By+Li+Li

In 1995， Wang Hai， a 22-year-old salesman from east Chinas Shandong Province， was studying for a law degree in his spare time when he stumbled upon a potential gold mine.

Article 49 of the Law on the Protection of Consumer Rights and Interests， also known as the Consumer Rights Law， which took effect on January 1， 1994， stipulates that businesses engaged in fraudulent operations when supplying commodities or services are to return the money paid by the consumer as well as pay compensation equaling the costs that the consumer paid for the commodities or services upon the demand of the latter.

“Before the law came out， consumers could only claim the money they paid for counterfeited products based on the General Principles of the Civil Law. However， Article 49 supports consumers rights to further punitive compensation. This discovery enlightened me，” Wang recalled when talking with Xinhua News Agency 17 years later.

On March 25， 1995， during a business trip to Beijing， Wang bought 12 fake Sony headsets for 85 yuan （$14） each at a shopping mall and went directly to the local administration for industry and commerce to file a complaint and demand compensation. As Article 49 of the Consumer Rights Law had not been invoked in legal proceedings before， Wang was asked to provide proof as well as quality appraisal reports produced by the quality inspection authority. Eight months later， Wang received a refund and an extra 1，020 yuan （$168）.

In that year， Wang intentionally bought knockoff products， including belts and wallets， at 10 other shopping malls in Beijing and successfully claimed compensation totaling 8，000 yuan （$1，320） in one month alone.

Wangs initial successes in using Article 49 of the Consumer Rights Law to claim compensation were reported widely and earned him the title of “Chinas first professional counterfeit goods fighter.”

On December 17， 1995， Wang became the first consumer to receive an award from the China Foundation of Consumer Protection for his anti-counterfeiting efforts.

“I would like to think of myself as both a citizen and a consumer-rights advocate，” Wang told Xinhua.

However， on other occasions Wang told the media that his fight against counterfeiting is purely about money. “I am using a commercial approach to address a social problem，” Wang once told Qingdao Morning News， a local newspaper in Shandong.endprint

In 1996， Wang set up a company specializing in fighting counterfeit goods with its own legal team in Beijing. Wang told Xinhua that between 1996 and 2012， his team filed nearly 2，000 lawsuits that claimed compensation for a wide range of substandard products such as refined oil， steel， auto parts， dietary supplements， soft drinks and laundry detergent.

In Wangs interview with Qingdao Morning News in March 2013， he indicated that he had made more than 10 million yuan （$1.65 million） by exposing counterfeiting over the years and had founded four consulting companies in different cities， including the one in Beijing. His companies are paid generously by enterprises， such as pharmaceutical companies， to investigate and sue competitors who they allege have violated their intellectual property rights.

Following Wangs rise to fame， his followers quickly emerged throughout the country， starting a fledgling but growing consumer protection movement in China.

An amendment to the Consumer Rights Law， which was adopted in October 2013 and will go into effect on March 15， has increased the compensation standard for consumers victimized by fraudulent products or services. It is now three times the cost they paid for the products or services， and should be no less than 500 yuan （$82.5）.

Controversy

However， the profit-based business model of those professional counterfeit fighters has also raised concerns. While Wang has been hailed as “a hero protector of consumer rights” by his supporters， he is also seen by others as abusing the law for profit.

After Wang had won many cases suing companies for producing or selling poor-quality goods， he encountered the first major setback of his career on January 7， 1998， when a court in north Chinas Tianjin denied his claim for compensation on the grounds that he could not be considered a consumer under the legal definition.

Between August and October 1996， Wang bought a total of 23 trafficked Sony cordless phones from several shopping malls in Tianjin and sued all of them in different courts for selling illegal merchandise after his compensation requests were denied by the malls.

While Wang won an earlier case demanding compensation for five phones， he was denied compensation in a later case involving two phones.

The ruling of the Hebei District Peoples Court said that Article 49 of the Consumer Rights Law could not be invoked as the plaintiffs purchase of as many as 23 cordless phones within a matter of less than 40 days was not to meet his own daily needs as he purchased them willingly while aware of their illegal status.endprint

Other professional counterfeit fighters have been encountering similar defeats at courts since the second half of 1997. Nationwide， judges in different provinces have different understandings over the status of professional counterfeit fighters and try cases according to their own standards.

However， professional counterfeit fighters might experience a change to their careers as of January 9， with the issuance of a judicial interpretation that aims to provide more protection for food and drug consumers by the Supreme Peoples Court （SPC）， Chinas highest judicial authority.

According to the document， which will go into effect on March 15， courts should not throw out compensation claims on the grounds that a consumer bought them knowing there were defects and had intended to file for compensation rather than to use the products as they were intended.

“Before this regulation came out， courts held different attitudes toward claimants who were aware of a products defects，”Wang Yuying， a judge at the SPC， told newspaper Legal Weekly. “For example， courts in Guangdong Province generally support their claim to compensation while courts in Hunan Province hold the opposite view. As a matter of fact， there were clashes of opinions during the drafting of the judicial interpretation.”

Li Xueyin， former Chief Editor of China Consumer Journal， said that based on this document， judges need to support compensation claims from professional counterfeit fighters， ending a legal debate that had lasted for almost two decades. Li said that the lack of consistency or unity in judicial and law enforcement systems on this issue has damaged the image of government authorities.

“This judicial interpretation could unify the understanding and actions of judicial organs， government law enforcement departments and consumer rights organizations，” Li commented.

Wang Yuying believes that with this judicial interpretation， food and drug manufacturers and distributors will feel the pressure of being monitored by tens of thou- sands of people all the time.

“I believe that a market economy should be customer-oriented and this judicial interpretation makes a huge move in that direction，”Wang Hai told Legal Weekly.

Grey area

Professors of law have long been supporters of Wang Hai and his followers. Some of them， however， feel disappointed with the SPCs judicial interpretation.

Liu Chuntian， a law professor at Beijingbased Renmin University of China， told Procuratorial Daily that professional counterfeit fighters play an important role in rectifying market order， and that with more followers they could act as a formidable deterrent force for people knowingly selling counterfeit products. He considers it a shame that the SPCs judicial interpretation doesnt clearly support the emerging profession.endprint

“The final measure over the action of professional counterfeit fighting is whether it is fair and justified. Judicial authorities should support it if the answer is yes，” Liu said.

Professor Shen Weixing， Vice Dean of the Law School of Tsinghua University， said that many judges do not support professional counterfeit fighters on the grounds that sellers of counterfeit and substandard goods had not committed fraud against them as the former knew of these goods problems beforehand. Shen argued that the fraud exists as long as business people knowingly sell counterfeit and substandard products.

Zhang Yongjian， a senior judge at the Civil Tribunal of the SPC， told the website edition of Peoples Daily that the latest judicial interpretation is intentionally vague concerning professional counterfeit fighters and their companies， as rulings on cases concerning them are still at an exploratory stage.

“Professional counterfeit fighting is a double-edged sword. It can help curb counterfeiting and piracy as well as helping to defend normal market order. However， on the other hand， their acts could be morally questionable and disturb market order in other ways. We will continue to study their cases. No conclusion has been made yet，” Zhang said.endprint