273. The representative of the United States expressed her appreciation of China's answers to Members' questions. China deserved recognition for the extensive IPR-related legislative changes it had made at the time of accession. The United States also appreciated China's efforts to improve its IPR enforcement and protection environment, including the growth of China's Trademark Office and Patent Office and the increasing dockets of the Chinese courts and enforcement agencies. Under the leadership of Vice Premier Wu Yi, China had committed to address a number of problems in its IPR regime and to significantly reduce IPR infringement levels. She said that China had announced various action plans in this regard, only some of which had been made publicly available to date. The United States was watching China's follow-through on these commitments closely.
274. She said that, as China's own official reports had noted, IPR infringement in China was rampant and the magnitude of IPR infringement in China was harming the interests of right holders not only in China but around the world. China's increasing exports of counterfeit and pirated goods posed dangers to consumers throughout the developed and developing world. In light of China's obligations under the TRIPS Agreement to provide adequate and effective IPR enforcement, the United States noted a number of continuing problems. Administrative enforcement was weak. Administrative enforcement processes typically afforded no meaningful relief to right holders: fines were non-deterrent; the decision-making process was not transparent; and too few administrative cases were referred to criminal prosecution. As an example of this problem, she said that while new border measures implemented earlier this year had provided for some improvements, they had significantly reduced the level of customs penalties from 300% to 30% of value. China's civil, administrative and criminal enforcement systems continued to suffer from local protectionism. She said that structural changes, such as providing an immediate right of appeal to non-local courts or agencies, requiring mandatory penalties, and instituting mandatory sentencing practices would help address these problems. Institutional challenges remained. Although China had created an expert civil IPR court, its criminal and administrative courts lacked the same level of expertise in IPR matters.
275. In addition, she said, the United States had serious concerns about certain aspects of China's IPR legal framework, although China had done much legislative work at the time of its WTO accession. In particular, China's Criminal Law raised serious TRIPS issues by requiring a showing of profits for certain types of offences; failing to address commercial-scale trafficking of infringing goods; and criminalizing counterfeiting only when the infringing mark was "identical" rather than confusingly similar. She said that the United States appreciated China's commitment to issue a judicial interpretation by the end of this year to immediately address these issues, and was looking forward to its implementation.
276. However, she said that the United States greatly regretted that China had not released a draft of the long-awaited criminal judicial interpretation for widespread public comment. Both the US Government and right holders had waited anxiously for the opportunity to comment on the draft prior to its final promulgation. Last year at the TRIPS Council, China had pledged to increase transparency by making judicial interpretations on IPR matters available for public comment. While the United States was pleased with the positive trend in this regard and noted the release during the present week of three draft civil IPR-related judicial interpretations for public comment, nevertheless the drafting of this critical criminal judicial interpretation had been opaque with the draft being disclosed only to selected entities and industry associations.
277. She said that the United States appreciated that China had committed in the near term to address some of the problems highlighted above and looked forward to real results from China's efforts. The coming months would be a critical period, particularly in the light of the issuance and implementation of the judicial interpretation and implementation of the IPR action plans. The United States looked forward to continuing efforts on issues that remained of concern to both countries as well as to other Members, with a view towards improving the overall IPR enforcement environment in China.
278. With respect to the specific answers provided by the Chinese delegation, she said that the United States appreciated very much the information provided on administrative enforcement cases. As a matter of clarification, she requested the Chinese delegation to confirm that, under Chinese law, there was no obligation requiring administrative decisions in IPR cases to be issued in writing.
