Voluntary Report - public distribution

**Date:** 5/6/2005

**GAIN Report Number:** CH5035

CH5035

**China, Peoples Republic of**

**Agricultural Situation**

**Protecting U.S. Food and Ag. Intellectual Property Rights in China**

**2005**

**Approved by:**

![](media/image1.wmf)Maurice W. House

U.S. Embassy Beijing

**Prepared by:**

Adam Branson, Casey E. Bean, and Mark Cohen

**Report Highlights:**

Though China has strengthened its legal framework and enforcement of
intellectual property rights (IPR), serious infringements continue to
occur on U.S. food and agricultural products. This report provides
information and suggestions on IPR protection for U.S. food and
agricultural exporters and trade associations.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Numerous IPR Problems for U.S. Food and Agricultural Products
3](#numerous-ipr-problems-for-u.s.-food-and-agricultural-products)

[China's State Council IPR White Paper---Efforts to Improve the System
3](#chinas-state-council-ipr-white-paperefforts-to-improve-the-system)

[U.S. Embassy China's "IPR Toolkit" and Initiatives
3](#u.s.-embassy-chinas-ipr-toolkit-and-initiatives)

[FAS China Suggestions 4](#fas-china-suggestions)

# Executive Summary

Though China strengthened its legal framework and amended its
intellectual property rights (IPR) laws and regulations to comply with
its WTO Agreements, IPR infringements of U.S. agriculture and food
products remain a serious problem. In this report FAS China offers ways
to strengthen protection of U.S. patents, trademarks, copyrights, plant
varieties, geographical indicators, food labels, and other IPR in China
and third-country markets. Additionally, interested parties are strongly
encouraged to review the U.S. Embassy's "China IPR toolkit," mentioned
below, and FAS Beijing's on-line reports
(http://www.fas.usda.gov/scriptsw/AttacheRep/default.asp) CH2049,
containing information on China's patent, trademark, and copyright
legislation and enforcement and CH4059, on plant variety protection.

# Numerous IPR Problems for U.S. Food and Agricultural Products

According to trade contacts, USDA agricultural Cooperator organizations,
and private food companies, IPR problems remain a serious problem in
China. Examples include:

\- "Stickering" and labeling domestic and third-country product with
U.S. identifications such as Washington Apples, California Table Grapes,
California Pistachios, U.S. Wheat Flour, etc.

\- False branding and packaging of domestic and third-country product
with U.S. identification such as Sunkist citrus, Sunmaid raisins, U.S.
wines, and even U.S. grass seed brands

\- Counterfeiting or mixing of domestic or third country product
together with U.S. food and beverages including poultry, beef, pork,
mohair or wool

\- Unauthorized sale and use of U.S. PVP protected plant materials and
germplasm

# China's State Council IPR White Paper---Efforts to Improve the System

The State Council, the highest level of government power and
administrative office in China, recently published "New Progress in
China's Protection of Intellectual Property Rights," a white paper on
China's efforts at protecting IPR, on April 21, 2005. The entire report
is available on the Embassy of the People's Republic of China in
Washington, D.C. web page:

http://www.china-embassy.org/eng/gyzg/t192663.htm

This white paper summarizes the current status of China's IPR
legislation, filings, and enforcement. Various IPR agencies, including
provincial or local authorities also publish reports, many of which are
only available in the Chinese language.

# U.S. Embassy China's "IPR Toolkit" and Initiatives

Recognizing the large number of complaints from U.S. manufacturers and
traders regarding IPR protection in China, and with the aim of helping
China develop an IPR system more similar to the United States, the U.S.
Embassy in Beijing developed a website-based "IPR Toolkit". The website
is located at the following address and provides volumes of information
on Chinese laws and regulations along with steps and suggestions on how
to protect American IPR, find agents and lawyers to help in IPR
safeguarding, and courses of action to pursue when IPR infringement
occurs:

http://www.usembassy-china.org.cn/ipr/

The U.S. Embassy also sponsors an annual Ambassador's IPR roundtable in
which representatives of all key industrial sectors, including the
agricultural sector, attend to discuss problems and strategies,
frequently with high level Chinese officials in attendance. In addition,
the Embassy has an IPR "action plan" affecting all sectors of the
Embassy and has two full time officials stationed at the Embassy, an IPR
Attaché on detail from the U.S. Patent and Trademark Office and a
Foreign Service officer from the State Department. IPR issues are also
raised through a joint IPR Working Group under the U.S. China Joint
Commission on Commerce and Trade, while specific IPR business complaints
may also be raised bilaterally through the International Trade
Administration of the U.S. Department of Commerce, Office of China
Economic Area.

# FAS China Suggestions

The U.S. industry needs to play an active role to protect food product
IPR's---initially identifying that problems exist in the first place.
Ideally, IPR protection should begin prior to when companies or trade
associations begin exploring the China market for their food or beverage
goods. Interested parties should also recognize the importance of
registering and protecting trademarks in both English and Chinese
languages, including obtaining collective marks for U.S. collective
organizations and USDA Cooperators or certification marks. China's State
Administration for Industry and Commerce, which is involved in enforcing
trademarks, has announced that it will be conducting a special campaign
to improve enforcement of agricultural related trademarks in the autumn
of 2005.

Furthermore, it is essential to recognize that even if U.S. goods are
not being sold in China, IPR protection could be helpful to prevent
infringed-upon goods produced in China from being exported to third
country markets. Chinese Customs provides an on-line recordal service
that is usually a prerequisite for Customs detention of infringing goods
bound for export.

Thirdly, joint processing agreements need to be evaluated for risks of
loss of intellectual property protection, including ownership of marks,
patent rights, and trade secrets. Introducing high-end processing
techniques without considering the threat or risk to intellectual
property is not recommended.

(End of report)