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Cablegate: South China Ipr: Rights Holders Call for "Ipr Summit" And

VZCZCXYZ0001
RR RUEHWEB

DE RUEHGZ #0720/01 3460934
ZNR UUUUU ZZH
R 110934Z DEC 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0061
INFO RUEHGZ/CHINA POSTS COLLECTIVE 0023
RUEHIN/AIT TAIPEI 0002
RUEAUSA/DEPT OF HHS WASHINGTON DC 0002
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC 0001
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0020
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0016
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC 0001
RUCNFB/FBI WASHDC 0001
RUEAIIA/CIA WASHDC 0023
RUEKJCS/DIA WASHDC 0023

UNCLAS GUANGZHOU 000720

SIPDIS

State for EAP/CM - SFlatt; EEB - JUrban
State for INL - JVigil
USTR for China Office - AWinter; IPR Office - RBae; and OCG -
SMcCoy
Commerce for National Coordinator for IPR Enforcement
Commerce for CIsrael
Commerce for MAC 3204/ESzymanski
Commerce for MAC 3043/McQueen
Commerce for MAC 3042/SWilson, JYoung
Commerce for NWinetke
LOC/Copyright Office - MPoor
USPTO for Int'l Affairs - LBoland, EWu
DOJ for CCIPS - MDubose
DOJ for SChembtob
FTC for Blumenthal
FBI for LBryant
DHS/ICE for IPR Center - DFaulconer, TRandazzo
DHS/CBP for IPR Rights Branch - GMcCray, PPizzeck
ITC for LLevine, LSchlitt


E.O. 12958: N/A
TAGS: ETRD KIPR ECON PGOV CH
SUBJECT: South China IPR: Rights Holders Call for "IPR Summit" and
More High Level Visits at Roundtable Discussion

REF: A) GUANGZHOU 132, B) 2007 GUANGZHOU 1241

1. Summary: Lax enforcement remains the key problem for intellectual
property (IP) rights holders operating in south China, according to
the 30 business and legal professionals at the Consul General's
December 2 IPR roundtable. Rights holders recommended that senior
Obama Administration IP officials visit IPR hotspots like south
China, as early as possible to see problems first-hand. Other
comments and suggestions ranged from the need for increased
transparency in the release of China's IPR enforcement data to the
specific request that Shenzhen Municipal government resume
cooperation with copyright owners whose optical discs have been
pirated and sold within the city's jurisdiction. U.S. rights
holders also proposed an industry-led IPR Summit with high-level USG
participation and a JCCT IPR Working Group meeting in south China.
These would help focus local attention on the need for solutions to
infringement problems. End summary.

Proposal for an Industry-led "IPR Summit" in South China
--------------------------------------------- -

2. Almost 30 business and legal professionals gathered to share
insights and exchange IP-related experiences at the Consul General's
2008 IPR Roundtable on December 2. A prominent Hong Kong-based
attorney who represents several Fortune 500 U.S. companies in south
China introduced the idea of USG support for organizing an
industry-led "South China IPR Summit." Participants heartily
supported the idea and said high-level USG participation would go a
long way toward attracting attention from provincial and local
government leaders and enhance a dialogue to better protect IP
rights. The conference could be held in Guangzhou or Shenzhen and
would ideally include high-level participation from the U.S. Patent
and Trademark Office, U.S. Coordinator for IP Enforcement, USTR,
Department of Commerce, Customs, Department of State and other
relevant agencies. Although industry would prefer to hold this type
of meeting as early in 2009 as possible, the Consul General Goldberg
suggested holding the conference in summer or fall to allow time to
plan for success.

Site Visits, JCCT IPR Working Group Meetings in South China
--------------------------------------------- -

3. Even as participants brainstormed ideas for an "IP Summit", other
rights holders emphasized that regardless of format or participants,
the most effective U.S. government contribution to south China IP
enforcement in 2009 would be high-level visits to Guangdong and
Fujian provinces by new IP officials to see the problems first-hand.
The visits could be independent of a specific event, or could be
tied to routine bilateral meetings like the JCCT IPR Working Group.


Too Little Transparency for IPR Enforcement Information
--------------------------------------------- -

4. One Guangzhou-based attorney who represents several major
international brands said many jurisdictions had significantly
improved dissemination of civil case results in recent years, but
improvement also highlighted the dearth of information stemming from
administrative and criminal IPR cases. Other participants also
expressed concern that reporting and disclosure of IP enforcement
information is erratic, with less transparency when agencies become

distracted by other issues (like the recent Melamine contamination
incident) or are exposed to increased scrutiny by media or foreign
governments. South China rights holders are currently discussing
industry-based solutions to the lack of transparency, but all
participants agreed that the best solution is for China's national
and local government leaders to release more information at all
levels and across all enforcement agencies.

Widespread Desire for Improved Legal System
-------------------------------------------

5. Rights holders reemphasized long-needed reforms in China's legal
system, including calls for better paid judges and prosecutors, more
movement towards specialized courts to handle both civil and
criminal IP cases, and fewer suspended sentences for convicted IP
infringers in criminal cases. Participants also said more staff and
other resources are critical for local IPR enforcement agencies like
Customs and the Administration of Industry and Commerce (AIC). One
attorney suggested a system of fee-based administrative tribunals
for handling routine cases and settling IP-related disputes that do
not meet legal thresholds for court cases. Participants agreed that
without these and other basic adjustments, enforcement problems
would continue.

6. Participants also voiced concerns about more specific IPR
enforcement issues, including the recent discovery of counterfeit
Blu-Ray optical discs in certain Chinese markets. Representatives
of entertainment industry rights holders called on the Shenzhen
government to resume direct cooperation on optical disc
investigations that had been suspended after the U.S. filed its WTO
cases. Rights holders said they would benefit greatly from a
resumption of access the Shenzhen government's special optical disc
forensics laboratory, as well as a commitment from the local Public
Security Bureau (PSB) to actively investigate Blu-Ray counterfeiting
operations. Another participant said all rights holders would
benefit if violators were held responsible for paying the
warehousing and destruction costs in cases where authorities seize
counterfeit items and assess penalties, a major change from current
practice in most Chinese jurisdictions. IPR enforcement at trade
fairs was also identified as a continuing problem area by many
rights holders, with one telling of consecutively suing an industry
trade fair over two years until the trade fair finally addressed
rights holder concerns in the third year for fear of being sued
again.

Comment
-------

7. It was clear from this exchange that IP enforcement continues to
exact high costs on U.S. rights holders operating in south China,
and they agree that problems can only be addressed by a combination
of sustained public and private efforts. Participants look forward
to working with the new administration and see 2009 as an
opportunity for senior officials to get the attention of local and
provincial leaders here on the need for better IPR enforcement. The
consulate will continue to engage local contacts, both U.S. and
Chinese, on new programs, like a Summit, and increase our capacity
building efforts as we raise the profile of IP matters throughout
the consular district.

GOLDBERG

© Scoop Media

 
 
 
 
 
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