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US disputes China's anti-piracy success

The US said China has failed to crack down on counterfeiters and pirates of copyrighted movies, and laid out improvements Chinese authorities must take to avoid a dispute over the issue at the World Trade Organization (WTO).

In a report on protection of intellectual property rights globally, the US Trade Representative's office elevated China into its "priority watch list" of countries that are among the worst offenders of trademarks and copyrights. That list also includes Russia, Brazil, Pakistan and 10 other nations.

The trade office will use the procedures of the WTO to prod China to provide details on its enforcement of counterfeiting laws, including what criminal penalties have been handed out to movie and music pirates.

"China must take action to address rampant piracy and counterfeiting, including increasing the number of criminal cases and further opening its market to legitimate copyright and other goods," Acting US Trade Representative Peter Allgeier said in a statement.

The theft of copyrighted materials has become the largest irritant in the US$190 billion annual commercial relationship between the US and China.

More than 1,500 record, movie and software companies banded together in February to petition the Bush administration to immediately bring China into consultations at the WTO over pirated merchandise they say sapped US$2.5 billion in sales last year.

The Bush administration stopped short of that action today, even as it acknowledged that China has failed to live up to promises it made a year ago to crack down on the problem.

A spokesman for the Chinese Embassy in Washington defended the country's enforcement efforts.

"China has done a lot to protect intellectual property rights," said the spokesman, Chu Maoming. "Last year alone, more than 9,000 cases were filed."

Makers of auto parts, clothing, pharmaceuticals and other goods also complain about Chinese producers counterfeiting their merchandise, stealing the designs or technology of their products, and mislabeling cheap products as brand-name goods.

"We're bleeding here, and our folks are not happy," said Eric Smith, president of the International Intellectual Property Alliance, which represents software, publishing, entertainment and music associations.

The US Trade Representative's office in September asked companies to provide details of Chinese theft of trademarks and patents as part of a special review of China's anti-counterfeiting measures. The review may form the basis of a WTO complaint, it said.

A criminal network distributed counterfeit Viagra through as many as 30 brokers in the US and 10 other countries, Pfizer Inc said a year ago, and the US has complained that many Chinese government offices are using illegal copies of Microsoft Corp's software.

The US said Ukraine was the worst violator of intellectual property rights, the same ranking it held last year. The 13 countries with China on the priority watch list are: Argentina, Brazil, Egypt, India, Indonesia, Israel, Kuwait, Lebanon, Pakistan, Philippines, Russia, Turkey and Venezuela.

All 20 members of the Senate Finance Committee sent a letter to US President George W. Bush yesterday urging him to get "immediate results" from China on its protection of trademarks.

"We urge your administration to intensify your efforts to ensure China's compliance with its" WTO obligations, the senators wrote in their letter.
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