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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