WORLD TRADE  
ORGANIZATION  IP/C/55 
11 December 2009 
 (09-6415) 
Council for Trade-Related Aspects 
of Intellectual Property Rights  
 
 
 
TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
 
Report to the General Council by the Chair  
 
 1. At its meeting of 27 and 28 October 2009, the Council undertook the eighth annual 
transitional review of the implementation by Chin a of its WTO commitments pursuant to Section 18 
of the Protocol on the Accession of the People's Re public of China (WT/L/432), and agreed that the 
Chair, acting on his own responsibility, would prepar e a brief, factual report on the review to the 
General Council. 
2. Written comments and questions in connection with  the review were submitted in advance of 
the meeting by Japan, the United St ates and the European Communities.
1  These submissions were 
circulated in documents IP/C/W/537, IP/C/W/538 and IP/C/W/540. 
3. In a communication dated 21 October 2009, China provided information as specified in 
Annex 1A to the Protocol.  This submis sion was circulated as document IP/C/W/542. 
4. The annex to this report contains the relevant  part of the minutes of the Council's October 
meeting2 that reflects the statements made under the review. 
_______________ 
 
                                                      
1 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Community (done at Lisb on, 13 December 2007) en tered into force.  On 
29 November 2009, the WTO received a Verbal Note (WT/L/779) from the Council of the Eu ropean Union and 
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 1 December 2009, the European Union replaces and succeeds the European Community. 
2 To be circulated as IP/C/M/61. IP/C/55 
Page 2  
 
  ANNEX 
 
Item C of the minutes of the Council's meeting of 27-28 October 2009
 
to be circulated as IP/C/M/611  
 
 
1. The Chair  recalled that section 18 of China's Protocol on Accession required the TRIPS 
Council to review the implementation by China of  the TRIPS Agreement each year for eight years 
and report the results of such review promptly to  the General Council.  She further recalled that 
section 18 required China to provide relevant info rmation, including information specified in 
Annex 1A, to the TRIPS Council in advance of th e review.  She informed the Council that the 
information submitted by China pursuant to that  requirement, dated 21 October 2009, had been 
circulated as document IP/C/W/542.  Questions a nd comments in connection with the transitional 
review had been submitted by Japan, the United States and the European Communities (documents 
IP/C/W/537, 538 and 540, respectively).   
2. The representative of the European Communities  said that his delegation welcomed the 
progress in the area of intellectual property rights ma de by China since last year and took note of the 
many ongoing initiatives of which he underline in pa rticular The Action Plan for IP protection for 
2009;  the implementation of the National IP Strate gy; the entry into force of the new patent law 
which took place in October 2009; the revision of the trademark law; and the announced revision of the copyright law.  However, despite these positive de velopments and China's real efforts to address 
problems, his delegation remained concerned by the high level of counterfeiting and piracy in China.  
Although European customs seizures of counterfe it products coming from China had seen a certain 
decrease, China remained the main source of infri nging goods with 54 per cent of infringing articles 
seized at EC borders coming from there.  Euro pean companies continued to face serious IPR 
problems in China, particularly the lack of proper access to the judicial or administrative enforcement 
systems because of cumbersome notarization and legalization require ments which are unknown 
anywhere else in the world. 
3. In addition, criminal prosecution remained in effective, sanctions against infringers were 
insufficient to deter them, and administrative enfo rcement procedures were subject to discretion in 
many areas without any possibility of controlling why action was or was not taken.  Civil procedures 
against infringing activities also remained expensive,  time-consuming, and difficult to obtain.  This 
situation was reflected in the last EC intellectua l property rights survey which had been published 
recently. 
4. The EC was also concerned about certain offici al statements and internal notices in China 
which linked the financial crisis with a lowering of effective IP enforcement, as his delegation did not 
see a logical connection between the two concepts.  To encourage China to actively pursue its efforts 
towards an effective IPR enforcement system, hi s delegation was committed to continue working 
bilaterally with China, particularly through the world's largest technical cooperation programme on 
intellectual property, IPR2. 
5. The European Communities' cooperation with Ch ina was based on a structured dialogue on 
intellectual property as well as the EU-China inte llectual property working group which included 
participation of industry and which had held its sixth session in Beijing in September 2009.  The EU 
and China had also recently agreed on a cust oms action plan specifically dedicated to IPR 
enforcement.  Finally, he said, the European O ffice for Community Trademarks and Designs and its 
Chinese partners had concluded two memoranda of  understanding promoting the cooperation in the 
                                                     
 
1 The paragraph numbering of this excerpt will not co rrespond with that of the minutes of the TRIPS 
Council meeting but has been included for the convenience of users.  IP/C/55 
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  fields of trademarks and designs.  He hoped that this cooperative approach with China would lead to 
concrete and tangible results in further im proving the IPR situation in this country. 
6. His delegation had submitted thirty questions c overing a wide range of IPR issues, including 
patents, technology transfer, the protection of co nfidential data, trademarks, copyrights, including 
online piracy, plant variety protection and compet ition rules.  It had also asked questions on 
enforcement, including the involvement of right holders in legal proceedings, on customs measures 
and on these notarization and legalization requirement s.  He looked forward to receiving the answers 
to these questions from China. 
7. The representative of the United States  said that for her delegation the transitional review 
mechanism continued to be a usef ul mechanism that helped to pr ovide additional transparency for 
China's trade regime and allowed Members to better understand and assess China's progress in 
implementing and complying with its WTO obligati ons.  Turning to his delegation's submission 
before the Council, she noted that the United States appreciated the importance China attached to the 
protection of intellectual property rights and th e active steps that it had taken to improve IPR 
enforcement and protection, including a vigorous enforcement campaign during last year's Olympics 
as well as notable prosecutions of large software piracy operations.  
8. At the same time, the United States remained concerned about several aspects of China's 
regime for the protection and enforcement of intelle ctual property rights, in particular about reports 
that Chinese officials, especially at the provincial and local level, had been urging a more lenient 
enforcement of IPR laws in light of the global fi nancial crisis.  Her dele gation believed that the 
current situation called for a strengthened approach to IPR protection and enforcement in China, in 
order to grow and sustain a more robust and innovative economy in the longer term.  It was critically 
important that China and other WTO Members main tained regimes that respected all intellectual 
property rights regardless of national origin.  While  she understood the importance that China placed 
on promoting its domestic industries through indigenous innovation po lices, her delegation 
encouraged China to ensure that  these polices did not undermine the rights of non-Chinese owners of 
intellectual property rights or otherwise ran afoul of WTO rules.  The United States also continued to 
see evidence of unacceptable levels of IPR infringement , particularly in the numbers of Chinese goods 
seized at US borders.  Mid-year statistics for 2008 sh owed that China remained the source of the vast 
majority of infringing goods seized at US borders, accounting for 81 per cent of seizures by value, and 
it was troubling that the seizure of Chinese goods had been increasing, not d ecreasing, each year since 
China had joined the WTO in 2001. 
9. Exports of counterfeit and pira ted goods, however, were only part of the problem.  United 
States industries continued to report high rates of in fringement within China.  More work was needed 
to address growing challenges involving internet co unterfeiting and piracy in China, such as offering 
infringing products for sale to businesses and consumer s or deep linking to infringing files.  At the 
same time, the problem of physical counterfeiting an d piracy in China continued and was widespread 
as illustrated by the continuing operation of larg e wholesale and retail markets for counterfeit and 
pirated goods in a number of jurisdictions in Chin a.  The range of industry sectors affected by 
infringement within China was quite broad, in cluding, among many others, pharmaceuticals, 
electronics, batteries, auto parts, industrial equipm ent, toys, and musical instruments.  The United 
States was further concerned because many of the counterfeit products made in China continued to 
pose a direct threat to the health and safety of c onsumers not only in China, but in the United States 
and elsewhere around the world.   
10. In conclusion, her delegation looked forward to receiving China's responses to its questions, 
and to continuing to engage bilaterally with China on a wide range of IPR issues.  The United States 
appreciated the cooperative spirit in which the tw o countries had intensified IPR discussions under the 
Joint Commission on Commerce and Trade and other b ilateral mechanisms, and continued to believe IP/C/55 
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  that deeper multilateral and bilateral dialogue and cooperation would provide an important path to 
progress. 
11. The representative of Japan
 said that his delegation appreciat ed China's efforts to address the 
intellectual property problem in China, including deve loping its patent, trademark and copyright laws.  
However, counterfeiting remained a big problem as a large number of Japanese companies continued 
to face counterfeit problems in China.  One problem was that the equipment of former counterfeiters 
could easily be reused to produce counterfeit goods , because the equipment w as not destroyed after 
seizure of the goods and enforcement in China th erefore remained ineffective.  His delegation 
therefore requested that China enhance the seizure,  forfeiture and destruction not only of infringing 
goods but also of materials and implements predom inantly used in infringement.  Furthermore, his 
delegation requested China to provide sufficiently  deterrent measures by enhancing administrative 
action against counterfeiting, as Japa nese companies were bearing a high burden of investigation costs 
in administrative actions.  Japan also requested  the Chinese Government to upgrade its rules and 
regulations to better address the current situation, and to establish an adequate system to enhance 
copyright protection and enforcement.  In this cont ext his delegation welcomed that more expeditious 
and effective judicial reviews would be conducted by the Intellectual Property Tribunal referred to in 
the Regulation regarding Allocation of Judicial Re views of Administrative Decisions on Intellectual 
Property Cases including Patents and Trademarks , issued on 22 June 2009 by China's Supreme 
People's Court.  Japan looked forward to China's efforts to enhance intellectual property right protection in general and take further steps to provide effective enforcement against any act or 
infringement of intellectual property rights in China. 
12. The representative of China
 said that while his delegation welc omed the continuous interest in 
China's IPR situation and had listened carefully to the questions posed by the three Members, he was 
disappointed that the interventions this year did not  differ very much from the ones in the past seven 
years, apart from the figures cited.  His delegation had already stated at past debates that it had strong doubts about the credibility of these figures and their ability to reflect the real situation.  In particular, 
the recent interventions by other developing count ry Members regarding the confusion of generic 
medicines and counterfeit medicines in some c ountries, and customs officials without enough IP 
expertise and without sufficient support by their IP experts cast further doubt on the reliability of 
customs figures.  His delegation remained ready to  further discuss these issues both bilaterally and 
multilaterally.   
13. He also rejected some Members' assertions that China was trying to lower protection for IP 
because of the financial crisis.  He said that he ha d never heard anything like the statements or notices 
the European Communities had refe rred to, neither from his superiors nor from provincial capitals, 
and he questioned by what intelligence any internal notices may have been obtained by Members.  His 
delegation requested that the European Communiti es substantiate this assertion by sharing any 
documents, if that was not against their rules. 
14. During the past twenty years China had done a lo t to improve its IP protection, not purely in 
response to external pressures, but as a natural response to China's intern al needs, in which IP 
protection figured as essential and extremely important for building an innovative society.  At the same time, China remained open to  listen and help other Members to resolve any problems they might 
have in China.  Regarding assertions that comp anies had serious problems regarding expensive and 
time-consuming civil procedures, he encouraged  Members to share more detailed substantial 
information about these concerns with his delegation,  so that the issue could be addressed through the 
bilateral and multilateral channels. However, his delegation could not respond to assertions that were 
not substantiated.   
15. Another representative of China said that he woul d respond to the questions and concerns that 
had been raised under the TRIPS Transitional Review  Mechanism.  Regarding revisions to laws and  IP/C/55 
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  regulations in the field of intellectual property ri ghts in China, law enforcement measures and related 
statistics, he encouraged Members to refer to the information submitted by China under Annex 1A.  
As for the information not cove red by Annex 1A, he referred Me mbers to updates on the website 
www.gov.cn and the websites of the relevant govern ment authorities.  His remaining responses to 
Members' questions and concerns would be grouped under the following four headings:  
Part I:  Patents and related questions;  Part II:  Trademarks and ge ographical indications;  
Part III:  Copyrights and related ques tions;  and Part IV:  Enforcement.  
Part I:  Patents and related questions: 
16. Regarding the examination and approval of assigni ng a patent or a patent application right to 
a foreign country, the relevant procedures were provi ded for in Article 10 of China's Patent Law on 
technology export, which had been formulated in acc ordance with the requirements of the Regulations 
on Technology Import and Export Administration of the People's Republic of China.  He said that the 
present revision would cause no substantive change in these procedures as the revisions were confined 
to wording, aimed at achieving a more accurate expression of the provision.  
17. Regarding the confidentiality examination on filin g a patent application in a foreign country, 
he said that the revised Detailed Implementation Rules of the Patent Law and the Guidelines for 
Examination would specify the meaning of "the invention or utility model completed in China". 
According to Article 20(4), if a patent application for an invention or a utility model was filed in a 
foreign country in violation of th e provision of paragraph 1 of this Article, no patent would be granted 
if a patent application was subsequently filed in  China.  The provision provided a ground for rejecting 
a patent application or declaring a patent invalid.  Regarding compulsory licences, the revised 
Article 48(1) should be interprete d as imposing stricter conditions on the granting of a compulsory 
licence than before the revision, and would theref ore reduce the possibility of issuing a compulsory 
licence.  He said that the EC's understanding in this  regard was not correct, as there was no stipulation 
for a so-called automatic compulsory licence in China' s Patent Law.  The "public interest request", as 
was mentioned in Article 49 of China's Patent Law,  was in conformity with the meaning of "in cases 
of  public non-commercial use" mentione d in Article 31 of the TRIPS Agreement. 
18. The counterplea system concerning existing tec hnology had been established under Article 62 
of the revised Patent Law.  It meant that, in a pa tent infringement dispute, if the accused infringer had 
evidence to prove that the technology or design he exploited was an existing technology or design, no patent infringement would be found.  An accu sed infringer could therefore settle a burdensome 
dispute over patent rights without having to launc h a counterplea or initiating a complex invalidation 
procedure.  The patent right assessment report system  for the utility model or  design patent had been 
established in the second paragraph of Article 61 of the revised Patent Law.  According to this system, 
the People's Court or the patent administrative aut hority could require the patentee or the interested 
parties to present a patent assessme nt report in an infringement di spute involving a utility model or 
design patent.  Such a report would assess whether the patent right met the s ubstantive conditions for 
granting the patent right, which would effectively prevent the right holder from abusing his rights.   
19. With regard to the extension of the term of protection of patent rights, China's Patent Law 
stipulated the term of patent right protection for inve ntions to be twenty years, and the term of patent 
right protection for utility models and designs to be  ten years.  The patent rights terminated upon the 
expiration of its term and there was no extension of the term of protection for drugs and plant 
products.  
20. As to the term of protection for test data, he said that Article 35 of the Provisions for 
Implementation of the PRC Law for Drug Control stipul ated that "the State protects experimental data 
and other data that is self-obtained, undisclosed  and submitted by the manufacturer or seller who 
obtains the licence of manufacturing or selling the drug containing the new type of chemical IP/C/55 
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  composition.  Nobody should put such undisclosed e xperimental data and ot her data into improper 
commercial use."  Within a period of six years from the day when the manufacturer or seller obtained a licence for manufacturing or selling the drug containing a new chemical composition, the drug supervision and administration authorities would not grant a licence for manufacturing or selling that drug to other applicants who applied for the licence by using the same data without the consent of the 
applicant who had obtained a licence. This did not  apply in cases where the other applicants had 
submitted their own self-obtained data.  
Part II:  Trademarks and Geographical Indications 
21. With respect to the length of trademark exam ination, he said that following the annual 
increase in registered trademarks the number of trad emarks examined this year by China's trademark 
authorities had reached one million on 15 September 2009.  China had adopted various means to 
improve the efficiency of trademark examination.  In 2009, the time length of trademark examination 
was shortened from 30 months to 19 months.  
22. In 2008, the State Administration of Industry and Commerce (SAIC) had received 17,518 
trademark oppositions, of which 
10,993 were concluded.  He said that , at present, the delay for rulings 
on trademark oppositions was about 30 months.  As  for the cases of re-examining rejected trademark 
applications, cases that had been submitted in June  2009 were now being heard so that the time from 
lodging an opposition to the substa ntive handling of the case was four months.  With regard to cases 
of re-examining trademark oppositions , cancelling re-examinations, or trademark disputes, cases filed 
at the end of 2006 were now being heard, so that  the time from lodging a trademark opposition to the 
substantive handling of such a case was 34 months.  According to the rules and practices of the 
Trademark Review and Adjudication Board, the time from the initiation of substantive handling to the 
ruling on a case was six months.  
23. Regarding joint examination of trademarks, in addition to the application for international 
registration of marks under the Madrid Agreement, the SAIC  applied the principle of "one trademark, 
one class" to trademark registrations, and conduc ted a classification examination of trademarks. 
24. Regarding well-known trademarks, in the pro cess of determining well-known trademarks, the 
SAIC treated trademark owners from China and othe r countries equally and without discrimination.  
He said that local governments formulated the measures of determining and protecting famous 
trademarks based upon local conditions at the provi ncial level.  Therefore, there was no unified 
national standard for determining famous trademarks and the level of protection for famous brands 
varied from region to region.  As regarded the issue of "export brands", he said that the 
implementation of the programmes on expor t brands had already been stopped.  
25. Regarding geographical indications, he said that the Chinese Government attached 
importance to their protection and had established its own geographic indication protection system 
based on China's national conditions and economic development level.  The relevant authorities were 
actively working to improve the effectiveness of GI protection and China was seeking to strengthen 
cooperation with other Members in this regard.   
26. With regard to GIs for agricultural products, he said that agricultural authorities would not 
accept GIs for agricultural products that had alr eady been registered with the quality control 
authorities.  Grounds for opposition to an application included the qualifications of the applicant, the 
scope of regional protection, the pr oduct name and the technical standa rds for quality control.  Once a 
GI for an agricultural product had obtained prot ection from the agricultural authorities, the 
registration certificate was effective for a long term and needed no renewal if the registration 
conditions remained unchanged.  The registration information on th e agricultural product was open to 
the public in the GI registration process.  Furt her information was available at the website  IP/C/55 
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  www.aqsc.gov.cn.  The Ministry of Agriculture was further considering the formulation of 
Management Measures for the Registration and Protection of GIs of Agricultural Products from Foreign Countries in the People's Republic of China.  
Part III:  Copyrights and related questions 
27. He said that the question of how to pay rem uneration for the broadcas ting of audio products 
between the time when the Copyright Law was pu t into effect in 2001 and the time when the 
Measures for Paying the Remuneration for the Broad casting of Audio Products at Radio Stations and 
Television Stations would come in to force would be addressed in t hose measures, which were still in 
the process of formulation.  
28. Regarding the obligations of users of works a nd audio-visual products, it was stipulated in 
Article 27 of the Copyright Collective Management Re gulations that "Unless it is otherwise agreed in 
the licensing contract, the user should, when paying the royalties to the copyright collective 
management organization for the work or the audi o-visual product he uses, provide the name, the 
name or the title of the right holder and the means,  amount, time and other information about its usage 
of the work or the audio-visual product."  Article 43 stipulated that in case of a violation of Article 27, 
where a user refused to provide or falsified info rmation about the use, the copyright administrative 
department under the State Council would order the u ser to correct the information and the copyright 
collective management organization could disconti nue the performance of the licensing contract.  
These stipulations showed that the user had a legal obligation to provide this information, and that 
failure to do so was sanctioned not only by the administrative authority's order to make the 
appropriate corrections, but also the possible discon tinuation of the licensing contract by the copyright 
collective management organization.  
29. With respect to the current revision of the Co pyright Law, he said that this revision was 
related to the WTO Dispute Settlement Body, and th at China was actively working in this regard.  
Part IV:  Enforcement  
30. With regard to the pendency period of administ rative cases concerning patents, trademarks or 
other intellectual property rights, the Administrative Litigation Law stipulated that period to be three 
months in the first instance, and two months at the appeals stage.  He said that compared with other 
countries, Chinese courts were relatively efficient in this area. 
31. With regard to the familiarity of judges with intellectual property law, most Chinese courts at 
or above the intermediate level had established special IP tribunals as early as the late 1990s and a 
number of judges familiar with intellectual property rights had already been given their posts.  For 
instance, after the promulgation of the Provisions of the Supreme People's Court on the Jurisdiction 
over Administrative Cases Concerning Patent, Tradem arks and other Authorized and Recognized IP 
Rights, the Beijing First Intermediate People's Court had posted six judges and eight judicial assistants to its IP tribunal. 
32. With regard to the coordination between civil tribunals and intellectual property tribunals, in 
situations where the IP issues involved in 
a case under judicial review and in a civil case were the 
same and both cases were pending, if the trial of th e civil tort case depended on the outcome of the 
judicial review, the civil tribunal could decide to suspend the trial of the civil case.  
33. With regard to case initiation standards for crim inal IP investigations, the Supreme People's 
Court and the Supreme People's Procuratorate had pr omulgated two Interpretati ons on Several Issues 
Concerning the Application of Law to Criminal IP C ases in 2004 and 2007, respectively.  The Public 
Security Bureaus (PSB) of China dealt with crim inal IP cases in accordance with these regulations. IP/C/55 
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  34. With regard to the effectiveness of IP enforc ement in China, he said that the information 
provided by China in Annex 1 of China's submissi on had demonstrated the effectiveness of such 
enforcement.   Furthermore, in the dispute DS36 China – IPRs , the panel had not found the thresholds 
in the Chinese Criminal law to be  inconsistent with WTO rules. 
35. He said that after the Supreme People's Court and the Supreme People's Procuratorate had 
jointly promulgated the Judicial Interpretation on IP-related Criminal Cases at the end of 2004, the 
number of IP-related criminal cases accepted and h eard by courts had increased considerably.  In 
2007, 3326 IP-related  criminal cases of first instan ce had been settled in local courts throughout the 
country.  These decisions had been bi nding upon 5388 persons, out of which 
5386 were convicted.  
Among the settled cases, 1657 persons had b een convicted of IP infringement in 996 cases, 1040 
persons had been convicted of producing and marketing fake or  substandard commodities in 610 
cases, and 2667 persons had been convicted of illega l business operations in 1707 cases.  
36. With regard to the calculation methods for the cr iminal thresholds, he said that in accordance 
with the relevant provisions in the Interpretation on Several Issues Concerni ng the Application of Law 
to Criminal IP Cases jointly promulgated by the Supreme People's Court and the Supreme People's 
Procuratorate in December 2004, "sales revenues" an d "value of the goods" should apply to different 
criminal IP cases.  The concept of "sales revenues"  applied to Article 214 of the Criminal Law and 
was prescribed in the Interpretation in that regard, while the concept of "value of the goods" applied to 
Articles 213, 215, 216 and 217 of the Criminal Law.  In accordance with Article 12 of the 
Interpretation, the calculation of "value of the goods " did not exclude infringing products at the stages 
of "production, storage and transportation". 
37. With regard to the export of counterfeit and pirated goods, he said that the TRIPS Agreement 
did not oblige Members to apply border measures with respect to exports and that, therefore, these IP enforcement actions of Chinese customs should not fa ll under the transitional review mechanism.  In 
addition, IP infringement and international trade of  counterfeit and pirated goods were not issues of 
one particular Members, but a problem facing all WTO Members.  He emphasized that China had 
always paid special attention to its customs c ooperation regarding IP protection with the United 
States, the European Communities, as well as with other Members, and had ta ken various measures in 
this regard.  These included strengthening law enfo rcement regarding counterfeit and pirated goods 
exports, enhancing cooperati on with foreign customs in law enforcement, as well as IP education of 
domestic manufacturers and exporters.  
38. With regard to the commercial production and sal e of optical disks containing pirated movies 
and music, the Copyright Law specifically stipulated "legal liability and enfo rcement measures" for IP 
infringement in Articles 46 to 52 of its Chapter V.  All of these provisions were consistent with the 
current international rules for copyright.  Right holders, who learnt of any commercial production and 
sale of optical disks containing pirated movies and music or other relevant activities, could seek remedies through the legal channels.  
39. The representative of Cuba
 said that his delegation recognized the long and systematic work 
China had carried out in order to progressively in crease the level of IP protection.  As China had 
mentioned, protecting intellectual property rights was part of its national system in order to achieve 
scientific results for national development.  Th ese results were perceptible and measurable in a 
country where intellectual property had been prot ected for only about 30 years.  His delegation 
believed that such results should be compared to the situation in developed countries that had gone 
through different stages following the imperatives of th eir own development.  Even so, 120 years after 
such systems of IP protection had been drawn up in developed countries, in spite of all the measures 
taken against piracy, these countries had not yet been  able to eliminate piracy and counterfeiting.  IP/C/55 
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  40. The representative of the European Communities  thanked the Chinese delegate for his 
answers, although he said that not all of his delegatio n's questions had been answered.  He said that, 
while his delegation acknowledged the progress made by China, the reason why the statements by 
Members were not very different from statements at  previous sessions was that many of the problems 
remained the same.  With regard to the customs st atistics, he said that these were accurate and that 
93 per cent of counterfeit medicines intercepte d at EC borders were suspected trademark 
infringements, indicating that these were pure fake  medicines that could actually kill people.  
41. As to the issue of lowering standards of protection for IPR in the context of the economic 
crisis, he referred the Chinese delegation to the statement of the vice-president of the Supreme Court of December 2008 and to the administrative notice at lo cal level which had been issued in this regard.  
He noted that other delegations ha d also referred to this issue.  
42. In respect to the efficiency  of the Chinese courts he sai d that, while his delegation  
acknowledged the positive aspects, the problem was not so much the delay, but the lack of  justification why a case was or was not accepted by a cour t.  In Chinese the issue was referred to as  
LI-AN.  
43. With respect to the answers provided by China,  he said that his delegation appreciated their 
comprehensiveness, but a few issues had not been addressed.  These included question 32 on 
notarization and legalization of the powers of attorn ey and of evidence, which was a big problem in 
terms of access to justice.  Also, question 16 on  the relationship between intellectual property and 
standards, and the reduction of patent rights when  technology was included in a standard, had not 
been answered.  Question 27, on plant variety protection and the absence of a certain form of 
protection, as well as question 30 on the issue that right holders were not informed about the follow 
up to their cases, had also not been answered either. 
44. The representative of Canada
 said that her delegation appreciated China's continued 
engagement in a dialogue on IP issues at the WT O and at other international fora, such as the 
Heiligendamm process.   This pr ovided opportunities to share best  practices and other experiences 
between the respective intellectua l property agencies and experts, such as on the ongoing challenges 
that Canadian companies were facing in China.   Canada acknowledged the progress and achievements 
in reforming China's IP regime but noted that there were still areas of concern.  Her delegation 
remained concerned about the range of patent, tr ademark and copyright infringement cases occurring.  
The rights of Canadian and Chinese innovators alike were damaged by individuals or organizations 
who were able to exploit loopholes in the existing Chinese regulations and legal processes.  Canadians 
hoped the ever deepening investments in innovation technology development would be backed up and 
supported by a growing legal and enforcement infr astructure under Chinese IP laws.  Her delegation 
encouraged the Chinese Central Government to work  closely with local governments and to continue 
strengthening IP protection across China.  Fina lly, Canada commended China's commitment to IPR 
training, especially in the area of traditional protec tion in local courts, and looked forward to further 
progress on this front. 
45. The representative of China  said that, with respect to the so-called financial crisis related IP 
issue, China's determination to further improve its IP situation ran from its highest leaders down to the 
field handlers and would not be affected by inappr opriate factors, including the financial crisis.  
However, as one could never rule out isolated cases of such remarks, his delegation would verify any 
information that the European Communities could share. 
46. He said that, while the credibility of figures and statistics could be discussed forever, the point 
was that counterfeiting and piracy was a global issue that existed not merely because infringing products were produced somewhere, but also because there were markets, trans-shipments, importers 
and consumers of such products.  While China ma inly combated the infringements by producers, IP/C/55 
Page 10  
 
  retailers and wholesalers, his de legation hoped that something could also be done about the 
consumers.  With regard to the issue of whether the results of China's efforts were concrete and 
tangible, he said that the results of China's civ il and administrative enforcement procedures were well 
illustrated by the information provide d under Annex 1A of section 18.  He said that this dual system 
was something specific to China not comparable to most other Members.  China also had criminal 
procedures in place that had been upheld by a dispute settlement panel, as well as bilateral and 
multilateral mechanisms which could go through these i ssues and try to improve them to make results 
more concrete and tangible. 
47. Regarding the EC comments regarding unanswere d questions, he said that his delegation had 
only received the EC communication one week before  the meeting.  The communication consisted of 
nine pages of 35 questions which touched on areas relating to various ministries, regional 
governments and also the judicial system.  It had b een extremely difficult for his delegation to collect 
this information, translate the questions from E nglish into Chinese and the answers from Chinese into 
English, and complete the requirements of their inte rnal system for verification and approval, and he 
apologized for this.  There were, however, also some  questions that his delegation had found difficult 
to answer, since they had been based on pure assumptions that had not been substantiated.  For 
example, paragraph 11 of the EC submission had stated that it had been felt in many cases that the information required for document verification ha d gone beyond the scope necessary for approval or 
authorization.  Without any substantiating info rmation regarding the cases and the information 
required, it was extremely difficult for governments to verify and answer such questions.    
48. Another example in this regard were the ques tions in paragraph 21 which related to various 
retail and wholesale markets in Beijing City.  Th e European Communities had asked: "can China 
indicate which action it intends to take to definite ly clean out the markets from counterfeit products."  
As a non-native English speaker, he had looked up the dictionary definition of the formulation "clean 
out", which had indicated that it had a very strong meaning along the lines of "to deprive of any", so that there should be no more incidents like that.  He said that while any Member could commit itself 
to clean out any counterfeit products from its reta il or wholesale markets, it was something that was 
realistically impossible for anyone.  In the same way that a doctor could not guarantee that a child 
would never cough again after treatment, or a policeman could not guarantee the end of illegal 
parking after issuing a parking ticket, in the same way the laws were there to prevent IP infringements 
from happening, but it was impossible to guarantee their complete end.  What could be done, 
however, if the European Communities could share information regarding specific cases with his 
delegation, was that China could address them on a case-by-case basis.  In the remaining questions in 
paragraph 21, the European Communities had simply re quested China's agreement to the view that its 
police needed to be involved and that infringements needed to  be addressed, and so forth.  
Theoretically speaking, of course, China and all Members could agree to these kinds of assumptions, 
because they were theoretically co rrect.  But in practice, as illustrated by the information provided 
under Annex 1A, these actions had already been take n.  If the European Communities wanted China 
to revise its onerous formality requirement for enfo rcement, it would help to specify how onerous and 
expensive they really were.  He expressed doubts whether, compared to Europe, anything could be 
expensive in China.  China appreciated Members' in terest in its IP system and looked forward to 
further dynamic and meaningful interaction w ith them both bilaterally and multilaterally. 
49. The representative of the European Communities
 said he was disappointed about China's 
response regarding the lack of clarity of questions.  Any lawyer could answer a question by at least 
one other question, but the point was to answer the questions in this review mechanism.  Since these 
questions had all been discussed bilaterally between  the EU and China in their IP dialogues and 
working groups, he could not accept the argument that  China did not know what these questions were 
about.  His delegation was worried to hear that it was impossible to clean out a market of counterfeit 
goods, because that was what the TRIPS Agreement said Members should do.  The comparison with 
the doctor and policeman regarding future action was irrelevant since nobody asked China to commit  IP/C/55 
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  that there would be no more counterfeiting ever, but  his delegation would first like to see that there 
was no more counterfeiting as of the present day.  It was understandable that there would be 
enforcement issues on the scale of an entire country , and that was not a problem.  But here, as 
specified in its question, the European Commun ities was referring specifically to the Beijing Silk 
Market, the largest counterfeit market of the wo rld in downtown Beijing next to the diplomats' 
quarter, which was a six-floor building full of counterfeits .  So this was not an issue of pockets of lack 
of enforcement, but a specific case which had b een highlighted for years as a high priority. With 
respect to the term "clean out", he said that while  he sympathized with not being of English mother 
tongue, the formulation "clean out" could easily be  replaced by "emptied of counterfeit goods", or 
"close the markets" since the ma rket in question was exclusively relying on counterfeit goods.    
50. The Chair  thanked China for the information it had provided, as well as other Members for 
their contributions.  Turning to the Council's reporting obligation to the General Council, she 
suggested that the Council follow th e same procedure as in the past years, namely that the Chair, 
acting on her own responsibility, would again prepare a factual report.  The content of the cover page 
to the report would be similar to that of the repor t submitted by the Council in 2008 and the part of the 
minutes reflecting the discussions held under this agenda item would be attached. 
51. The Council took note  of the statements made and agreed  to proceed as suggested by the 
Chair. 
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