WORLD TRADE  
ORGANIZATION  WT/DS362/7 
21 August 2007 
 (07-3501) 
 Original:   English 
  
 
CHINA - MEASURES AFFECTING THE PROTECTION AND ENFORCEMENT 
OF INTELLECTUAL PROPERTY RIGHTS 
 
Request for the Establishment of  a Panel by the United States
 
 
 
 The following communication, dated 13 August 2007, from the delegation of the United States to the Chairman of the Dispute Settlement  Body, is circulated pursuant to Article 6.2 of 
the DSU.  
_______________ 
 
  On 10 April 2007, the United States requested consultations with the Government of the 
People's Republic of China pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (" DSU") and Article 64 of the Agreement on Trade-
Related Aspects of Intellectual Property Rights ("TR IPS Agreement") (to the extent that Article 64 
corresponds to Article XXII of the General Agreemen t on Tariffs and Trade 1994) with respect to 
certain measures pertaining to the protection and en forcement of intellectual property rights in China.
1  
The United States held consultations with China on 7-8 June 2007.  Those consultations provided 
some helpful clarifications but unfortunately did not resolve the dispute. 
I. Thresholds for criminal procedures and penalties 
 The United States considers that China has not provided for criminal procedures and penalties 
to be applied in cases of willful trademark counterfeiting or copyright piracy on a commercial scale that fail to meet certain thresholds.  China h as established these thresholds through the following 
measures:   
(1) the Criminal Law of the People's Republic of  China (adopted at the Second Session of the 
Fifth National People's Congress on 1 July 1979 a nd revised at the Fifth Session of the Eighth 
National People's Congress on 14 March 1997) ("Cr iminal Law"), in particular Articles 213, 
214, 215, 217, 218, and 220;  
(2) the Interpretation by the Supreme People's C ourt and the Supreme People's Procuratorate on 
Several Issues of Concrete Application of Law in Handling Criminal Cases of Infringing 
Intellectual Property (adopted at the 1331
st Session of the Judicial Committee of the Supreme 
People's Court on 2 November 2004 and the 28th Session of the Tenth Procuratorial 
Committee of the Supreme People's Procurator ate on 11 November 2004 and to be effective 
as of 22 December 2004) ("the December 2004 Judicial Interpretation");  and  
(3) the Interpretation by the Supreme People's C ourt and the Supreme People's Procuratorate on 
Several Issues of Concrete Application of Law in Handling Criminal Cases of Infringing 
                                                      
1 WT/DS362/1. WT/DS362/7 
Page 2  
 
  Intellectual Property (II) (adopted on 4 April 2007, at the 1422
nd Session of the Judicial 
Committee of the Supreme People's Court and the 75th Session of the Tenth Procuratorial 
Committee of the Supreme People's Procuratorate, and to be effective on 5 April 2007) ("the April 2007 Judicial Interpretation"); 
as well as any amendments, related measures,
2 or implementing measures. 
 
Articles 213, 214, and 215 of the Criminal Law describe certain acts of trademark 
counterfeiting that may be subject to criminal pr ocedures and penalties.  However, under Article 213, 
criminal procedures and penalties are available only "if the circumstances are serious" or "if the circumstances are especi ally serious."  Under Article 214, criminal procedures and penalties are 
available only "if the amount of sales [of commoditi es bearing counterfeit registered trademarks] is 
relatively large" or "if the amount of sales is huge ."  Under Article 215, criminal procedures and 
penalties are available only "if the circumstances ar e serious" or "if the circumstances are especially 
serious."  
Articles 217 and 218 of the Criminal  Law describe certain acts of copyright piracy that may 
be subject to criminal procedur es and penalties.  However, under Ar ticle 217, criminal procedures and 
penalties are available only "if the amount of illegal ga ins is relatively large, or if there are other 
serious circumstances" or "if the amount of illegal gains is huge or if there are other especially serious circumstances."  Under Article 218, criminal pr ocedures and penalties are available only "if the 
amount of illegal gains is huge." 
 
Article 220 of the Criminal Law provides for the availability of procedures and penalties 
when the crimes described in Articles 213 through 219 are committed by a "unit," as opposed to by 
natural persons. 
 
The Criminal Law does not contain definitions for the thresholds "serious," "especially 
serious," "relatively large," and "huge" as used in  the above-referenced articles.  However, the 
December 2004 Judicial Interpretation and the Ap ril 2007 Judicial Interpretation do contain such 
definitions, which use thresholds that are stated  as minimum "illegal business volumes" (stated in 
terms of minimum values of products produced, stor ed, transported or sold), minimum "illegal gains", 
or minimum numbers of "illegal copies". 
 
Acts of trademark counterfeiting and copyright piracy that fail to meet the statutory and 
judicial interpretation thresholds described above thus are not subject to Articles 213, 214, 215, 217, 
218, and 220 of the Criminal Law.    
Consequently, it appears that, as a result of the thresholds described above, there are cases of 
willful trademark counterfeiting and copyright pir acy on a commercial scale in which China has not 
provided for criminal procedures and penalties to be a pplied.  It also appears that, as a result of the 
thresholds described above, there are cases of willf ul trademark counterfeiting and copyright piracy 
on a commercial scale for which the remedies of im prisonment and/or monetary fine sufficient to 
provide a deterrent are not available in China.  Furthermore, it appears that, as a result of the 
thresholds described above, China fa ils to ensure that enforcement pr ocedures as specified in Part III 
of the TRIPS Agreement are available under its law so  as to permit effective action against any act of 
willful trademark counterfeiting or copyright piracy on a commercial scale.  
                                                     
 
2 Such other related measures include the Explanation on Certain Questions Related to the Concrete 
Application of Law in Hearing Cases of Crimes of Illegal Publication, Fa Se (1998) No. 30 (adopted by the 
Adjudication Committee of the Supr eme People's Court at its 1032nd meeting on 11 December 1998, effective as 
of 23 December 1998) and the Prosecu tion Guidelines for Criminal Case s Jointly Issued by the Supreme 
People's Procuratorate and the Ministry of Public Safety (18 April 2001).  WT/DS362/7 
 Page 3 
 
 
  China's measures thus appear to be inconsiste nt with China's obligations under Articles 61 
and 41.1 of the TRIPS Agreement.  
II. Disposal of goods confiscated by Customs Authorities that infringe Intellectual Property 
Rights 
The United States considers that China's meas ures for disposing of confiscated goods that 
infringe intellectual property rights appear to be  inconsistent with Chin a's obligations under the 
TRIPS Agreement.  In this regard, the measures at issue are:  (1) the Regulations of the People's Republic of China for Customs Protection of Intellectual 
Property Rights (adopted at the 30
th Ordinary Meeting of the State Council on 
26 November 2003, published by the State Council on 2 December 2003, and effective from 1 March 2004) ("Customs IPR Regulations") , in particular Chapter 4 thereof;  
 (2) the Implementing Measures of Customs of the Pe ople's Republic of China for the Regulations 
of the People's Republic of China on Custom s Protection of Intellectual Property Rights 
(adopted at an Administration Affairs Meeting of the General Administration of Customs on 22 April 2004, issued by the General Administration of Customs with Order No. 114 on 25 May 2004, and effective from 1 July 2004) ("Customs IPR Implementing Measures"), in particular Chapter 5 thereof;  and 
 
(3) General Administration of Customs Announcement No. 16 (2 April 2007); 
 as well as any amendments, related measures,
3 or implementing measures. 
 
Article 27 of the Customs IPR Regulations a nd Article 30 of the Customs IPR Implementing 
Measures set forth a hierarchy of requirements for the disposal of goods that infringe intellectual 
property rights and that are confiscated by Chinese customs authorities.  Under that hierarchy, the 
Chinese customs authorities are required to give prior ity to disposal options that allow such goods to 
enter the channels of commerc e (for instance, through auctioning the goods after removing their 
infringing features).  Only if the infringing features cannot be removed must the goods be destroyed.  
The release of infringing goods into the channe ls of commerce under the circumstances set 
forth in the measures at issue appears not to constit ute destruction or disposal of infringing goods in 
accordance with the principles set out in Article 46 of the TRIPS Agreement.  Consequently, the 
requirement in the measures at i ssue that Chinese customs authorities release infringing goods into the 
channels of commerce under the circumstances set forth in those measures appears to mean that 
Chinese customs authorities lack the authority to or der destruction or disposal of infringing goods in 
accordance with the principles set out in Article 46 of the TRIPS Agreement.  The measures at issue 
therefore appear to be inconsistent with China's obligations under Article 59 of the TRIPS Agreement. 
 
III. Denial of copyright and related rights protection and enforcement to works that have 
not been authorized for publication or distribution within China 
The United States considers that China appears to be acting inconsistently  with its obligations 
under the TRIPS Agreement by denying the protection of its Copyright Law to creative works of authorship (and, to the extent Article 4 of the Copyright Law applies to them, sound recordings and 
                                                     
 
3 Such other related measures include the Law of the People's Republic of China on Administrative 
Penalty (adopted at the Fourth Session of the Eighth National People's Congress on 17 March 1996, promulgated by Order No. 63 of the President of the People's Republic of China on 17 March 1996, and 
effective as of 1 October 1996) and in particular Article 53 thereof. WT/DS362/7 
Page 4  
 
  performances) that have not been authorized for,  or are otherwise prohibited from, publication or 
distribution within China.  In this  regard, the measures at issue are: 
 (1) the Copyright Law,
4 in particular Article 4; 
 
(2) the Criminal Law; the Regulations on the Administration of Publishing Industry; the 
Regulations on the Administration of Broadcasti ng; the Regulations on the Administration of 
Audiovisual Products; the Regulations on the Ad ministration of Films; and the Regulations 
on the Administration of Telecommunication;5 
 
(3) the Regulations on Administration of the Films Industry6; 
 (4) the Administrative Regulations on Audiovisual Products
7; 
 (5) the Administrative Regulation on Publishing
8; 
 
(6) the Administrative Regulations on Electronic Publications9; 
 (7) the Measures for the Administration of Import of Audio and Video Products
10; 
 (8) the Procedures for Examination and Approval for Publishing Finished Electronic Publication 
Items Licensed by a Foreign Copyright Owner
11; 
 (9) the Procedures for Examination and Approva l of Importation of Finished Electronic 
Publication Items by Electronic Publication Importation Entities
12; 
 
(10) the Procedures for Recording of Imported Publications13; 
                                                      
4 Adopted at the 15th Session of the Standing Committee of the Seventh National People's Congress on 
7 September 1990, and amended according to the Decision on the Revision of the Copyright Law of the People's 
Republic of China, adopted at the 24th Session of the Standing Committee of the Ninth National People's Congress on 27 October 2001.  See Main Dedicated Intellectual Property Laws and Regulations Notified under 
Article 63.2 of the Agreement: China , IP/N/1/CHN/C/1, circulated 8 July 2002. 
5 As noted by China in reply to a question in Review of Legislation: China , IP/Q/CHN/1, circulated 10 
December 2002, section V.A.3. 
6 State Council Order No. 342, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
7 State Council Order No. 341, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
8 State Council Order No. 343, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
9 Order No. 11 of the General Admi nistration of Press and Pub lication (30 December 1997). 
10 Decree No. 23 of the Ministry of Culture and the General Administration of Customs 
(17 April 2002). 
11 General Administration of Press and Publication (27 December 2005) (Basis of Establishment:  
Decision on Establishing Administrative Licensing for Items Necessary to be Maintained for Administrative Examination and Approval by the State Council [State Council Order No. 412]). 
12 General Administration of Press and Publication (27 December 2005) (Basis of Establishment:  
Decision on Establishing Administrative Licensing for Items Necessary to be Maintained for Administrative Examination and Approval by the State Council [State Council Order No. 412]). 
13 General Administration of Press and Publication (27 December 2005) (Basis of Establishment: 
Article 45 of the Administration Regulations on Publication [State Council Order No. 343]).  WT/DS362/7 
 Page 5 
 
 
  (11) the Interim Regulations on Internet Culture Administration14; and 
 (12) the Several Opinions on the Developm ent and Regulation of Network Music
15; 
 as well as any amendments, related measures, or implementing measures. 
 
Article 5(1) of the Berne Convention for the Protection of Literary and Artistic Works (1971)  
(the "Berne Convention") provides that foreign aut hors of protected works shall enjoy all the rights 
granted to domestic authors, as well as all the rights specially granted by the Berne Convention.
16  
Moreover, these rights may not be made subject to any formality (Berne Convention Article 5(2)).  
Article 9.1 of the TRIPS Agreement requires all WTO Members, inter alia , to comply with Articles 1 
through 21 of the Berne Convention.17 
 
China's Copyright Law provides the legal basis for copyright protection within China of the 
works of Chinese and foreign authors, and it provides an array of rights to such authors (e.g ., rights of 
reproduction, translation, and adaptation).  In add ition, the Copyright Law provides specific statutory 
protections to performers, producers of sound record ings, and broadcasting or ganizations.  However, 
the first sentence of Article 4 of the Copyright Law provides as follows:  "Works the publication or 
distribution of which is prohibited by law shall not be  protected by this Law."  Therefore, authors of 
works whose publication or distribution in China is  prohibited (such as those works whose publication 
or distribution has not been authorized in China18) appear not to enjoy the protection specially granted 
by the Berne Convention in respect  of those works (and, it appears, 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).  By causing this denial of co pyright protection, Article 4 of the Copyright Law 
appears to be inconsistent with China's obligations  under Article 9.1 of the TRIPS Agreement.  In 
addition, the copyright rights of authors of work s 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.  By subjecting copyrigh t protection to this formality, Article 4 of the 
Copyright Law appears to be inconsistent with China's obligations under Article 9.1 of the TRIPS 
Agreement.  
 In addition, Article 14 of the TRIPS Agre ement requires China to give performers, inter alia , 
the possibility of preventing certain acts, and to  give producers of phonograms (sound recordings) the 
right to authorize or prohibit the direct or indirect  reproduction of their sound r ecordings (collectively, 
the "related rights").  To the extent that Article  4 of the Copyright Law also denies protection of 
related rights with respect to performances (or their fixations) or sound recordings, the publication or 
distribution of which has not been authorized or is otherwise prohibited in China, Article 4 of the 
Copyright Law appears to be inconsistent with China's obligations under Article 14 of the TRIPS 
Agreement.   
Furthermore, it appears that the measures at issue establish different pre-distribution and 
pre-authorization review processes for Chinese nationa ls' works, performances (or their fixations) and 
                                                     
 
14 Promulgated in Order No. 27 of the Ministry of Culture (10 May 2003), amended by Order No. 32 of 
the Ministry of Culture (1 July 2004). 
15 Ministry of Culture (20 November 2006). 
16 The rights specially granted by the Berne Convention include, inter alia , the right of reproduction 
(Berne Convention Article 9(1)), the right of adaptation (Berne Convention Article 12), and the right of translation (Berne Convention Article 8). 
17 However, WTO Members do not have rights or oblig ations under the TRIPS Ag reement in respect of 
the rights conferred under Article 6 bis of the Berne Convention or of the rights derived therefrom. 
18 See, e.g., the Regulations on Administration of the Films Industry, articles 24 and 42, and the 
Administrative Regulations on Electronic Publications, articles 58-59 and 72. WT/DS362/7 
Page 6  
 
  sound recordings than for foreign nationals' wo rks, performances (or their fixations) and sound 
recordings.
19  These different processes, taken together with Article 4 of the Copyright Law, appear to 
result in earlier and otherwise more favorable pr otection and enforcement of copyright rights for 
Chinese authors' works than for foreign authors' works.  Further, to the extent Article 4 applies with 
respect to related rights, these different processes, ta ken together with Article 4 of the Copyright Law, 
appear to result in earlier and otherwise more favor able protection and enforcement of related rights 
for Chinese performers' performan ces (or their fixations) and Chinese producers' sound recordings 
than for foreign performers' performances (or their fixations) and foreign pro ducers' sound recordings.  
The measures at issue therefore appear to be incons istent with China's obligations under Article 3.1 of 
the TRIPS Agreement, which provides that, subjec t to certain exceptions and qualifications, each 
Member shall accord to the nationals of other Members treatment no less favorable than that it 
accords to its own nationals with regard to the pr otection of intellectual property.  Additionally, 
because Article 4 of the Copyright Law, in  conjunction with the nationality-dependent 
pre-authorization and pre-distribu tion review processes established by the other measures at issue, 
causes foreign authors of works whose publication or  distribution has not been authorized or is 
otherwise prohibited not to enjoy the rights grante d to Chinese authors, the measures at issue appear 
to be inconsistent with China's obligations under Ar ticle 9.1 of the TRIPS Agreement (with respect at 
least to China's obligations under that article of the TRIPS Agreement to comply with Articles 5(1) 
and 5(2) of the Berne Convention).  
In addition, Article 4 of China's Copyright La w, both independently and in conjunction with 
the other measures at issue, appears to make it impo ssible to enforce copyrights (and, to the extent 
covered by Article 4, related rights) with respect  to works, performances or sound recordings whose 
publication or distribution in China has not been aut horized or is otherwise prohibited.  It therefore 
appears that, as a result of the measures at issue, Ch ina fails to ensure that enforcement procedures as 
specified in Part III of the TRIPS Agreement are available under its law so as to permit effective 
action against infringements (including expediti ous remedies to prevent infringement) of those 
copyrights and related rights in such circumstanc es, and that China does not provide for criminal 
procedures and penalties to be applied in certain case s of copyright piracy.  The measures at issue thus 
appear to be inconsistent with China's ob ligations under Articles 41.1 and 61 of the TRIPS 
Agreement.   
*  *  *  *  * 
 
Accordingly, the United States respectfully request s, pursuant to Article 6 of the DSU, that 
the Dispute Settlement Body establish a panel to ex amine these matters, with the standard terms of 
reference as set out in Article 7.1 of the DSU.   
 
__________ 
                                                     
 
19 See, e.g ., the Administrative Regulations on Audiovisual Products, articles 16, 28 and 36, and the 
Administrative Regulations on Electronic Publications, articles 28, 33, and 58-59.