This was the moment when they began to take away the inferior counterfeit products, such as the pirated compact discs, the lighters with no documentation, MP3 players and counterfeit CD and DVD players at the Kaiyuan Shopping Mall. After the department of industry and commerce gave up, I was arrested on November 17.
Q: Why did they permit you to post bond?
A: Because they have no evidence of criminal activity, or else I would not be talking to you over the telephone right now. The facts are straightforward. I don't think anything will come out of this. In the end, it will just be a muddle.
Q: Do you have proof that you were not extorting? Is the evidence that the police has in your favor?
A: It should be in my favor. If that was not true, they would not have let me out. Anyway, the fact that I am out proves everything. There is no evidence whatsoever that I asked them for money. The receipt and the guarantee document are favorable evidence for me.
Q: What is the weird part of this story?
A: On the day of the incident, I had just finished an appearance on a television program. At just after 2pm, a reporter with a Xian newspaper (the name of the reporter is concealed at the request of Lin Feng) asked me and Sun to meet at a teahouse. We went there as arranged. As soon as we got to the second floor and before we even sat down, the police and two Yikang manager came to put me under arrest.
Afterward, someone down at the police station told me that a certain newspaper had called the police for the purpose of creating a big news story. That newspaper is a big local newspaper. It has a good advertising relationship with the Yikang Medical Enterprise. When they first went to the police themselves, their request was rejected because they were not the victims. So they got Yikang to file the police report, even though the company did not want to do so originally. I am perplexed about this, because I don't know for sure whether this is true. These were comments from the police officers. So the police took me away and placed me under detention.
Q: After the incident, did that newspaper hype that story up?
A: They hyped it up. They spent a lot of news space to attack me. But they have just reversed course. After I got out, they wrote favorably about me after I got out. As you can see on the Internet, they only wanted to hype the story up, one way or the other. I did not know that reporter before, and he did not dare to meet me afterwards. Nevertheless, he kept writing those reports. When the police showed up, I asked that reporter: "Did you set me up?" I don't think that there is anyone else but him. This is quite obvious.
Q: How did he know that Yikang gave you 4,000 RMB?
A: They have a good relationship with Yikang. They spoke by telephone on the evening after Yikang gave me the reward. Yikang asked the newspaper not to report about them, and the newspaper did not. When the newspaper reported on the case, it did not mention the name Yikang.
Q: You said that you intend to return to Xian. Aren't you afraid that someone might sue you?
Q: If I don't accept a cent when I go there, who is going to sue me? This incident taught me that I must pay more attention at protecting myself. But I will continue to accept rewards from companies that genuinely want to fight against counterfeiters, because it is not against the law.
[Were Lin Feng's claims true? Our reporter contacted the reporter at the Xian newspaper. That reporter declined an interview on the grounds that the approval of the chief editor must be obtained first. When our reporter told him what Lin Feng said, that reporter said: "This is nonsense! It is a fact that the Xian police detained him. If he did not extort money, why would the police detail him?" Yikang's quality inspection department manager Mr. Lei also rejected Lin Feng's claims. He insisted that it was true that Lin Feng was extorting money. Yikang's general manager Ms. Jin did not answer to mobile telephone calls or messages left with her family. Our reporter called Sun, and he confirmed that Lin Feng spoke the truth: "This was something that the reporter created. Now everyone -- their newspaper, Yikang Pharmaceuticals, the police, the industry and commerce sector and Lin Feng -- are all embarrassed." He also said, "He did that in order to come up with a piece of sensationalistic news. Most Xian media reports were fair and they supported our campaign against counterfeit products."]
Q: There are at most several hundred people hunting down counterfeit products in China. Do you feel that the government law enforcement agencies should work harder to fight against counterfeiting?
A: Fighting counterfeit products is a mass movement. The people have the right and duty to do so. It is insufficient to rely solely upon the law enforcement agencies. It is also insufficient to rely solely upon the counterfeit hunters. These two groups have to unite with the people to fight counterfeiting in order to chase them out wherever they may be.
Q: The point about setting up those law enforcement agencies is to let them carry about those functions. But if we cannot rely on them and the people must do everything themselves, then this is too much for the people. When they buy anything, they need to have professional expertise and they need to know this and that, or else they will be deceived. Is it fair to the people if they don't have a reliable government department as the gatekeeper?
A: That is sorrowful. There are three reasons why counterfeit products proliferate. First, the laws in China impose light penalties against counterfeiting. According to penalties stated in the laws on drug control, the fine is at least twice the amount but not more than five times. It is against the law to impose a bigger fine. In the United States, you are barred from the industry for life if you sold counterfeit products just once. For an American consumer, if he/she manages to find a counterfeit product, he/she can become rich (by suing the seller). Secondly, the specific government departments have not fulfilled their supervisory role. The law enforcers fail in their jobs. Some of them detect counterfeit products but refuse to follow through. They also protect local businesses. Thirdly, the consumers lack an awareness about rights protection. When they purchased a counterfeit product, they don't have the energy to protect their rights. The cost of testing a product is high. For example, a pair of shoes costs 50 RMB but a test costs 500 RMB. It costs more than 200 RMB to purchase a bicycle, but a test costs 3,000 RMB. The compensation process is complicated, the costs are too high and the returns are too small. So consumers give up their quest for compensation, and this encourages the counterfeiters. For example, I bought a pack of medicine and I find a counterfeit product. The pharmacy may ask me for proof. The medical supervisory bureau will conduct tests only for enterprises, not for individuals.
Q: After spending so many years in fighting counterfeiting, do you think that it is an easy job?
A: It is very easy to check out the pharmacies. It is harder to find out where the products are stored. The local law enforcement agencies are bad. They only know where the food is good or where the wine is good, and they don't know how to look for counterfeit goods. Sometimes, I file reports to them and they are astonished. They said, "How can this be counterfeit medicine?" They are lousy workers and they know nothing.
Q: Are they really limited in their knowledge, or could it that the local authorities wanted to protect their local businesses?
A: Some of them truly don't know. For example, I met a young man at the medicine supervisory bureau and I told him that the product violated the drug control laws. He asked me, "Where does this break the law? How does this break the law? How do you know that it is breaking the law?" When I went to Xian, I took the department of industry and commerce people on inspections. Someone followed me humbly like an elementary school student asking, "Teacher Lin, what is the problem with this one?" Xian Evening News had an article criticizing the department of industry and commerce people for not knowing the law and not knowing about the counterfeit merchandise.
Q: Are there any other problems?
A: I feel that when I come in as an outsider to look for counterfeit products in their territory, some people's nerves are rubbed. After I conducted the anti-counterfeit activities, the Xian Chamber of Commerce held a press conference denouncing me. They said that the situation in Xian was great, the consumer environment was good and willfully avoided any self-reflection.
Q: If there wasn't local protectionism, might we see fewer counterfeit products?
A: That is for sure. I can say that the lack of knowledge at the law enforcement agencies and local protectionism contributes to the proliferation of local counterfeit products. I have personally detected many thing that the department of industry and commerce did not detect. That is risible.
Q: So we see that you hunt counterfeit products, but this time you were "hunted" down. What kind of environment should our society provide for our counterfeit merchandise hunters?
A: The state should come up with regulations that both restrict as well as support the counterfeit merchandise hunters. We are a force that cannot be ignored and we compliment the law enforcement agencies. We provide the consumers with another level of protection of their interests.
Related Link: Drug pirates leave death in their wake. By Jonathan Watts. The Guardian, December 4, 2006.