Next push for China IPR protection

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WASHINGTON -- The White House is stepping up its case against China for Beijing's failure to protect U.S. movies and other copyrighted works from piracy.

The U.S. Trade Representative's office has asked the World Trade Organization to convene a panel to settle the dispute. The request is the next step in the U.S.' attempt to get a WTO suit before the trade body.

In April, the Bush administration initiated dispute settlement proceedings over deficiencies it sees in China's legal structure for protecting and enforcing copyrights and trademarks by requesting consultations with China. Consultations were held in June, and under WTO rules, the WTO Dispute Settlement Body will consider the U.S. request for establishment of a panel at its next meeting, which is scheduled for Aug. 31.

"The United States and China have tried, through formal consultations over the last three months, to resolve differences arising from U.S. concerns about inadequate protection of intellectual property rights in China," said Sean Spicer, spokesman for U.S. Trade Representative Susan Schwab. "That dialogue has not generated solutions to the issues we have raised, so we are asking the WTO to form a panel to settle this dispute."

The U.S. alleges that China violated provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) related to three aspects of China's IPR regime, including:

-- Quantitative thresholds in China's present criminal law that allow wholesalers and distributors to operate without fear of criminal liability, effectively permitting piracy and counterfeiting on a commercial scale;

-- Revising rules that allow pirated goods seized by Chinese customs authorities to be released into commerce following the removal of fake labels or other infringing features; and

-- The apparent denial of copyright protection for works poised to enter the market but awaiting Chinese censorship approval. Chinese copyright law appears to give the copyright holder no right to complain about copyright infringement before censorship approval is granted. Immediate availability of copyright protection is critical to protect new products from pirates, who -- unlike legitimate producers -- do not wait for the Chinese content review process to be completed.

"It is in the best interest of all nations, including China, to protect intellectual property rights. Over the past several years, China has taken tangible steps to improve IPR protection and enforcement," Spicer said. "However, we still see important gaps that need to be addressed. We will pursue this legal dispute in the WTO and will continue to work with China bilaterally on other important IPR issues."

While U.S. copyright industry experts noted that Chinese authorities have taken some recent steps to more aggressively combat piracy, they questioned Beijing's resolve.

"Some actions, no matter how promising, and some rhetoric, no matter how sweeping and heartfelt, are simply not enough," RIAA international executive vp Neil Turkewitz said. "China is part of the international trading community bound by rules and obligations. It must meet such obligations."

In April, the Bush administration said it was filing two new trade cases against China over copyright piracy and restrictions on the sale of American movies, music and books there. By asking for the dispute resolution panel, the administration now takes the second step in the process. If the U.S. wins the cases, it would be allowed to impose economic sanctions on Chinese products.
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