[Federal Register Volume 72, Number 77 (Monday, April 23, 2007)]
[Notices]
[Pages 20144-20146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7612]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/DS-362]


WTO Dispute Settlement Proceeding Regarding China--Measures 
Affecting the Protection and Enforcement of Intellectual Property 
Rights

AGENCY: Office of the United States Trade Representative.

ACTION: Notice; request for comments.

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SUMMARY: The Office of the United States Trade Representative (USTR) is 
providing notice that on April 10, 2007, in accordance with the 
Marrakesh Agreement Establishing the World Trade Organization (WTO 
Agreement), the United States requested consultations with respect to 
certain measures pertaining to the protection and enforcement of 
intellectual property rights in China. That request may be found at 
http://www.wto.org contained in a document designated as WT/DS362/1. 
USTR invites written comments from the public concerning the issues 
raised in this dispute.

DATES: Although USTR will accept any comments received during the 
course of the consultations, comments should be submitted on or before 
May 7, 2007 to be assured of timely consideration by USTR.

ADDRESSES: Comments should be submitted (i) Electronically, to 
[email protected], with ``China IPR Protection and Enforcement 
(DS362)'' in the subject line, or (ii) by fax, to Sandy McKinzy at 
(202) 395-3640, with a confirmation copy sent electronically to the 
electronic mail address above, in accordance with the requirements for 
submission set out below.

FOR FURTHER INFORMATION CONTACT: Steven F. Fabry, Associate General 
Counsel, Office of the United States Trade Representative, 600 17th 
Street, NW., Washington, DC, (202) 395-3150.

SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round 
Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and 
opportunity for comment be provided after the United States submits or 
receives a request for the establishment of a WTO dispute settlement 
panel. In an effort to provide additional opportunity for comment, USTR 
is providing notice that consultations have been requested pursuant to 
the WTO Understanding on Rules and Procedures Governing the Settlement 
of Disputes (``DSU''). If such consultations should fail to resolve the 
matter and a dispute settlement panel is established pursuant to the 
DSU, such panel, which would

[[Page 20145]]

hold its meetings in Geneva, Switzerland, would be expected to issue a 
report on its findings and recommendations within nine months after it 
is established.

Major Issues Raised by the United States

    On April 10, 2007, the United States requested consultations with 
China with respect to certain measures pertaining to the protection and 
enforcement of intellectual property rights in China.
    The first matter on which the United States has requested 
consultations concerns 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. In this regard, the 
measures at issue include the following, as well as any amendments and 
related or implementing measures: the Criminal Law of the People's 
Republic of China, in particular Articles 213, 214, 215, 217, 218, and 
220; and two interpretations by the Supreme People's Court and the 
Supreme People's Procuratorate on several issues of concrete 
application of law in handling criminal cases of infringing 
intellectual property (one adopted on November 2, 2004, and the other 
adopted on April 4, 2007). It appears that, because of these measures, 
certain acts of trademark counterfeiting and copyright piracy occurring 
on a commercial scale in China are not subject to criminal procedures 
and penalties in China. These measure appear to USTR to be inconsistent 
with China's obligations under Articles 41.1 and 61 of the Agreement on 
Trade-Related Aspects of Intellectual Property Rights (``TRIPS 
Agreement'').
    The second matter on which the United States has requested 
consultations concerns 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. 
In this regard, the measures at issue include the following, as well as 
any amendments and related or implementing measures: the Regulations of 
the People's Republic of China for Customs Protection of Intellectual 
Property Rights, in particular Chapter 4 thereof, and the Implementing 
Measures of Customs of the People's Republic of China for the 
Regulations of the People's Republic of China on Customs Protection of 
Intellectual Property Rights, in particular Chapter 5 thereof. It 
appears that, because of these measures, the customs authorities often 
appear to be required to give priority to options for disposal of goods 
that infringe intellectual property rights that would allow such goods 
to enter the channels of commerce (for instance, through auctioning the 
goods after removing their infringing features). The requirement that 
infringing goods be released into the channels of commerce under the 
circumstances set forth in the measures at issue appears to USTR to be 
inconsistent with China's obligations under Articles 46 and 59 of the 
TRIPS Agreement.
    The third matter on which the United States has requested 
consultations concerns 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. For example, it appears that 
works that are required to undergo censorship review (or other forms of 
pre-publication or pre-distribution review) before entering the Chinese 
market are not protected by copyright before the review is complete and 
publication and distribution within China has been authorized. In this 
regard, the measures at issue include the following, as well as any 
amendments and related or implementing measures:
     The Copyright Law, in particular Article 4;
     The Criminal Law, the Regulations on the Administration of 
Publishing Industry, the Regulations on the Administration of 
Broadcasting, the Regulations on the Administration of Audiovisual 
Products, the Regulations on the Administration of films, and the 
Regulations on the Administration of Telecommunication;
     The Administrative Regulations on Audiovisual Products;
     The Administrative Regulation on Publishing;
     The Administrative Regulations on Electronic Publications;
     The Measures for the Administration of Import of Audio and 
Video Products;
     The Procedures for Examination and Approval for Publishing 
Finished Electronic Publication Items Licensed by a Foreign Copyright 
Owner;
     The Procedures for Examination and Approval of Importation 
of Finished Electronic Publication Items by Electronic Publication 
Importation Entities;
     The Procedures for Recording of Imported Publications;
     The Interim Regulations on Internet Culture 
Administration; and
     The Several Opinions on the Development and Regulation of 
Network Music.
    It appears that, because of the Copyright Law, 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 for the Protection of Literary and Artistic Works 
(1971) (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 USTR to be 
inconsistent with China's obligations under Articles 9.1 and 41.1 of 
the TRIPS Agreement. Furthermore, to the extent that the Copyright Law 
also denies the protection of certain rights to performers and 
producers of sound recordings during the period of any pre-publication 
or pre-distribution prohibition, the Copyright Law appears to be 
inconsistent with China's obligations under Articles 14 and 41.1 of the 
TRIPS Agreement.
    In addition, it appears that the measures at issue provide 
different pre-distribution and pre-authorization review processes for 
Chinese nationals' works, performances (or their fixations) and sound 
recordings than for foreign nationals' works, performances (or their 
fixations) and sound recordings. To the extent that these different 
processes, taken together with Article 4 of the Copyright Law, 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 than for foreign authors' works, foreign performers' 
performances (or their fixations) and foreign producers' sound 
recordings, the measures at issue appear to be inconsistent with 
China's obligations under TRIPS Agreement Articles 3.1, 9.1 and 41.1.
    The fourth matter on which the United States has requested 
consultations concerns the scope of coverage of criminal procedures and 
penalties for unauthorized reproduction or unauthorized distribution of 
copyrighted works. In particular, it appears that unauthorized 
reproduction of copyrighted works by itself--that is, unauthorized 
reproduction that is not accompanied by unauthorized

[[Page 20146]]

distribution--may not be subject to criminal procedures and penalties. 
Likewise, it appears that unauthorized distribution of copyrighted 
works by itself--that is, unauthorized distribution that is not 
accompanied by unauthorized reproduction--may not be subject to 
criminal procedures and penalties. In this regard, the measures at 
issue include the Criminal Law, in particular Article 217, as well as 
any amendments, related measures, or implementing measures. To the 
extent that wilful 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 
USTR to be inconsistent with China's obligations under Articles 41.1 
and 61 of the TRIPS Agreement.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Comments should be 
submitted (I) Electronically, to [email protected], with ``China IPR 
Protection and Enforcement (DS362)'' in the subject line, or (ii) by 
fax, to Sandy McKinzy at (202) 395-3640, with a confirmation copy sent 
electronically to the electronic mail address above.
    USTR encourages the submission of documents in Adobe PDF format as 
attachments to an electronic mail. Interested persons who make 
submissions by electronic mail should not provide separate cover 
letters; information that might appear in a cover letter should be 
included in the submission itself. Similarly, to the extent possible, 
any attachments to the submission should be included in the same file 
as the submission itself, and not as separate files.
    Comments must be in English. A person requesting that information 
contained in a comment submitted by that person be treated as 
confidential business information must certify that such information is 
business confidential and would not customarily be released to the 
public by the commenter. Confidential business information must be 
clearly designated as such and ``BUSINESS CONFIDENTIAL'' must be marked 
at the top and bottom of the cover page and each succeeding page. 
Persons who submit confidential business information are encouraged 
also to provide a non-confidential summary of the information.
    Information or advice contained in a comment submitted, other than 
business confidential information, may be determined by USTR to be 
confidential in accordance with section 135(g)(2) of the Trade Act of 
1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information 
or advice may qualify as such, the submitter--
    (1) Must clearly so designate the information or advice;
    (2) Must clearly mark the material as ``SUBMITTED IN CONFIDENCE'' 
at the top and bottom of the cover page and each succeeding page; and
    (3) Is encouraged to provide a non-confidential summary of the 
information or advice.
    Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR 
will maintain a file on this dispute settlement proceeding, accessible 
to the public, in the USTR Reading Room, which is located at 1724 F 
Street, NW., Washington, DC 20508. The public file will include non-
confidential comments received by USTR from the public with respect to 
the dispute; if a dispute settlement panel is convened or in the event 
of an appeal from such a panel, the U.S. submissions; the submissions, 
or non-confidential summaries of submissions, received from other 
participants in the dispute; the report of the panel; and, if 
applicable, the report of the Appellate Body. The USTR Reading Room is 
open to the public, by appointment only, from 10:00 a.m. to noon and 1 
p.m. to 4 p.m., Monday through Friday. An appointment to review the 
public file (Docket WTO/DS-362, China IPR Protection and Enforcement 
Dispute) may be made by calling the USTR Reading Room at (202) 395-
6186.

Daniel Brinza,
Assistant United States Trade Representative for Monitoring and 
Enforcement.
 [FR Doc. E7-7612 Filed 4-20-07; 8:45 am]
BILLING CODE 3190-W7-P