1. Cherrita Guy Geoffrey Johnson La’ Toya Holt
U.S. Vs China – Measures Affecting the Protection and Enforcement of Intellectual Property Rights (WT/DS362)
Cherrita Guy
Geoffrey Johnson
La’ Toya Holt

2. Intellectual Property (IP) and Copyrights Defined by WTO
"Intellectual property" refers to creations of the mind. These creations can take many different forms, such as artistic expressions, signs, symbols and names used in commerce, designs and inventions.
“Intellectual property rights” refers to rights a Government grants creators to prevent others from using their inventions, designs or other creations — and to use that right to negotiate payment in return for others using them. These are They take a number of forms. For example, books, paintings and films come under copyright; eligible inventions can be patented; brand names and product logos can be registered as trademarks; and so on. Governments grant creators these rights as an incentive to produce and spread ideas that will benefit society as a whole.
IP issues as it relates to our case focused on copyrights and trademarks
Source:
World Trade Organization, “Understanding the WTO: Agreements, Intellectual Property: Protection and Enforcement.” Retrieved from Downloaded on October 14, 2018.

3. Historical Context: Intellectual Property Rights in U.S. and WTO
Lanham Act, 15 U.S.C. §§ 1051 et seq, (Trademark Act of 1946)
Federal statue that governs trademarks, service marks, unfair competition
Enacted by Congress on July 5, 1946
The Act provides for a national system of trademark registration and protects the owner of a federally registered mark against the use of similar marks if such use is likely to result in consumer confusion, or if the dilution of a famous mark is likely to occur.
U.S. Code: Title 17-Copyrights
Federal legislation enacted by Congress July 30, 1947, under its Constitutional grant of authority to protect the writings of authors.
U.S. Copyright Act of 1976
Revised U.S. Code Title 17 in its entirety; enacted On October 19, 1976, as Pub. L. No , 90 Stat [went into effect on January 1, 1978]
Contains the basic framework for the current copyright law
Incorporates relevant references to the Lanham Act and protections relevant for trademarks
Source: Cornell Law, “U.S. Code: Title-17 Copyrights and Berne Convention,” Legal Information Institution. Retrieved from and Downloaded on September 25, 2018.
“Cornell Law, “Lanham Act,” Legal Information Institution. Retrieved from Downloaded on October 15, 2018.
United States Copyright Office, “Copyright Law of the United States and Related Laws Contained in Title 17 of the United States Code, Circular 92. December Retrieved from Downloaded on October 5, 2018.

4. Historical Context: Intellectual Property Rights in U. S
Historical Context: Intellectual Property Rights in U.S. and WTO continued
Berne Convention for the Protection of Literary and Artistic Works:
Signed in Berne, Switzerland on September 9, The Berne Convention aims to help nationals of its signing countries obtain international protection of their right to control and to receive payment for the use of their creative works
U.S. became a party to the Berne Convention in 1989, with the enactment of the Berne Convention Implementation Act of 1988
The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Right (TRIPS):
Negotiated during the Uruguay Round, introduced intellectual property rules into the multilateral trading system for the first time
The Agreement is legal recognition of the significance of links between intellectual property and trade
The purpose was to ensure that minimum standards of protection exist in all WTO members
Source: World Trade Organization, “Intellectual Property: protection and enforcement,” Understanding the WTO: The Agreements. Retrieved from Downloaded on September 25, 2018.
World Trade Organization, “A unique contribution,” Understanding the WTO: Settling Disputes. Retrieved from Downloaded on September 25, 2018.
World Trade Organization, “ Overview: a navigational guide,” Understanding the WTO: The Agreements. Retrieved from Downloaded on October 7, 2018.

5. Historical Context: Intellectual Property Rights in U. S
Historical Context: Intellectual Property Rights in U.S. and WTO continueD
China joined the WTO December 11, 2001
The WTO oversees about 60 different agreements, which have the status of international legal texts. Member countries must sign and ratify all WTO agreements on accession
WTO Dispute Settlement Understanding
When a member does not abide by the agreements set in place, the WTO's procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed

6. History of U.S./China IPR Efforts and Violations
1991
1995
2004
2005
2006
U.S. & China Come to an Agreement
China Continues a Poor Record on IPR Enforcement
China Failed to meet 2004 IPR Commitments
U.S-China Sec 301 Case
U.S.-China Joint Commission on Commerce and Trade
Source: Morrison, Wayne M, (2008), “ China-U.S. Trade Issues,” Congressional Research Service; Foreign Affairs, Defense, and Trade Division, Cornell University ILR School. March 7, (pp 24-26). Retrieved from Downloaded on September 25, 2018.
Photo: The Photo is by Unknown Author is licensed under CC BY-ND
U.S. threatened to impose $1.5 billion in trade sanctions against China if it failed to strengthen its IPR laws.
China pledged to take long- term enforcement action against IPR piracy and provided greater market access to U.S. IPR related products.
China’s limited progress in improving IPR enforcement leads USTR to announce that a WTO dispute case was close to being filed.
In 2004, China pledged to “significantly reduce” infringement levels.
U.S. Chamber of Commerce seeks for USTR to initiate WTO consultations with China over IPR issues

7. DS362: China — Measures Affecting the Protection and Enforcement of Intellectual Property Rights
On 10 April 2007, the United States requested consultations with China concerning certain measures pertaining to the protection and enforcement of intellectual property rights in China.
The four matters on which the United States requests consultations are:
The thresholds that must be met in order for certain acts of trademark counterfeiting and copyright piracy to be subject to criminal procedures and penalties;   
Goods that infringe intellectual property rights that are confiscated by Chinese customs authorities, in particular the disposal of such goods following removal of their infringing features;   
The scope of coverage of criminal procedures and penalties for unauthorized reproduction or unauthorized distribution of copyrighted works; and   
The 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.

8. U.S. Claims of China’s Inconsistencies with trips Agreement
The United States claims that in relation to the four above-mentioned matters possible inconsistencies with the TRIPS Agreement arise as follows:
The 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 under Articles 41.1 and 61 of the TRIPS Agreement.
The requirement that infringing goods 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 under Articles 46 and 59 of the TRIPS Agreement.
Authors of works whose publication or distribution has not been authorized (and whose publication or distribution is therefore prohibited) appear not to enjoy the minimum standards of protection specially granted by the Berne Convention in respect of those works (and may never enjoy such protection if the work is not authorized, or is not authorized for distribution or publication in the form as submitted for review). In addition, the rights of authors of works whose publication or distribution is required to undergo pre-publication or pre-distribution review appear to be subject to the formality of successful conclusion of such review. The foregoing appears to be inconsistent with China's obligations under Article 9.1 of the TRIPS Agreement.

9. U.S. Claims of China’s Inconsistencies with trips Agreement Continued
In addition, to the extent that 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 or pre-distribution, the Copyright Law appears to be inconsistent with China's obligations under Article 14 of the TRIPS Agreement.
Inconsistencies with China's obligations under Article 9.1 of the TRIPS Agreement (with respect at least to China's obligations to comply with Articles 5(1) and 5(2) of the Berne Convention).
In addition, to the extent that 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, China appears to act inconsistently with China's obligations under Article 41.1 of the TRIPS Agreement.
Performances (or their fixations) and sound recordings result in earlier or otherwise more favorable protection or enforcement of copyright or related rights for Chinese authors' works, Chinese performers' performances (or their fixations) and Chinese producers' sound recordings, the measures at issue appear to be inconsistent with China's obligations under Article 3.1 of the TRIPS Agreement.
To the extent that willful copyright piracy on a commercial scale that consists of unauthorized reproduction — but not unauthorized distribution — of copyrighted works, and vice versa, may not be subject to criminal procedures and penalties under the law of China, this would appear to be inconsistent with China's obligations under Articles 41.1 and 61 of the TRIPS Agreement.
Additionally, to the extent that Article 4 of the Copyright Law causes foreign authors of works whose publication or distribution has not been authorized not to enjoy the rights granted to Chinese authors, the measures at issue appear to

10. Panel & appellate Body pROCEEDINGS
Comprehensive Timeline of Panel Formation & Report Issuance
2007
2007
2007
2008
2009
Sept 25
Dec. 3
Dec. 13
July 16
Jan. 26
Panel Established
U.S. Request
Panel Composed
Panel Delayed
Final Report Issued
The Director- General composed the panel.
Argentina, the European Communities, Japan, Mexico and Chinese Taipei reserved their third- party rights. Subsequently, Australia, Brazil, Canada, India, Korea, Thailand and Turkey reserved their third-party rights.
The United States requested the Director-General to compose the panel.
The Chairman of the panel informed the DSB that due to the complexity of issues presented in this case, the panel would not be able to complete its work within six months from the date of the panel's composition.
The panel expected to issue its final report to the parties by November However it wasn’t until this time that the actual report was circulated

11. Summary of panel findings
TRIPS Art. 61 (border measures – remedies): The Panel found that while China's criminal measures exclude some copyright and trademark infringements from criminal liability where the infringement falls below numerical thresholds fixed in terms of the amount of turnover, profit, sales or copies of infringing goods, this fact alone was not enough to find a violation because Art. 61 does not require Members to criminalize all copyright and trademark infringement. The Panel found that the term “commercial scale” in Art. 61 meant “the magnitude or extent of typical or usual commercial activity with respect to a given product in a given market”.
The Panel did not endorse China's thresholds but concluded that the factual evidence presented by the United States was inadequate to show whether or not the cases excluded from criminal liability met the TRIPS standard of “commercial scale” when that standard is applied to China's marketplace.

12. Summary of panel findings continued
TRIPS Art. 59 (remedies): The Panel found that the customs measures were not subject to Trips Agreement Arts. 51 to 60 to the extent that they apply to exports. With respect to imports, although auctioning of goods is not prohibited by Art. 59, the Panel concluded that the way in which China's customs auctions these goods was inconsistent with Art. 59, because it permits the sale of goods after the simple removal of the trademark in more than just exceptional cases.
TRIPS Art.  9.1 (Berne Convention – Arts.  5(1) and 17) and TRIPS Art.  41.1 (enforcement – general obligations): The Panel found that while China has the right to prohibit the circulation and exhibition of works, as acknowledged in Art. 17 of the Berne Convention, this does not justify the denial of all copyright protection in any work. China's failure to protect copyright in prohibited works (i.e. that are banned because of their illegal content) is therefore inconsistent with Art. 5(1) of the Berne Convention as incorporated in Art. 9.1, as well as with Art. 41.1, as the copyright in such prohibited works cannot be enforced.

13. Implementation of final report
On 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. 
On 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. Accordingly, the reasonable period of time expired on 20 March 2010. 
On 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 and that on 17 March 2010, the State Council had adopted the decision to revise the Regulations for Customs Protection of Intellectual Property Rights.  Thus, it had completed all necessary domestic legislative procedures for implementing the DSB recommendations and rulings.  The United States said that it was not yet in a position to share China's claim that it had implemented the DSB recommendations and rulings.
On 8 April 2010, China and the United States notified the DSB of Agreed Procedures under Articles 21 and 22 of the DSU

14. U.S. and China’s Consistency with TRIPS Agreement
TRIPS Articles Involved in Case
China
U.S.
TRIPS Article 61 
TRIPS Article 59 
TRIPS Art.  9.1 (Berne Convention – Arts.  5(1) and 17) and TRIPS Art.  41.1 (enforcement – general obligations):

15. Current U.S. Intellectual Property Actions
Other Significant U.S. Legislation:
Unlocking Consumer Choice and Wireless Competition Act (P.L on August 1, 2014)
STELA Reauthorization Act of 2014 (With the Senate as of July 29, 2014 [Read twice and referred to the Committee on Commerce, Science, and Transportation)
H.R and S. 2823, Music Modernization Act
Introduced April 10, 2018 and May 10, 2018, respectively
H.R 1695 and S. 1010, the Register of Copyrights Selection and Accountability Act of 2017
Introduced March 23, 2017 and May 2, 2017, respectively
H.R. 3945, the Copyright Alternative in Small-Claims Enforcement (CASE) Act of (Introduced October 4, 2017)
S. 2559, Marrakesh Treaty Implementation Act (Introduced March 15, 2018)
Source: 115th Congress, “Legislative Developments.” Retrieved from Downloaded on October 7, 2018.

16. IPR: A Continued Area of Contention for U.S. and China
Section 301 has been an item of contention between the U.S. and our trading partners
In 1998: EU with 15 other countries as third parties, including Japan, South Korea, and Canada whom filed a complaint against section 301 at the WTO; however, the U.S. won the case
U.S.-China Continued IPR Issues
In August 2017, USTR initiated an investigation under Section 301of the Trade Act of 1974 to investigate China’s potential discriminatory actions harming American intellectual property rights, innovation, or technology development
Based on the results of the investigations, the USTR was directed to take all appropriate action under Section 301 of the Act, which included assessing increased tariffs on goods from China
In using Section 301, the U.S has acted unilaterally and has argued that the policies investigated are not covered by WTO agreements
Source:
Presidential Memoranda, “Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation. March 22, Retrieved from Downloaded on October 14, 2018.
Jia, Li, “Defending Free Trade,” News China Magazine, Volume No September 2018
Simon, Ruth, “Tariffs Hit Those Trump Wants to Help: U.S. Factories,” Wall Street Journal. October 14, Retrieved from Downloaded on October 14, 2018.

17. U.S. Position Based on 2017 USTR Investigation
China uses foreign ownership restrictions, including joint venture requirements, equity limitations, and other investment restrictions, to require or pressure technology transfer from U.S. companies to Chinese entities
China also uses administrative review and licensing procedures to require or pressure technology transfer, which, inter alia, undermines the value of U.S. investments and technology and weakens the global competitiveness of U.S. firms.
China imposes substantial restrictions on, and intervenes in, U.S. firms’ investments and activities, including through restrictions on technology licensing terms.
China directs and facilitates the systematic investment in, and acquisition of, U.S. companies and assets by Chinese companies to obtain cutting- edge technologies and intellectual property and to generate large-scale technology transfer in industries deemed important by Chinese government industrial plans
China conducts and supports unauthorized intrusions into, and theft from, the computer networks of U.S. companies
Source:
Presidential Memoranda, “Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation. March 22, Retrieved from Downloaded on October 14, 2018.

18. China Position on IPR Issues with U.S.
Chinese officials plans with contracting and doing business with the West has always been to modernize and obtain technology from the West without losing political control, which is typically done through a joint venture
China believes that the U.S. mixes business mixed with politics
China explained that the U.S. often resorts to its domestic laws in the tariff measures
China sides with other U.S. trading partners with frustration over U.S. unilateral trade tactics
In general when doing business with China, the interests of the Republic outweigh ongoing contract and negotiations with foreigners

19. Best practices & RECOMMENDATIONS
China’s prompt implementation of the DSB recommendations helped strengthen their credibility with the WTO and with the U.S. Their implementation timeline serves as a model for the handling of DSB recommendations IPR dispute cases.
The formation of the panel for this case was very methodical and appropriate according to the circumstances of the case.
In order to preserve diplomatic relations between countries within the WTO, it is important that disputes be handled appropriately and in a timely manner between parties, and with respect for the WTO and its obligations.

20. Observations and conclusions
In all, the U.S. has levied tariffs on $250 billion of Chinese imports, with threats of more to come
Multiple disputes have been submitted to the WTO to request consultation dealing with IPR issues. In particularly involving the EU, and with other members as complainants.
China has filed WTO complaints against the U.S. tariffs on goods
Most WTO members agree that it is necessary to fix the WTO, not abandon it and support the continuation of the rule-based, multilateral trade system.
Common ground in WTO members disagreement with the U.S. implementation of unilateral tariffs has started to bring regional powers closer together to defend multilateralism and free trade (particularly the EU and China, in spite of grievances around IPR)
U.S. Trading partners are involved in several pending Regional Trade Agreements which could cover a significant share of world trade
Congress is now faced with understanding how these agreements will affect the U.S. economic and strategic interests, their impact on U.S. leadership in trade liberalization efforts and establishing new trade rules, and the appropriate U.S. response
Source:
Presidential Memoranda, “Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation. March 22, Retrieved from Downloaded on October 14, 2018.
Jia, Li, “Defending Free Trade,” News China Magazine, Volume No September 2018
Simon, Ruth, “Tariffs Hit Those Trump Wants to Help: U.S. Factories,” Wall Street Journal. October 14, Retrieved from Downloaded on October 14, 2018.
Williams, Brock R., “Bilateral and Regional Trade Agreements: Issues for Congress,” Congressional Research Service. May 17, Retrieved from Downloaded on October 14, 2018.