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 http://videofilesinc.com/mingle/wp-content/uploads/2011/07/copy-protection-matters.jpg 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…. 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