World Trade Organization tribunal adopts Panel report in United States‑China dispute over intellectual property rights, agreeing to some extent with United States complaints


World Trade Organization tribunal adopts Panel report in United States‑China dispute over intellectual property rights, agreeing to some extent with United States complaints

The World Trade Organization (WTO) has adopted the Report of the Dispute Settlement Panel circulated on January 26, 2009, in the U.S.‑China dispute over intellectual property rights. The U.S. claimed that China (Plaintiffs) does not adequately protect and enforce U.S. copyrights and trademarks.


The U.S. had brought the complaint before the WTO in April 2007, requesting consultations. Specifically, the U.S. claims that (1) China lacked criminal procedures and penalties for commercial counterfeiting and piracy, which is inconsistent with Articles 41.1 and 61 of the WTO Agreement on Trade‑Related Aspects of Intellectual Property Rights (TRIPS).

The U.S. alleges that China punishes trademark counterfeiting and copyright infringement only when the violators have exceeded certain thresholds; the TRIPS, however, arguably requires the punishment of all such infringements. (2) China allows the release of certain infringing goods seized at the border into the channels of commerce once the importer has removed the infringing trademarks; this is inconsistent with Articles 46 and 59 of the TRIPS . (3) China fails to provide the protections of the Berne Convention for the Protection of Literary and Artistic Works of 1896, as revised and amended until 1971 [in force for U.S. March 1, 1989] to works of those authors whose publications or distribution the government has not authorized; this does not square with Article 9.1 of the TRIPS.

The Panel found, in particular:
(a) that the Chinese Copyright Law, specifically the first sentence of Article 4, does conflict with China’s obligations under: (I) Article 5(1) of the Berne Convention (1971), as incorporated by Articles 9.1 and 41.1 of TRIPS.
(b) with respect to the Customs measures the Panel concludes: (I) that Article 59 of TRIPS does not apply to the Customs measures insofar as they apply to goods destined for export; (ii) that the United States has not shown that the Customs measures are at war with Article 59 of TRIPS, since it incorporates the principles set out in the first sentence of Article 46 of the TRIPS ; and (iii) that the Customs measures are inconsistent with Article 59 of the TRIPS, as it incorporates the principle set out in the fourth sentence of Article 46 of TRIPS.
(c) The Panel concludes that the United States has not established that the criminal thresholds conflict with China’s obligations under the first sentence of Article 61 of the TRIPS.

To the extent that the Chinese Copyright Law and the Customs measures are inconsistent with the TRIPS , they nullify or impair benefits accruing to the United States under that Agreement. The Panel thus recommends that China bring its Copyright Law and the Customs measures into conformity with its obligations under the TRIPS Agreement.

Citation: China—Measures Affecting the Protection and Enforcement of Intellectual Property Rights, Report of the Panel (WT/DS362/R) (26 January 2009). [The Report is available on website: www.wto.org; U.S. Trade Representative press release of March 20, 2009, is available on website: www.ustr.gov.]
 



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