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






108th CONGRESS
  2d Session
H. RES. 576

Urging the Government of the People's Republic of China to improve its 
  protection of intellectual property rights, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 24, 2004

   Ms. Watson (for herself, Mr. Lantos, and Mr. Hyde) submitted the 
     following resolution; which was referred to the Committee on 
                        International Relations

_______________________________________________________________________

                               RESOLUTION


 
Urging the Government of the People's Republic of China to improve its 
  protection of intellectual property rights, and for other purposes.

Whereas on December 11, 2001, the People's Republic of China acceded to the 
        World Trade Organization (WTO) and agreed to implement a set of sweeping 
        reforms designed to protect intellectual property rights under the terms 
        of its accession;
Whereas the accession by China to the WTO included the adoption by China of the 
        Agreement on Trade-Related Aspects of Intellectual Property Rights 
        (TRIPS Agreement), which establishes minimum standards for intellectual 
        property rights to be provided by each WTO member and certain general 
        principles applicable to all intellectual property rights enforcement 
        procedures;
Whereas following its accession to the WTO and adoption of the TRIPS Agreement, 
        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 more than 60 percent of all goods imported into the United States that 
        infringe intellectual property rights and are seized by the Bureau of 
        Customs and Border Protection of the Department of Homeland Security 
        originate in China;
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, according to the United States Trade Representative, 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;
Whereas in the United States Trade Representative's ``Special 301'' Report for 
        2003, the implementation by China of the 1995 bilateral agreement with 
        the United States on the protection of intellectual property rights is 
        subject to monitoring under section 306 of the Trade Act of 1974 (19 
        U.S.C. 2416); and
Whereas the United States Trade Representative is currently preparing the 
        ``Special 301'' Report for 2004, to be made public on April 30, 2004: 
        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 established by the World Trade 
        Organization (WTO);
            (2) recognizes, despite the steps referred to in paragraph 
        (1), the continuing existence of widespread intellectual 
        property rights violations in China and encourages the Chinese 
        Government to take further and immediate steps to improve 
        enforcement of such rights;
            (3) urges the Chinese Government to undertake a coordinated 
        nationwide intellectual property rights enforcement campaign, 
        to 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 pursuit 
        counterfeiting and piracy cases;
            (4) recommends that the Chinese Government implement more 
        effective customs and border measures to prevent the massive 
        exportation of pirated goods into the United States and other 
        countries;
            (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;
            (7) calls upon the Chinese Government to promptly accede to 
        the 1996 World Intellectual property Organization (WIPO) 
        Internet-related treaties and harmonize its regulations and 
        implementing rules with the treaties fully; and
            (8) will continue to monitor closely and work with the 
        Administration to encourage China's efforts to bring its 
        framework of laws, regulations and implementing rules into 
        compliance with the Agreement on Trade-Related Aspects of 
        Intellectual Property Rights (TRIPS Agreement) and to create 
        and maintain effective intellectual property rights enforcement 
        mechanisms capable of deterring counterfeiting and piracy 
        activities.
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