45. The representative of Japan said that his delegation appreciated China's efforts to address intellectual property problems through various measures including the development of new laws, but that counterfeiting and piracy remained a significant problem.
Counterfeiting and Piracy
46. As a large number of Japanese companies continued to face counterfeit and piracy problems in China he hoped that the Chinese Government would make further efforts to enhance intellectual property rights protection and to provide effective enforcement against any act of infringement of IPRs in China. His delegation was particularly concerned with three issues: first, the disposal by administrative authorities of counterfeiting goods outside the channel of commerce did not work in an effective manner (IP/C/W/556: paragraph 4). Second, the possibility of a judicial authority ordering a party to produce evidence, that was prescribed by Article 43.1 of the TRIPS Agreement, was not used in an appropriate manner (IP/C/W/556: paragraph 3). Lastly, thresholds for the criminal prosecution of counterfeiting cases were not applied in an effective manner, especially in cases where an infringer kept the amount in question below a legal threshold for criminal enforcement by destroying the evidence (IP/C/W/556: paragraph 5).
Technology Transfer Contracts
47. He said that a further concern related to China's Regulation on the Administration of Import and Export of Technology was the discriminatory nature of clauses for Chinese and foreign licensors (IP/C/W/556: paragraph 7) and discretionary restrictions applied by administrative officers to royalty provisions in contracts (IP/C/W/556: paragraph 8). His delegation believed that these measures were contrary to the principle of freedom to license by intellectual property right holders.
Government Procurement
48. His delegation further maintained a continued interested in the National Indigenous Innovation Product Accreditation System and its relation to government procurement, and was looking forward to receiving any revised version of that System (IP/C/W/556: paragraph 11).
