WTO Favors U.S. Over China on Piracy

The World Trade Organization has given the U.S. a major piracy victory, finding China has failed to live up to obligations to protect intellectual property.

The World Trade Organization has handed the United States a major victory in its long-running piracy disputes with China, finding that China has failed to live up to its obligations to protect and enforce copyrights and trademarks on an enormous range of produtions, ranging from consumer electronics and software to books, music CDs, and Hollywood films. The U.S. launched the dispute with the WTO in 2007 after China failed to crack down on blatant copies and rip-offs of U.S. products widely available in Chinese cities and marketplaces. The International Intellectual Property Alliance, a collection of U.S. media concerns, placed the value of sales lost due to piracy at almost $4 billion a year.

“[The] WTO panel found that a number of deficiencies in China’s IPR (Intellectual Property Rights) regime are incompatible with its WTO obligations,” said acting U.S. Trade Representative Peter Allgeier, in a statement “We will engage vigorously with China on appropriate corrective actions to ensure that U.S. rights holders obtain the benefits of this decision.”

In recent years, China has not performed copyright protection for any media which has not been approved for sale by China’s censorship regime: so, if a movie isn’t approved for distribution in China, it doesn’t receive any copyright protection. China regularly blocks distribution of many mainstream Western movies, books, and music releases. The WTO also ruled that China violated WTO rules by auctioning off pirated good seized by Chinese authorities.

The WTO panel did not agree with the United States’ argument that pirates and counterfeiters in China have no fear of prosecution because the the requirements to bring a case before Chinese courts is too high.

Both China and the United States have the option of appealing the WTO’s decision.