U.S. – CHINA -- MEASURES
AFFECTING THE PROTECTION
AND ENFORCEMENT OF
INTELLECTUAL PROPERTY
RIGHTS
GEORGE MASON UNIVERSITY
I N T E R N ATI O N A L T R A D E R E L AT I O N S
P R O F. M A L AW E R
OCTOBER 11, 2011
ANDREA L MOODY
NICOLAS DAVID PAZMINO
TARIQ MAHMOOD MIAKHEL
http://thehivedaily.com/blog/2011/07/16/obama-dalai-lama-meeting-angers-china/
Intellectual Property
Definition:
Intellectual property (IP) refers to creations of the mind: inventions, literary and
artistic works, and symbols, names, images, and designs used in commerce.
Importance of Intellectual Property in US
China and US Disputes
-Agreement in 1992
-Agreement in 1995 and 1996
-In 2001 China joins the WTO
-Even with new TRIPS agreements and the Berne Convention
there is friction between the US and China
Timeline of Case
April 10, 2007: The US requests consultation with China on four matters
April 20, 2007: Japan requests to join
April 25, 2007: Canada and European communities request to join
April 26, 2007: Mexico requests to join
August 13, 2007: The US requests the establishment of a panel
FOUR MATTERS:
1. Threshold for criminal prosecution
2. Copyright protection
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http://www.domainnamenews.com/wpcontent/uploads/2009/08/bars.jpg
4. Coverage of criminal procedures
3. Auctioning of counterfeit goods
http://img.alibaba.com/images/cms/upload/news811/20100708_1_2.jpg
http://www.goway.com/asia/china/ch_img/china_index_map.jpg
Complaint 1
US Complaint:
China set thresholds for trademark counterfeiting and copyright piracy that
needed to be met before criminal procedures and penalties could take place
China’s View:
Thresholds are already in place and they are not specified in the TRIPS
agreement
Inconsistency with WTO
Inconsistent with Articles 41.1 and 61 of the TRIPS Agreement
Complaint 2
US Complaint:
Chinese customs authorities confiscating goods that infringe intellectual property
rights
The disposal of goods after infringing features were removed
China’s View:
The Articles do not prohibit auctioning of goods
Goods were destroyed only if infringing features could not be removed
Inconsistency with WTO:
Inconsistent with Articles 46 and 59 of the TRIPS Agreement
Complaint 3
US Complaint:
Lack of coverage of criminal procedures and enforcement for unauthorized
production and distribution of copyrighted works
China’s View:
Gives protection to those authorized for publication and distribution in China
Inconsistency with WTO:
Inconsistent with Articles 3.1, 9.1, 14, and 61 of TRIPS Agreement, as well as
Berne Convention Articles 5.1 and 5.2
CHINESE POSITION
"The Chinese government's attitude
towards intellectual property rights
protection has always been resolute,
and its achievements obvious to all“
"By doing so, the United States has
ignored the Chinese government's
immense efforts and great
achievements in strengthening IPR
protection and tightening enforcement
of its copyright laws"
http://www.infomongolia.com/images/stories/news/news/2011/6/16/mini
stry-of-commerce-of-china-4-web.gif
- China Commerce Ministry
spokesman Wang Xinpei
 Regret and strong dissatisfaction at
USTR’S decision to file for WTO
consultations.
 Attempt by the USA administration to
deal with rising political anger over
soaring U.S. Trade deficits.
 U.S. Government has ignored the
Chinese efforts and achievements in
strengthening intellectual property
rights.
 April 2 release of its action plan on IPR
protection 2007 formulated by the SIPO
and relevant working groups.
 $232 billion U.S. trade deficit with China
http://www.reuters.com/article/2007/04/10/us-china-us-trade-idUSPEK30032920070410
UNITED STATES POSITION
“China’s reliance on administrative instead of
criminal measures to combat intellectual
infringements, corruption and local
protectionism, limited resources and training
available to enforcement officials, and lack of
public education regarding the economic and
social impact of counterfeiting and piracy.”
http://rapidproductdevelopment.biz/2011/09/08/statement-from-acting-u-s-commerce-secretaryrebecca-blank-following-final-senate-passage-of-the-leahy-smith-america-invents-act/
- U.S. Department of Commerce
 China allows large-scale piracy and
counterfeiting
 China violates WTO rules that required
infringing goods to be removed from the
market
 Denial of copyright protection
 The issue of criminal liability to the
person that produces a copyright work
but doesn’t distribute it
http://blogs.ft.com/beyond-brics/files/2011/04/chinacounterfeit1.jpg
 Violates the channels of distribution
DECISION (RECOMMENDATION)
 Key panel findings: Criminal thresholds, Customs
Measures, Copyright Law
 The Panel did not endorse China's thresholds
 The United States did not show proper evidence to
make its argument strong
 China is required by TRIPS to provide for criminal
procedures and penalties
 Art. 61 of TRIPS requires China not to set its thresholds
for prosecution of piracy
 The panel did not agree with the U.S. that the seized
goods must be destroyed
 China bring the Copyright Law and the Customs
Measures that are inconsistent with the TRIPS into
conformity with its TRIPS obligations
http://corporateforeignpolicy.com/wp-content/uploads/2009/04/china-spy-257x300.jpg
IMPLEMENTATION
 "Agreed Procedures under Articles 21 and 22 of
the Dispute Settlement Understanding“
 China requested reasonable period of time to
implement the DSB, time expired on 20 March
2010
 National People's Congress approved the
amendments of the Chinese Copyright Law
on March 17, 2010
http://images.china.cn/images1/200801/418020.jpg
 Agreed Procedures under Articles 21 and 22 of
the DSU
http://www.youtube.com/watch?v=M4zwujKVKpY
OBSERVATIONS
 Legal Framework has Strengthened but not to everyone’s liking
 A series of prosecutions in the early parts of 2011
 Enforcement Measurements are insufficient
 Case received significant amount of International 3 rd party Interest
 Examples of copying….
OBSERVATIONS
Real
FAKE
OBSERVATIONS
Real
Fake
REFERENCES
The Energy Collective (Washington), "Cleantech Entrepreneurs; Hope Wanes For Intellectual Property Protection In China ," September 28,
2011. . (accessed October 1, 2011).
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http://www.reuters.com/article/2007/04/10/us-china-us-trade-idUSPEK30032920070410 (accessed October 3, 2011).
" China claims great progress in anti-piracy fight | Reuters." Business News - Indian Stock Market, Stock Market News, Business & Finance,
Market Statistics | Reuters India. http://in.reuters.com/article/2008/04/17/industry-china-piracy-dc-idINPEK26129320080417
(accessed October 3, 2011).
"WTO Ruling Says China Must Bolster Its Copyright Law (Update1) - Bloomberg." Bloomberg - Business & Financial News, Breaking News
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"Newsvine - China Unhappy With US Action on WTO." Newsvine - Get Smarter Here.
http://www.newsvine.com/_news/2007/12/10/1153009-china-unhappy-with-us-action-on-wto (accessed October 3, 2011).
Thomas, Kristie , Ping Wang, and Fanshu Yang. "RECENT WTO DISPUTES INVOLVING THE PROTECTION AND ENFORCEMENT OF
INTELLECTUAL PROPERTY RIGHTS IN CHINA: LEGAL AND POLITICAL ANALYSIS." University of Nottingham 1 (2007): 1-12.
"WTO | dispute settlement - the disputes - DS362." World Trade Organization - Home page.
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds362_e.htm (accessed October 5, 2011).
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