IV 
108TH CONGRESS 
2D SESSION 
H. RES. 576
Urging the Government of the People’s Republic of China to improve its 
protection of intellectual property rights, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 24, 2004
Ms. WATSON (for herself, Mr. LANTOS, and Mr. HYDE) submitted the fol-
lowing resolution; which was referred to the Committee on International 
Relations 
RESOLUTION 
Urging the Government of the People’s Republic of China 
to improve its protection of intellectual property rights, 
and for other purposes.
Whereas on December 11, 2001, the People’s Republic of 
China acceded to the World Trade Organization (WTO) 
and agreed to implement a set of sweeping reforms de-
signed to protect intellectual property rights under the 
terms of its accession; 
Whereas the accession by China to the WTO included the 
adoption by China of the Agreement on Trade-Related 
Aspects of Intellectual Property Rights (TRIPS Agree-
ment), which establishes minimum standards for intellec-
tual property rights to be provided by each WTO member
•HRES 576 IH 
and certain general principles applicable to all intellectual 
property rights enforcement procedures; 
Whereas following its accession to the WTO and adoption of 
the TRIPS Agreement, China initiated a series of meas-
ures and a comprehensive review of its intellectual prop-
erty rights laws to bring itself in compliance with inter-
national standards in patent, trademark, copyright, trade 
secret, and other intellectual property laws; 
Whereas central and local Chinese Government officials con-
tinue to work with their counterparts in the United 
States to improve China’s intellectual property rights en-
forcement through regular bilateral discussions, round-
table meetings, and numerous technical assistance pro-
grams; 
Whereas China has initiated campaigns to seize illegal and 
pirated goods, closed or fined several assembly operations 
for illegal production lines, seized millions of illegal 
audio-visual products, and expanded training of law en-
forcement officials relating to intellectual property rights 
protection; 
Whereas although China has made significant improvements 
to its framework of law, regulations, rules, and judicial 
interpretations regarding intellectual property rights, its 
intellectual property rights enforcement mechanisms still 
face major obstacles, which have resulted in continued 
widespread piracy and counterfeiting of film, recorded 
music, published products, software products, pharma-
ceuticals, chemical products, information technology 
products, consumer goods, electrical equipment, auto-
mobiles and automotive parts, industrial products, and 
research results throughout China;
•HRES 576 IH 
Whereas such widespread piracy and counterfeiting in China 
harms not only the economic development of China but 
also the economic and legal interests of United States 
business enterprises that sell their products or services in 
China, whether or not these United States business en-
terprises have invested in China or ever will invest in 
China; 
Whereas United States losses due to the piracy of copy-
righted materials in China is estimated to exceed 
$1,800,000,000 annually and counterfeited products to 
account for 15 to 20 percent of all products made in 
China, approximately 8 percent of the country’s gross na-
tional product; 
Whereas the market value of counterfeit goods in China is be-
tween $19,000,000,000 and $24,000,000,000 annually, 
causing enormous losses for intellectual property rights 
holders worldwide; 
Whereas more than 60 percent of all goods imported into the 
United States that infringe intellectual property rights 
and are seized by the Bureau of Customs and Border 
Protection of the Department of Homeland Security 
originate in China; 
Whereas the export of pirated or counterfeit goods from 
China to third country markets causes economic losses to 
United States and other foreign producers of patented, 
trademarked, and copyrighted products competing for 
market share in those third country markets; 
Whereas, according to the United States Trade Representa-
tive, current criminal laws and enforcement mechanisms 
for intellectual property rights in China by administrative 
authorities, criminal prosecutions, and civil actions for
•HRES 576 IH 
monetary damages have not effectively addressed wide-
spread counterfeiting and piracy; 
Whereas administrative authorities in China rarely forward 
an administrative case relating to intellectual property 
rights violations to the appropriate criminal justice au-
thorities for criminal investigation and prosecution; 
Whereas China currently has high criminal liability thresh-
olds for infringements of intellectual property rights, with 
an unreasonable proof-of-sale requirement totaling ap-
proximately $24,100 for business enterprises and $6,030 
for individuals (according to current exchange rates) that 
makes criminal prosecution against those enterprises or 
individuals that violate intellectual property rights ex-
tremely difficult; 
Whereas seizures and fines imposed by Chinese authorities 
for intellectual property rights violations are perceived by 
the violators to be a cost of doing business and such vio-
lators are usually able to resume their operations without 
much difficulty; 
Whereas China has the second largest number of Internet 
users in the world, it still has not acceded to the 1996 
World Intellectual Property Organization (WIPO) Inter-
net-related treaties that reflect international norms for 
providing copyright protection over the Internet; 
Whereas China’s market access barriers for United States 
and other foreign cultural products such as movies, 
music, and books stops or slows the legal entry of these 
legitimate products into China, in turn increasing the de-
mand for pirated products; 
Whereas in the United States Trade Representative’s ‘‘Spe-
cial 301’’ Report for 2003, the implementation by China
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of the 1995 bilateral agreement with the United States 
on the protection of intellectual property rights is subject 
to monitoring under section 306 of the Trade Act of 
1974 (19 U.S.C. 2416); and 
Whereas the United States Trade Representative is currently 
preparing the ‘‘Special 301’’ Report for 2004, to be made 
public on April 30, 2004: Now, therefore, be it
Resolved, That the House of Representatives—
(1) commends the Government of the People’s 
Republic of China for the steps it has taken to im-
prove its legal framework for intellectual property 
rights protection and for efforts to bring itself to-
ward compliance with international standards for in-
tellectual property rights established by the World 
Trade Organization (WTO); 
(2) recognizes, despite the steps referred to in 
paragraph (1), the continuing existence of wide-
spread intellectual property rights violations in 
China and encourages the Chinese Government to 
take further and immediate steps to improve en-
forcement of such rights; 
(3) urges the Chinese Government to undertake 
a coordinated nationwide intellectual property rights 
enforcement campaign, to eliminate the high crimi-
nal liability threshold and procedural obstacles that 
impede the effective use of criminal prosecution in 
addressing intellectual property rights violations, to
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increase the criminal penalties provided for in its 
laws and regulations, and to vigorously pursuit coun-
terfeiting and piracy cases; 
(4) recommends that the Chinese Government 
implement more effective customs and border meas-
ures to prevent the massive exportation of pirated 
goods into the United States and other countries; 
(5) encourages the Chinese Government to fully 
and comprehensively implement a legal framework 
and effective enforcement mechanisms that would 
protect not only intellectual property rights held by 
United States and foreign business enterprises with 
or without investments in China, but also Chinese 
intellectual property rights holders, which is crucial 
to China’s own economic development and techno-
logical advancement; 
(6) urges the Chinese Government to give 
greater market access to the foreign producers of le-
gitimate products such as films and other audio-vis-
ual products in order to reduce demand for and 
prevalence of pirated and counterfeit goods in their 
absence; 
(7) calls upon the Chinese Government to 
promptly accede to the 1996 World Intellectual 
property Organization (WIPO) Internet-related trea-
•HRES 576 IH 
ties and harmonize its regulations and implementing 
rules with the treaties fully; and 
(8) will continue to monitor closely and work 
with the Administration to encourage China’s efforts 
to bring its framework of laws, regulations and im-
plementing rules into compliance with the Agree-
ment on Trade-Related Aspects of Intellectual Prop-
erty Rights (TRIPS Agreement) and to create and 
maintain effective intellectual property rights en-
forcement mechanisms capable of deterring counter-
feiting and piracy activities.
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