U.S. presses China on piracy

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The Bush administration yesterday demanded China offer detailed information on its efforts to combat "rampant" piracy and counterfeiting of movies, software and other products.

The information request, filed under World Trade Organization (WTO) rules, steps up pressure on China to crack down on intellectual-property theft from U.S. companies but falls short of a formal complaint that could lead to trade sanctions. Japan and Switzerland filed similar requests.

"If China believes that it is doing enough to protect intellectual property, then it should view this process as a chance to prove its case," said U.S. Trade Representative Rob Portman.

Mr. Portman's office earlier this year estimated U.S. losses from piracy of copyrighted materials, such as business software, ranged between $2.5 billion and $3.8 billion annually. Chinese knockoffs of trademarked goods, such as brand-name batteries, pharmaceuticals and auto parts, also hurt American companies U.S. Customs and Border Protection -- last year seized $134 million of such Chinese products at U.S. ports.

Gillette razors, Microsoft Windows and Zippo lighters have been copied in China, while American movies have been recorded in theaters on opening day and then sold as cheap DVDs on the street.

"Our goal is to get detailed information that will help pinpoint exactly where the enforcement system is breaking down so we can decide appropriate next steps," Mr. Portman said.

One potential next step would be a case at the WTO demanding that China stop piracy and counterfeiting or face trade sanctions. The Bush administration is being pressured by Congress and businesses to get tougher with China, but appears to prefer negotiations to formal WTO litigation.

Yesterday's request asks China to provide detailed information on steps taken to eliminate piracy and counterfeiting, including criminal penalties handed out, the names of the authorities responsible for resolving infractions, the nationalities of those prosecuted, and the kinds of products illegally reproduced.

The administration, in a letter to China's ambassador to the WTO, asked for a response by Jan. 23.

"The Chinese government wishes to cooperate in this field with any country in the world. China complies with the regulations of the WTO ... and also with bilateral agreements," said Chu Mao Ming, spokesman for China's embassy in Washington, when asked whether China would respond to the letter.

Mr. Chu said his government is determined to fight intellectual-property violations, and has strengthened its efforts to crack down on trademark and copyright offenders -- including the recent creation of a committee to coordinate agencies and an increase in criminal penalties for violations.

But U.S. government and business officials say they have seen no decline in violations.

"In spite of the steps the Chinese government has taken in recent weeks to cooperate with the U.S. industry to protect U.S. filmed entertainment, piracy in China remains unacceptably high, inflicting massive losses on the U.S. industry," said Dan Glickman, chairman and chief executive officer of the Motion Picture Association of America.