China, US each like WTO ruling

GENEVA: China won a partial victory in a World Trade Organization (WTO) ruling late last month on intellectual property rights (IPRs) dealing with movies, DVDs and publications, as the World Trade Organization (WTO) formally turned down the majority of the claims launched by the US two years ago.

But the comments also showed that major trading powers are still ready to work within the international rules-based system to resolve rows even if the economic crisis is increasing protectionist pressures.

In March, the WTO's dispute settlement body adopted a Jan 26 ruling in a case brought by the United States against China for failing to protect and enforce intellectual property rights, such as copyrights and trademarks, on a wide range of goods.

The Dispute Settlement Panel said there wasn't enough proof to support US claims that China's copyright-related rules and regulations are inconsistent with its obligations under the WTO.

The US claims included China's denial of copyright protection to works that have not been approved for publication or distribution in China, the removal of infringing trademarks as the precondition for sale at public auction of counterfeit goods seized by Chinese customs authorities, and the lack of criminal procedures and penalties in China against copyright piracy.

But the United States yet still believed the WTO is in favor of the nation. "Today, the membership of the WTO agreed that China must bring its intellectual property rights enforcement regime into conformity with its WTO obligations," said Ron Kirk, the new US Trade Representative.

The United States persuaded the dispute panel that China had violated WTO rules by barring copyright protection for films, music and books that had not been approved by state censors for legitimate sale.

The panel ruled that it was impermissible for China to allow the public auction of counterfeit goods seized by Chinese customs authorities, with the requirement that fake brands or trademarks be removed.

But the United States failed to persuade the panel of one of its central arguments: that Chinese copyright pirates and counterfeiters have no fear of criminal prosecution because the government's threshold for bringing a case is too high.

China's Ministry of Commerce said the WTO had rejected most of the US complaints and broadly backed Beijing's stance against commercial piracy, and added the findings did not affect China's right to censor content.

"The expert group report rebutted the great majority of the US side's claims and broadly vindicated China's intellectual property system," spokesman Yao Jian said in a statement issued on the ministry's website (www.mofcom.gov.cn).

The United States launched the case in 2007 out of frustration at rip-offs of films, branded goods and other trademarked property openly available in Chinese cities.

CBW -- Agencies

Editor's note: The IPR Special is sponsored by the State Intellectual Property Office and published by China Business Weekly. To contact the Intellectual Property Office, the IPR Special hotlines are 8610-64995422 or 8610-64995826, and the e-mail address is ipr@chinadaily.com.cn.

(China Daily 04/06/2009 page11)