The former chairman of Jianlibao beverage brands, Zhang Hai, started serving a 10-year prison sentence in 2008 for bribery. He was released just a year later because he patented an invention — an automobile front and rear double mirror. The problem was that Zhang hired others to do the inventing.
China law allows prisoners to be released early if they come up with patentable inventions. Like Zhang, many benefiting from the law are rich prisoners, often serving prison time for corruption, the Shanghai Daily said.
Nan Yong, the former director of the Football Management Center of the General Administration of Sport, was serving a 10-year sentence for corruption. His sentence was commuted in December last year after he was credited with patentable inventions related to football while in prison.
The Penal Law of China allows for commutation of prison sentences when prisoners “have genuine repentance or make significant contributions.” Inventions that can be patented are often deemed “significant contributions.”
The law has led to businesses that provide a “one-stop” service for prisoners to create “tailor-made” inventions and apply for patents.
The Shanghai Daily investigated the racket. It made an undercover call to an online shop in Guangzhou, Guangdong Province, that provides patent application and sales services.
“The shop didn’t advertise on its website that it can make patentable inventions for prisoners, but the customer service manager surnamed Wang made it clear that they could offer any services related to patentable inventions, once he learned that was the purpose of the phone call,” the paper said.
“As far as we know, different prisons have different regulations. I suggest you find out the specific regulations,” Wang told Shanghai Daily.
He asked the undercover reporter to send details about prisoner, “including his education, expertise, hobbies, former job and the industry he had worked in.”
“We can offer a tailor-made invention for your friend, which will have more chance to pass,” the manager said.
Wang Weihua, a lawyer in the Shanghai office of the Yingke Law Firm, said: “Patent inventions, somehow, have been kind of a loophole in the law for those rich prisoners.”
“And it is against the law to offer such service,” he said.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.