1. David Creegan Kenia Duran Minah Faheem
China- Measures Affecting the Protection and Enforcement of Intellectual Property Rights
David Creegan
Kenia Duran
Minah Faheem

2. Objective of Presentation
The history and context of the case.
Highlight all prior proceedings; focusing on the most recent proceeding as well as the business and political context of the case.
The main WTO issues; as well as the position of the main parties, and the recommendations of the panel.
The contested issues of laws or practices involved.
The specific WTO agreement and specific provisions involved.
Are the national acts consistent or inconsistent with WTO obligations?
What has happened concerning implementation and sanctions (if any)?
Observations concerning the dispute in the context of the global trading system.

3. History Complaint made by the US:
Requested China on 4 matters of Consultations for intellectual property rights in China.
Thresholds to be met for certain acts of trademark counterfeiting and copyright piracy for subject to criminal procedures.
Goods that are confiscated by Chinese custom authorities.
Scope of covering unauthorized reproduction and unauthorized distribution of copyright works’ criminal procedures and penalties.
Denial of copyright and related rights protection and enforcement to creative works of authorship, sound recordings and performances that have not been authorized for publication or distribution within China.

4. History
The US claimed that the 4 requests made to China had inconsistencies with the TRIPS Agreement based on the following arguments
Lack of criminal procedures and penalties for commercial scale counterfeiting and piracy in China as a result of the thresholds appears to be inconsistent with China’s obligations.
Infringing goods had to be released into the channels of commerce under the circumstances set forth in the measures at issue appears to be inconsistent with China’s obligations.

5. History
Authors of works whose publication or distribution has not been authorized are not protected by the minimum standards of those protection.
Authors whose works are required to undergo pre-publication review are subject to the successful conclusion of such review.
The Copyright Law also denies protection of so-called related rights to performers and producers of sound recordings during the period of any pre-publication.
The Chinese authors’ works, Chinese performers’ performances and Chinese producers’ sound recordings are favored with protection and copyrights compared to foreign nationals’ works.
The Copyright Law causes foreign authors of works whose publication or distribution has not been authorized unable to enjoy the rights granted to Chinese authors, the measures at issue are inconsistent with China’s obligations.
Article 4 of China’s copyright law makes it impossible for rights holders to enforce their copyrights or related rights with respect to works, performances, or sound recordings that have not been authorized for publication or distribution.

6. Proceedings - DSB Panel
September 25th, 2007: DSB established a panel with Argentina, The European Communities, Japan, Mexico, Chinese Taipei, Australia, Brazil, Canada, India, Korea, Thailand and Turkey.
After the composing of the panel, the DSB was informed by the chairman of the panel that due to the complexities of the issues, the panel wouldn’t be able to complete its work within six months from the date of the panel’s composition.
The panel was then expected to issue its final report to the parties by November 2008.

7. Proceedings - 2009 Conclusion
On January 26th, 2009, the panel concluded that the Copyright Law specifically the first sentence of Article 4, is inconsistent with China’s obligations under Article 5 (1) of the Berne Convention (1971), as incorporated by Article 9.1 of the TRIPS Agreement; and Article of the TRIPS Agreement.

8. Main WTO Issues Copyright: Customs Measures: Criminal Thresholds:
The United States claims that China is acting inconsistently with its obligations under the TRIPS Agreement by denying the protection of its Copyright Law to creative works of authorship that have not been authorized for, or are otherwise prohibited from, publication or distribution within China.
Customs Measures:
The United States claims that China's measures for disposing of confiscated goods that infringe intellectual property rights are inconsistent with China's obligations under the TRIPS Agreement.
Criminal Thresholds:
The United States claims that China has not provided for criminal procedures and penalties to be applied in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale that fail to meet certain thresholds.
Concluding remark
VIII.745 In this dispute, the Panel's task was not to ascertain the existence or the level of trademark counterfeiting and copyright piracy in China in general nor to review the desirability of strict IPR enforcement. The United States challenged three specific alleged deficiencies in China's IPR legal system in relation to certain specific provisions of the TRIPS Agreement. The Panel's mandate was limited to a review of whether those alleged deficiencies, based upon an objective assessment of the facts presented by the parties, are inconsistent with those specific provisions of the TRIPS Agreement.
MEASURES AT ISSUE 1
1. Thresholds for criminal procedures and penalties 2
2. Disposal of goods confiscated by customs authorities that infringe intellectual property rights 2
3. Denial of copyright and related rights protection and enforcement to works that have not been authorized for publication or distribution within China

9. WTO Agreement: Provisions of the TRIPS Agreement
Article 9.1: "Members shall comply with Articles 1 through 21 of the Berne Convention (1971) and the Appendix thereto. However, Members shall not have rights or obligations under this Agreement in respect of the rights conferred under Article 6bis of that Convention or of the rights derived therefrom."
Article 41.1: "1.Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse."
Article 59: "Remedies: Without prejudice to other rights of action open to the right holder and subject to the right of the defendant to seek review by a judicial authority, competent authorities shall have the authority to order the destruction or disposal of infringing goods in accordance with the principles set out in Article 46. In regard to counterfeit trademark goods, the authorities shall not allow the re-exportation of the infringing goods in an unaltered state or subject them to a different customs procedure, other than in exceptional circumstances."
Article 61: “Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale.”
Article 61: China submits that is not specific. China says the first sentence of Article 61 cannot set forth a specific obligation because it provides for enforcement against certain types of infringement but neither the TRIPS Agreement nor the Berne Convention (1971) define what constitutes substantive infringement. Rather, they defer to national discretion to define the rights being infringed.

10. China’s Copyright Law
Article 4: "Works the publication and/or dissemination of which are prohibited by law shall not be protected by this Law."

11. 2. China’s Customs Measures
Article 27: Provides for the confiscation of goods determined to have infringed an intellectual property right.
Article 30: Provides for the disposal of infringing goods it has confiscated.
Public Notice No. 16/2007: To regulate the auction of infringing goods by Customs in accordance with Article 27.

12. 3. China’s Criminal Law Trademark provisions:
Article 213: Use of a counterfeited trademark
Article 214: Selling counterfeit trademark commodities
Article 215: Forgery of trademarks and sale of forged trademarks
Copyright provisions:
Article 217: Criminal Copyright Infringement
Article 218: Selling copyright-infringing reproductions

13. Copyright: Positions of the United States
Article 9.1: Article 4 of China's Copyright Law denies the protection of the Copyright Law to certain categories of works.
The authors of such works do not enjoy the minimum rights that are "specially granted" by the Berne Convention.
Article 41.1: China fails to ensure that enforcement procedures as specified in Part III of the TRIPS Agreement are available.
Article 4 of the Copyright Law only denies "copyright protection" not "copyright"
Article 61: China does not provide for, or make available, criminal procedures and penalties to be applied in certain cases of wilful copyright piracy on a commercial scale.
National Treatment: Measures appear to establish different pre-distribution and pre-authorization review processes for Chinese nationals' works, performances (or their fixations) and sound recordings
Article 9.1: Works that have not successfully completed content review...may not legally be published or distributed within China. Article 41: argues that, therefore, authors of the works for which copyright protection is denied do not benefit.

14. Copyright: Positions of China
Article 9.1: Article 4 was not dependent on content review or any other regulatory regime related to publication and that the only result of a finding of prohibited content in that process was a denial of authority to publish, not a denial of copyright. The Chinese system of "copyright" and "copyright protection" are distinguishable.
Article 41.1: China submits that its copyright enforcement procedures are "available", in the sense in which that term was interpreted in US – Section 211 Appropriations Act, because the author of any work may go to court and seek remedies, regardless of what judgement a court eventually reaches
Article 61: U.S. claim fails in light of the fact that copyright is not in fact denied under the Copyright Law as alleged by the United States.
National Treatment: The United States has neglected to assert any claim whatsoever and thus has seemingly abandoned the national treatment arguments.
National Treatment claim, not submitted

15. Customs Measures: Main Points from Both Parties
Position of the United States:
Article 59: the competent Chinese authorities lack the scope of authority to order the destruction or disposal of infringing goods required by Article 59. The authorities should have the power to choose among any legitimate options for dealing with these goods from the outset when the goods are found to be infringing.
Position of China:
Article 59: “Donation to social welfare bodies” and “sale to the right holder” constitute disposal outside the channels of commerce in such a way as to avoid harm to the right holder.
China: The determination of what constitutes an appropriate grant of authority under the TRIPS Agreement is highly circumstantial.

16. Criminal Thresholds: Positions of the United States
Only challenges the conviction thresholds as these render prosecution impossible in the absence of certain criteria:
Issue with "serious circumstances" in Articles 213 and 215, "relatively large amount of sales" in Article 214, "relatively large amount of illegal gains" or "other serious circumstances" in Article 217 and "huge amount of sales" in Article 218.
Any or all of the alternative thresholds leaves many acts of commercial scale piracy and counterfeiting immune from criminal prosecution or conviction.
Only criminal procedures and penalties can fulfil the obligations in Article 61 of the TRIPS Agreement.
Administrative enforcement is not a substitute.
Article 61: China can not make the necessary remedies "available" or sufficient to deter piracy and counterfeiting.
Article 41.1: China has failed to make the procedures and penalties required by the first and second sentences of Article 61 "available".

17. Criminal Thresholds: Positions of China
Throughout the Criminal Law, the definitions of various crimes are accompanied by rules for determining at what point the particular proscribed conduct becomes so serious as to constitute a crime.
Articles 213, 215 and 217 of the Criminal Law are all alternatives.
Illegal business operation threshold, in particular, is a flexible standard in its own right.
Article 61: "Commercial scale" refers to a significant magnitude of infringement activity. This is a broad standard, subject to national discretion and local conditions. The obligation in the second sentence of Article 61 is supplementary to, and contingent on, that of the first sentence of that Article.
Article 41.1: The United States has failed to show that China breaches its obligations under Article 61 and therefore fails to show that China breaches its obligations under Article 41.1

18. Recommendations by Panel
The Panel concludes that the Copyright Law and the Customs measures as such are inconsistent with the TRIPS Agreement:
They nullify or impair benefits accruing to the United States under that Agreement.
China bring the Copyright Law and the Customs measures into conformity with its obligations under the TRIPS Agreement.
The Copyright Law is inconsistent with China's obligations under:
Article 5(1) of the Berne Convention (1971), as incorporated by Article 9.1 and Article 41.1 of the TRIPS Agreement
Customs Measures:
Article 59 of the TRIPS Agreement is not applicable to the Customs measures insofar as those measures apply to goods destined for exportation.
the Customs measures are inconsistent with Article 59 of the TRIPS Agreement
The United States has not established that the criminal thresholds are inconsistent with China's obligations under the first sentence of Article 61 of the TRIPS Agreement.
-The Panel observes that the United States has made this claim contingent upon the outcome of its claims under the first sentence of Article 61 of the TRIPS Agreement. Additional findings regarding this claim under the second sentence of Article 61 would not contribute further to a positive solution to this dispute. Therefore, it is unnecessary for the Panel to rule on this claim. (for criminal thresholds)
-China was pretty much okay, but just had to update some stuff (Copyright and Customs)
-China was cleared on criminal threshold
-Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment. China did not succeed in rebutting that presumption. Accordingly, the Panel concludes that, to the extent that the Copyright Law and the Customs measures as such are inconsistent with the TRIPS Agreement, they nullify or impair benefits accruing to the United States under that Agreement. (743)

19. Recommendations by Panel (Cont.)
The Panel exercises judicial economy with respect to:
The claim under Article 5(2) of the Berne Convention (1971)
The claims under Article 61 of the TRIPS Agreement (with respect to the Copyright Law)
The claims under Article 41.1
The claim under the second sentence of Article 61 of the TRIPS Agreement (with respect to the criminal thresholds)

20. Implementations
15 April 2009: China informed the DSB that it intended to implement the DSB recommendations and rulings and that it would need a reasonable period of time to do so.
29 June 2009: China and the United States informed the DSB that they had agreed that the reasonable period of time for China to implement the DSB recommendations and rulings shall be 12 months from the adoption of the report. (20MAR2010)
19 March 2010: China reported that on 26 February 2010, the Standing Committee of the 11th National People's Congress had approved the amendments of the Chinese Copyright Law.
17 March 2010: The State Council had adopted the decision to revise the Regulations for Customs Protection of Intellectual Property Rights. The United States said that it was not yet in a position to share China's claim.
08 April 2010: China and the United States notified the DSB of Agreed Procedures under Articles 21 and 22 of the DSU.
No sanctions found.
Thus, it had completed all necessary domestic legislative procedures for implementing the DSB recommendations and rulings.

21. Observations Concerning Dispute
With regards to the Panel Report:
There could have been more claims, yet the U.S. was unable to provide substantial evidence.
What’s not considered enough? Is the evidence subjective?
Arguing Sentence-by-Sentence
With regards to the Global Trading System:
Highlights a lack of uniformity of intellectual property laws of WTO members’ nations

22. Questions?