USTR Reviewing China Intellectual Property Record
China’s track record intellectual property rights is under the microscope. One week remains before the U.S. Trade Representative closes the industry comment period in a sweeping examination of that country’s efforts to control piracy and enforce existing laws on copyright infringement.
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The special “out-of-cycle” review isn’t unusual, but its scope is, said a USTR source: “This will be a much more complex assessment than we typically engage in.” China was tagged for the review in USTR’s 2004 Special 301 report for laxness in enforcing its intellectual property laws. In April, the U.S.-China Joint Commission on Commerce & Trade agreed to an action plan for improving China’s behavior. China vowed to reduce infringement levels, increase penalties and apply criminal sanctions to the import, export, storage and distribution of pirated and counterfeit goods. The country also promised to boost enforcement and to extend to local govts. a ban on the use of pirated software.
Changing China’s longstanding culture of piracy is now a top priority for the USTR as the country begins to open its billion-citizen market to foreign companies. “A wide swath of industry is interested because the problem is so large and the potential market is so large,” said the source. The USTR often uses out-of-cycle reviews to leverage compliance from recalcitrant countries.
In a letter to industry late last year, Deputy USTR Josette Shiner asked for specific input: “We need industry to provide data on the prevalence of intellectual property rights infringement in China and provide examples of specific individual cases where [those rights] in China have or have not been respected.” Of particular interest are detailed reports on pirated products, the cities where infringement is most prevalent, specific sources of pirated goods and data on enforcement and deterrence, or lack thereof. “In addition to this factual information, we encourage industry to provide its detailed evaluation of specific strengths and weaknesses of China’s legal regimes,” wrote Shiner.
The comment period ends Jan. 31, but there’s no definite publication date for the report. “We're not going to be locked into announcing a review deadline,” said the source. “We're analyzing the whole [intellectual property] landscape of China.”