IV 
109TH CONGRESS 
1ST SESSION 
H. CON. RES. 303 
Urging the United States Trade Representative to take action to ensure 
that the People’s Republic of China complies with its obligations to 
protect intellectual property rights, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 17, 2005 
Mr. DEFAZIO (for himself, Mr. ROHRABACHER, Mr. SANDERS, Mr. BURTON 
of Indiana, Mr. RYAN of Ohio, Mr. LIPINSKI, Ms. WOOLSEY, Mr. TAYLOR 
of Mississippi, Mr. MCGOVERN, Mr. BAIRD, Mr. STUPAK, Mr. BROWN of 
Ohio, Mr. PAYNE, and Mr. KUCINICH) submitted the following concurrent 
resolution; which was referred to the Committee on Ways and Means 
CONCURRENT RESOLUTION 
Urging the United States Trade Representative to take ac-
tion to ensure that the People’s Republic of China com-
plies with its obligations to protect intellectual property 
rights, and for other purposes. 
Whereas despite signing bilateral intellectual property agree-
ments with the United States in 1992, 1995, and 1996, 
the People’s Republic of China continues to ignore wide-
spread theft of intellectual property within its borders; 
Whereas China further undermines intellectual property 
rights by exporting counterfeit products to other coun-
tries;
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Whereas even China’s accession to the World Trade Organi-
zation (WTO) in 2001, which required that China comply 
with the WTO Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS Agreement), has 
failed to stop the theft of intellectual property in China; 
Whereas by committing to the TRIPS Agreement, China is 
bound by minimum standards of protection for copy-
rights, trademarks, industrial designs, patents, and simi-
lar intellectual property rights; 
Whereas by committing to the TRIPS Agreement, China is 
also bound by minimum standards for administrative, 
civil, and criminal actions against violators of intellectual 
property rights; 
Whereas the December 2004 report to Congress by the 
United States Trade Representative (USTR) on China’s 
compliance with its WTO obligations documents that sig-
nificant problems remain with respect to intellectual 
property protection in China, particularly the enforce-
ment of intellectual property rights, which the USTR re-
ported ‘‘remained ineffective in 2004’’; 
Whereas merely changing laws or regulations to provide 
greater protection for intellectual property rights means 
nothing unless those rights are vigorously enforced; 
Whereas the December 2004 USTR report shows that little 
progress has been made toward improving enforcement, 
concluding that ‘‘counterfeiting and piracy are at epi-
demic levels and cause serious economic harm to U.S. 
businesses in virtually every sector of the economy’’; 
Whereas the 2005 National Trade Estimate Report on For-
eign Trade Barriers, also prepared by the USTR, reports 
that administrative enforcement actions in China ‘‘do not
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appear to deter further IPR infringement’’ because the 
cases result in extremely low fines; the established value 
for fines is based on the price charged for the counterfeit 
or pirated good rather than the price of the genuine arti-
cle; evidence showing a person was warehousing counter-
feit goods is not sufficient to prove intent to sell, which 
means that the value of warehoused goods are not in-
cluded in fines; and administrative authorities ‘‘rarely 
forward an administrative case on to the Ministry of 
Public Security for criminal investigation, even for com-
mercial-scale counterfeiting or piracy’’; 
Whereas the 2005 Foreign Trade Barriers report also states 
that criminal enforcement in China ‘‘has virtually no de-
terrent effect on infringers’’ because criminal prosecu-
tions are pursued ‘‘in a relatively small number of cases’’; 
‘‘a lack of transparency makes it sometimes difficult to 
find out if they resulted in convictions and, if so, what 
penalties were imposed and whether the penalties were 
suspended’’; criminal liability thresholds ‘‘were very high 
and seldom met,’’ because, among other things, 
warehoused goods are not included in calculations of the 
damage done; and China failed ‘‘to treat the export of 
counterfeit or pirated goods on a commercial scale as a 
criminal act’’; 
Whereas in the 2005 Foreign Trade Barriers report, the 
USTR also states that ‘‘U.S. companies continued to 
complain in 2004 that there is still a lack of consistent 
and fair enforcement of China’s IPR laws and regulation 
in the courts. They have found that most judges lack nec-
essary technical training and that court rules regarding 
evidence, expert witnesses, and protection of confidential 
information are vague or ineffective.’’;
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Whereas various USTR reports document that, in addition, 
there is a lack of coordination among Chinese govern-
ment ministries and agencies that hamper enforcement, 
and local protectionism and corruption is rampant; 
Whereas according to one United States trade association, 
various counterfeiting and piracy rates in China in 2004 
exceeded 90 percent for virtually every form of intellec-
tual property; 
Whereas according to the USTR, estimated losses incurred 
by United States businesses due to counterfeiting and pi-
racy in China range between $2,500,000,000 and 
$3,800,000,000 annually, with the market value for 
counterfeit 
goods 
in 
China 
totaling 
between 
$19,000,000,000 and $24,000,000,000; 
Whereas according to the USTR, resolving an allegation of 
patent theft in China takes 4 to 7 years to complete; 
Whereas intellectual property losses in China harm United 
States businesses both large and small, but are particu-
larly problematic for small companies that may not have 
the resources to navigate the Chinese legal bureaucracy 
or to withstand financial losses that occur during the 
lengthy process to resolve disputes; 
Whereas the 2004 Economic Report of the President states 
that ‘‘As trade in goods embodying valuable intellectual 
property has grown, the protection of intellectual prop-
erty has emerged as an important policy concern’’; 
Whereas the report goes on to note that ‘‘The Administration 
has actively pursued measures in trade agreements to en-
sure the security of U.S. intellectual property rights’’; 
Whereas the January 2004 Manufacturing in America report 
by the United States Department of Commerce concludes
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that ‘‘To the extent that U.S. investment in research and 
development provides a competitive edge in the market-
place, the protection of intellectual property developed by 
U.S. manufacturers, which embodies the product of that 
research, becomes critical to the future of the manufac-
turing sector’’; 
Whereas the 2004 Economic Report of the President states 
that ‘‘If countries are found to be in violation of their ob-
ligations under a trade agreement, the United States 
could retaliate against those countries across the entire 
range of transactions covered by the agreement’’; 
Whereas on March 9, 2004, then-USTR Robert Zoellick testi-
fied before the Senate Finance Committee about the 
‘‘rampant piracy of intellectual property rights’’ in China, 
and went on to say that ‘‘China’s lax enforcement of in-
tellectual property rights, including counterfeiting, is a 
fundamental issue . . . the practices could subvert the de-
velopment of knowledge industries and stifle innovation 
around the world’’; 
Whereas Mr. Zoellick also testified on March 9, 2004, that 
‘‘We recognize that enforcement of China’s commitments 
requires sticks as well as carrots, and we are certainly 
willing to utilize the tools Congress has made available to 
us. These include . . . WTO dispute settlement, an option 
we may need to deploy very soon.’’; and 
Whereas section 301(d)(3)(B) of the Trade Act of 1974 pro-
vides specific protections for intellectual property by not-
ing that an act, policy, or practice of a foreign country 
is unreasonable if it ‘‘denies fair and equitable . . . provi-
sion of adequate and effective protection of intellectual 
property rights notwithstanding the fact that the foreign 
country may be in compliance with the specific obliga-
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tions of the Agreement on Trade-Related Aspects of In-
tellectual Property Rights’’: Now, therefore, be it 
Resolved by the House of Representatives (the Senate 
concurring), That the Congress— 
(1) believes that the failure of the People’s Re-
public of China to protect intellectual property is in-
consistent with its obligations under the Agreement 
on Trade-Related Aspects of Intellectual Property 
Rights and denies the benefits of this agreement to 
the United States; 
(2) further believes that China’s failure to ade-
quately fulfill its obligations to protect intellectual 
property is unjustifiable and burdens or restricts 
United States commerce under section 301 of the 
Trade Act of 1974; 
(3) strongly urges the United States Trade 
Representative to take action under section 301 of 
the Trade Act of 1974 to combat rampant intellec-
tual property violations in China, including the im-
position of bilateral tariffs as allowed under section 
301; and 
(4) strongly urges the Trade Representative to 
use all additional means available to the United 
States, including filing a complaint at the World 
Trade Organization, to ensure that China complies