[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 576 Engrossed in House (EH)]


                 In the House of Representatives, U.S.,

                                                         July 14, 2004.
Whereas in 2001, the People's Republic of China agreed to implement a set of 
        sweeping reforms designed to protect intellectual property rights;
Whereas since 2001, China initiated a series of measures and a comprehensive 
        review of its intellectual property rights laws to bring itself in 
        compliance with international standards in patent, trademark, copyright, 
        trade secret, and other intellectual property laws;
Whereas central and local Chinese Government officials continue to work with 
        their counterparts in the United States to improve China's intellectual 
        property rights enforcement through regular bilateral discussions, 
        roundtable meetings, and numerous technical assistance programs;
Whereas China has initiated campaigns to seize illegal and pirated goods, closed 
        or fined several assembly operations for illegal production lines, 
        seized millions of illegal audio-visual products, and expanded training 
        of law enforcement officials relating to intellectual property rights 
        protection;
Whereas although China has made significant improvements to its framework of 
        law, regulations, rules, and judicial interpretations regarding 
        intellectual property rights, its intellectual property rights 
        enforcement mechanisms still face major obstacles, which have resulted 
        in continued widespread piracy and counterfeiting of film, recorded 
        music, published products, software products, pharmaceuticals, chemical 
        products, information technology products, consumer goods, electrical 
        equipment, automobiles and automotive parts, industrial products, and 
        research results throughout China;
Whereas such widespread piracy and counterfeiting in China harms not only the 
        economic development of China but also the economic and legal interests 
        of United States business enterprises that sell their products or 
        services in China, whether or not these United States business 
        enterprises have invested in China or ever will invest in China;
Whereas United States losses due to the piracy of copyrighted materials in China 
        is estimated to exceed $1,800,000,000 annually and counterfeited 
        products to account for 15 to 20 percent of all products made in China, 
        approximately 8 percent of the country's gross national product;
Whereas the market value of counterfeit goods in China is between 
        $19,000,000,000 and $24,000,000,000 annually, causing enormous losses 
        for intellectual property rights holders worldwide;
Whereas the export of pirated or counterfeit goods from China to third country 
        markets causes economic losses to United States and other foreign 
        producers of patented, trademarked, and copyrighted products competing 
        for market share in those third country markets;
Whereas current criminal laws and enforcement mechanisms for intellectual 
        property rights in China by administrative authorities, criminal 
        prosecutions, and civil actions for monetary damages have not 
        effectively addressed widespread counterfeiting and piracy;
Whereas administrative authorities in China rarely forward an administrative 
        case relating to intellectual property rights violations to the 
        appropriate criminal justice authorities for criminal investigation and 
        prosecution;
Whereas China currently has high criminal liability thresholds for infringements 
        of intellectual property rights, with an unreasonable proof-of-sale 
        requirement totaling approximately $24,100 for business enterprises and 
        $6,030 for individuals (according to current exchange rates) that makes 
        criminal prosecution against those enterprises or individuals that 
        violate intellectual property rights extremely difficult;
Whereas seizures and fines imposed by Chinese authorities for intellectual 
        property rights violations are perceived by the violators to be a cost 
        of doing business and such violators are usually able to resume their 
        operations without much difficulty;
Whereas China has the second largest number of Internet users in the world, it 
        still has not acceded to the 1996 World Intellectual Property 
        Organization (WIPO) Internet-related treaties that reflect international 
        norms for providing copyright protection over the Internet;
Whereas China's market access barriers for United States and other foreign 
        cultural products such as movies, music, and books stops or slows the 
        legal entry of these legitimate products into China, in turn increasing 
        the demand for pirated products; and
Whereas United States Trade Representative, Ambassador Zoellick, and Secretary 
        of Commerce Evans co-chaired an expanded Joint Commission on Commerce 
        and Trade Meeting during Chinese Vice Premier Wu Yi's visit to the 
        United States in April 2004 that led to the Chinese Government's 
        commitment to an action plan to address the piracy and counterfeiting of 
        American ideas and innovations: Now, therefore, be it
    Resolved, That the House of Representatives--
            (1) commends the Government of the People's Republic of China for 
        the steps it has taken to improve its legal framework for intellectual 
        property rights protection and for efforts to bring itself toward 
        compliance with international standards for intellectual property 
        rights;
            (2) recognizes Chinese Government's renewed commitment through an 
        action plan presented at the 2004 United States-China Joint Commission 
        on Commerce and Trade to significantly reduce intellectual property 
        rights infringement levels by increasing penalties for intellectual 
        property rights violations, cracking down on violators, improving 
        protection of electronic data, and launching a national campaign to 
        educate its citizens about the importance of intellectual property 
        rights protection;
            (3) further recognizes, despite the steps referred to in paragraph 
        (1) and paragraph (2), the continued existence of widespread 
        intellectual property rights violations in China;
            (4) urges the Chinese Government to closely adhere to its action 
        plan referred to in paragraph (2) in undertaking a coordinated 
        nationwide intellectual property rights enforcement campaign, and to 
        further eliminate the high criminal liability threshold and procedural 
        obstacles that impede the effective use of criminal prosecution in 
        addressing intellectual property rights violations, to increase the 
        criminal penalties provided for in its laws and regulations, and to 
        vigorously pursue counterfeiting and piracy cases;
            (5) encourages the Chinese Government to fully and comprehensively 
        implement a legal framework and effective enforcement mechanisms that 
        would protect not only intellectual property rights held by United 
        States and foreign business enterprises with or without investments in 
        China, but also Chinese intellectual property rights holders, which is 
        crucial to China's own economic development and technological 
        advancement;
            (6) urges the Chinese Government to give greater market access to 
        the foreign producers of legitimate products such as films and other 
        audio-visual products in order to reduce demand for and prevalence of 
        pirated and counterfeit goods in their absence; and
            (7) will continue to monitor closely China's commitment and 
        adherence to its action plan on intellectual property protection 
        presented during the 2004 United States-China Joint Commission on 
        Commerce and Trade, and work with the Administration to further 
        encourage China's efforts to bring its framework of laws, regulations, 
        and implementing rules into compliance with international law and to 
        create and maintain effective intellectual property rights enforcement 
        mechanisms capable of deterring counterfeiting and piracy activities.
            Attest:

                                                                          Clerk.