U.S. seeks WTO panel on China's IP protection

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The White House is continuing to press its case against China for its failure to protect U.S. movies and other copyrighted works as the nation's top trade warrior said Monday that it wants the World Trade Organization of convene a panel to settle the dispute.

"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," U.S. Trade Representative spokesman Sean Spicer said. "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 request for the settlement panel 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 regime 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 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:

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

-- The disposal of pirated goods seized by Chinese customs authorities that appear to permit those goods 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.

It appears that Chinese copyright law gives the copyright holders 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 in a statement. "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."
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