(By Wu Pengbin) 1. Introduction
I was the defense counsel of this case, in which the defendant was induced to conduct an illicit transaction and involved in a controlled delivery. The case facts are summarized as follows:
The defendant, Mr. Zheng resigned from his employment as an engineer from the informant, Sany Heavy Industry Co., Ltd. (referred to as ‘SANY’ hereafter) two years ago before the crime was committed. As charged by the People’s Procuratorate of Fengxian District, Mr. Zheng sold SANY’s technical drawings he illicitly obtained to ‘Mr. Zhou’, who paid in cash for the sale (at the price of RMB 700,000), and was caught red-handed by the police of Fengxian Public Security Bureau. The drawings sold by Mr. Zheng was recognized to be business confidential and worth about RMB 800,000.
After I was involved in the case as the defense counsel, two questionable points drew my attention. Firstly, no legal actions were taken against ‘Mr. Zhou’, an alias used by someone whose real surname is ‘Liu’ to ‘purchase’ the drawings. Secondly, the cash of RMB 700,000 involved in the transaction was returned to ‘Mr. Zhou’ on the date of the arrest instead of being impounded by the police. Accordingly, I believe the purchaser of the drawing, ‘Mr. Zhou’ was secretly deployed by the police or SANY as a decoy, which has been substantiated by a letter of explanation provided the investigator from SANY with a list of contacts on its back, on which there was a phone number belonging to a person surnamed ‘Liu’ (ie. the purchaser, ‘Mr. Zhou’), the same as that of ‘Mr. Zhou’s handwriting and specified as a SANY’s staff of Supervision Division on the police interview transcripts and another transcripts (saying someone reported he was planning to sell the drawings to Mr. Zheng in an hotel) made at around 8:30 a.m. on the date when Mr. Zheng was caught red-handed at around 11:00 a.m.
Taking all the above into account, I pleaded on behalf of the defendant not guilty at court for the reason that he was induced to conduct the transaction and made a controlled delivery. On the one hand, SANY deployed a staff to induce Mr. Zheng into the transaction, in which the staff pretended to purchase and pay for the drawings. On the other hand, the delivery starting at around 11 a.m. was controlled by the police after the investigating authority received a detailed report on it at 8:30 a.m. of the same day. Therefore, it’s an atypical criminal case involving entrapment and a controlled delivery.
In the three opening sessions of the first instance the People’s Court of Minhang District partially accepted our defensive arguments and admitted there were conditions of inducement and controlled delivery under which the transaction was conducted for this case. Despite this, the defendant was convicted because he had criminal intent and was sentenced to just ten months, including nine months and 20 days for which he had been in custody before the verdict was delivered. In this sense, the defendant almost needn’t stay in prison, so he didn’t appeal the verdict, which, from my point of view and based on legal principles, should have been that the defendant was not guilty.
2. Stipulation on criminal inducements and controlled deliveries in current laws and regulations
Transactions under conditions of inducement, characterized as being initiated or even participated in by investigating entities, differ from deliveries controlled by the police without investigating entities being involved in them, but none of them are clearly defined in the Criminal Procedure Law. However, as far as I know, there are some undisclosed files internally used by the Ministry of Public Security and the Supreme People’s Court, indicating that transactions under conditions of inducement shall be ‘criminal intent induced’ or ‘quantity induced’ and stipulating principles on how to deal with controlled deliveries. In ‘criminal intent induced’ cases, drug sellers, who have no criminal intent at first, but eventually commit crimes due to inducement by some secret investigators, deserve penalty reduction and shall not be sentenced to immediate execution via death penalty no matter how many drugs they sell. In ‘quantity induced’ cases, drug sellers, who intend to sell small quantities of drugs at first, but eventually sell in larger quantities due to inducement by some secret investigators, deserve penalty reduction and shall not be sentenced to immediate execution via death penalty even though the quantities of drugs they sell meet requirements for such sentences. For example, in a drug criminal case, it was concluded on the verdict [(2011) S.Z.F.X.Y.C.Z.No.5, delivered by Shenzhen Intermediate People’s Court] that the defendant, Huang Mocheng shall be entitled to penalty reduction for the reason that he was, to some extent, induced by secret investigators into commiting the crime, based on defensive arguments made by the defendant and his defender, which were proved to be true. In terms of controlled deliveries, ‘they shall be regarded as a qualification for penalty reduction since drugs traded in controlled deliveries are hardly accessible to the general public, resulting in much fewer damages.’
Obviously, being induced into illicit transactions or involved in controlled deliveries doesn’t mean being not guilty. Minutes on drug cases by the Supreme People’s Court suggest that inducements to crimes and controlled deliveries get so much approval that even inducements leading to criminal intent (that should have been prohibited) are allowed and induced criminals are guilty although they are entitled to penalty reduction, which is an ‘extremely loose’ policy.
3. The impact of criminal inducements and controlled deliveries on conviction of business secret infringement and other intellectual property offences
Although criminal inducements and controlled deliveries sin the course of investigation are not definitely prohibited by law, I pleaded not guilty on behalf of the defendant for the following reasons. The infringement on business secrets is defined as a consequential offence. The defendant was charged by the prosecutor of ‘disclosing and giving others access to SANY’s business secrets, which resulted in its damages of RMB 700,000’. However, the business secrets were virtually ‘sold’ and ‘disclosed’ to nobody but SANY itself (who deployed the so-called Mr. Zhou for criminal inducement). In other words, no real disclosure of SANY’s business secrets occurred in this case because the secrets concerned were transferred from the defendant to the staff deployed by SANY, which resulted in no real damages. Therefore, even though Mr. Zheng had criminal intent and obtained the drawings by illicit means, these did not constitute a crime. Meanwhile, the whole transaction was controlled by the police, so it was essentially impossible to cause any damage.
Criminal inducements and controlled deliveries are common in the course of investigating crimes relating to business secrets, copyrights, trademarks, etc. Shall investigators or owners be allowed to purchase something illicit from potential criminals to have themselves become criminals who shouldn’t have been convicted because their original sales of illicit products are not large enough? I don’t think they should be allowed to do so because their actions aim at forcing crimes instead of obtaining evidence by investigation, which clearly violates the judicial ethics.
In the case introduced at the beginning, the prosecutor pointed out that it was SANY rather than the investigating authority that deployed the inducement, if any, and no clauses stipulating inducements deployed by victims can be found in current laws. However, in my opinion, it is taken for granted now that law enforcement agencies shall not induce others to commit crimes, other organizations or individuals shall not do so, either.
4. A Comparison: ‘Traps for Evidence’ in Civil Litigations
It is common and widely accepted without a doubt that plaintiffs obtain evidence for litigations against civil intellectual property infringements by purchasing infringing objects secretly and having the act of purchase notarized unless the act constitutes an inducement to ‘criminal intent’ ( which, in fact, rarely occurs).
How do ‘traps for evidence’ differ from ‘criminal inducements’? As far as I’m concerned, the traps as forensic gathering methods that are used to obtain evidence without inducing others to have criminal intent or conduct illicit transactions in larger quantities, while criminal inducements forces criminal intent or larger illicit transactions, or even constitute crimes, for example, in the above case of SANY’s business secret infringement offence (which wouldn’t have been committed if the drawings taken out of SANY were not bought by the staff deployed by SANY as a decoy for criminal inducement). My point of view is that the investigator may secretly buy something illicit to obtain evidence on intellectual property related offences which tend to be concealed, but the evidence obtained in such a way shall be only used to substantiate criminal activities without being included in the quantitative basis of conviction.
5. Interpretation of Relevant Clauses in the Latest Criminal Procedure Law
As stipulated in the 151st clause of the latest Criminal Procedure Law taking effect on 1 January 2013, ‘criminal investigation can be conducted secretly by somebody whose identity is disguised or concealed if necessary under the approval by a public security authority, but the investigator shall not induce others to commit crimes or investigate in ways possibly damaging the public security or others’ personal safety seriously. Investigations on trafficking of illicit products like drugs or possessions are allowed to be conducted through controlling deliveries if necessary.’
Does the ‘criminal inducements’ that shall not be allowed mean ‘inducements to criminal intent’ only or both ‘inducements to criminal intent’ and ‘inducements to larger illicit transactions’? It depends on further interpretation by the Supreme People’s Procuratorate, the Supreme People’s Court and the Ministry of Public Security in the future. No regulations or rules on controlled deliveries were amended recently. At present, controlled deliveries of fake or illicit products in intellectual property offences are recognized to be illegal actions.
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