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How the US Lost Its China Complaint On IP

An anonymous reader writes "The World Trade Organization yesterday released its much-anticipated decision involving a US complaint against China over its protection and enforcement of intellectual property rights. The US quickly proclaimed victory, with newspaper headlines trumpeting the WTO panel's requirement that China reform elements of its intellectual property laws. Yet the reality is somewhat different. As Michael Geist notes, the US lost badly on key issues such as border measures and criminal IP enforcement, with the international trade body upholding the validity of China's laws."

17 of 167 comments (clear)

  1. Communists don't believe in imaginary property... by gandhi_2 · · Score: 2, Interesting

    Do China's border measures, which allow customs officials to donate, auction, or sell to the rights holder confiscated goods, violate TRIPS?

    (FTFA)

    China can take your bootleg XP discs on grounds you pirated them...and then sell them? lolwut?

  2. the real problem is enforcement by Ritz_Just_Ritz · · Score: 5, Interesting

    I spend a great deal of time in China. The real crux of the problem is that there is a WIDE gulf between the law and enforcement of the law (unless it involves anti-government behavior...then the gulf narrows quickly).

    I can easily go to any one of hundreds of locations that I know of (and I'm a damn foreigner) in Beijing and buy openly pirated movies and software. Sure, it is illegal to sell that stuff per the law books, but the government just doesn't care. And when they make some noise about caring, it's VERY temporary, the press gets their story and photos, and then it's back to business as usual.

    Government officials are profiting directly from winking at this illicit trade so there's little incentive for those lower on the totem poles to rock the boat. It's not uncommon for the owner of one of these illicit DVD/CD fabs to bring in the relative of some party official in as a "silent partner" to keep the heat off. Welcome to China. Now be quiet and enjoy your 10RMB DVD (complete with fancy packaging and liner notes) that can be had in most subway stations and street corners in Beijing...er...roughly 7% of the price I'd pay at my local Best Buy for the same title in similar packaging.....

    1. Re:the real problem is enforcement by zappepcs · · Score: 4, Interesting

      There is the problem, full in your face style. No matter what trade agreements are agreed to, China is run differently internally than the USA or European Union countries. Going to the WTO is like asking a police officer to witness someone robbing your car all the while knowing that the police officer will not arrest the robber. I don't think anyone has a full grasp of what would happen if the US simply stopped doing business with China cold turkey style... So, this remains a problem.

    2. Re:the real problem is enforcement by Anonymous Coward · · Score: 5, Interesting

      Personally during my time in China, I liked the fact that DVD's were so cheap.
      From what I've heard, DVD companies initially tried selling DVD's in China for the same price they do in Western countries, and only the top business owners can afford that type of thing.
      China also has _far_ more problems that copyright infringement to get fixed first.
      During my time there as an English teacher, the boss I had (oh and this is at a school that is a business venture of a big foreign university!) took 150RMB off one of the Chinese girls that worked with me. She only got 1500RMB a month, often had to work 4 hours over time every day, and didn't get paid for it despite the law saying she should be.
      I went into my boss' office with a photocopy of the letter he'd given her saying he was taking 10% of her wages, because she had forgotten to sign her name in one day. Asked him what was up with it and got really pissed off at him, was close to walking out. I hate seeing others treated that way.
      I've thought about bringing this to the attention of the university that is in charge of the English school, but I doubt they'd do anything. It piss' me off that many institutions from rich countries criticize the treatment of workers in China, but go full steam ahead and exploit it themselves. Bloody hypocrites.
      I'm going to post this anonymously as at the moment I don't want to take any risks for when I go back there.
      Anyway, as I said, China has more issues to deal with than copyright infringement. Despite all the problems in China though, I recommend going there, I absolutely love the country, the food, and most of the people. If they could sort out the pollution problems I think it would be the most beautiful country on earth.

    3. Re:the real problem is enforcement by Sanat · · Score: 4, Interesting

      I was a visiting American Scientist during my prolonged stay in China and was the first American that many Chinese seen since the Chiang Kai-shek stuff from the 50's and 60's. I traveled some with the president of the American company where I worked (he was American Chinese) and so I had a lot of opportunities to explore many place that most Americans would not be admitted.

      I literally traveled from one end of China to another. I am rather a low key guy but because of my title then each Chinese providence would hold a banquet in my honor and so we would drink wu-shing pigu (5 star beer) and a clear liquor that I forget the name of but it was potent... anyway, I found the Chinese to be a most proper group of individuals and were good to their word... except if government was involved then they followed the ticket that was being trailed out... probably for self preservation.

      I really enjoyed the people and loved the environment... being raised originally on a farm in Ohio made me understand a lot more than if I was a city slicker. What I did find though was that the average person did what they had to do to get along in life. If it meant duplicating a song or a data file then it was not a problem for them... I must reiterate that their values were neither greater nor less than mine but rather that they did what they had to do to survive in the economy of that era.

      Sometimes I wish that I had transfered there permanently. My heart is very similar to that of the typical Chinese individual and they had a warmth that I find missing in today's life in America.

      --
      And in the end, the love you take is equal to the love you make
    4. Re:the real problem is enforcement by Detritus · · Score: 2, Interesting

      Right, the "Vast Western Conspiracy" to talk trash about China. That's the sort of thing I hear from Chinese students who have little experience with other societies.

      --
      Mea navis aericumbens anguillis abundat
    5. Re:the real problem is enforcement by sumdumass · · Score: 2, Interesting

      What he was saying is that it wouldn't matter because any real damage it caused the US would be echoed into the world economy and it would limit itself.

      Suppose you were the importer, when your US dollar buys three times as much US goods, you only need one third of them. When you holdings lose two thirds of their value, you don't have the money to spend on importing so the demand drops. China doesn't regulate it's dollar on the open market either. It's artificially set so it isn't apparent that they could play the money game where they attempt to profit by creating a scheme like that.

      Besides, the actual need for Currency is pretty much mute any more. Everything is done globally with electronic transfers that are honored by international banks. On the scales that exporters/importers operate on, they just find a multinational bank and don't worry about it as long as they keep funds on both sides. The conversions fees are even smaller if not waived for items like this. Only small time operators like tourists and novelty brokers needs to worry about currency conversions like you mentioned.

    6. Re:the real problem is enforcement by Rich0 · · Score: 2, Interesting

      And China would retaliate by selling all their US dollar bonds. You think the economic crisis is bad _NOW_?

      Doubtful - at least as more than a symbolic gesture.

      Those bonds have substantial value to the Chinese. If they have 100 billion dollars worth of US bonds they're almost certain to get 100 billion dollars in cash over the next few decades as they mature. If they sell the whole thing for a million dollars then they get a million dollars worth of various currencies now. As an added bonus they REALLY tick off the US government. It would make it harder for the US government to issue new debt for a while, but I doubt it would cause the sky to fall. If the US actually tightened its belt and stopped running a deficit then it wouldn't have any impact at all (granted, that kind of spending discipline would make economic recovery more difficult).

      What it might do is trigger a small war of some kind, which the Chinese are not equipped to fight (they have no deep water navy as yet - so all the fighting will be in their own territory). China has a huge army, but unless it plans to swim the bearing strait it doesn't really have any way to leave the country unless they plan on invading the Ukraine (and the former soviet states do NOT mess around). They might be able to invade Taiwan but even that would be iffy (a few subs could take out a lot of troop transports, and there isn't that much land to defend with hidden anti-air defenses). The US wouldn't be interested in actually siezing the country or anything (which would be crazy with the size of their army), but they could just drop lots of bombs on bridges or anything else with a military application and watch their economy grind to a halt. Simply blockading their ports would pretty much cripple their export-driven economy, and cut off their oil supplies as an added bonus (you could bomb the few overland pipelines very easily).

      This would never actually happen in real life - since everybody knows it isn't worth anybody's time to get into this kind of a mess. The US and China will continue to trade words while the rich guys making the money make sure the borders stay open.

  3. Quite fair actually by femto · · Score: 4, Interesting

    It seems quite fair to ask that the rights holder pay the cost of production if they choose to take possession the bootleg product, as they are then free to sell it for retail price. Why should the rights holder get a bunch of free product, which they would otherwise have to have paid to produce? If they rights holder doesn't want to retail the bootleg product themselves they can refuse to buy it.

    In this case the Chinese government seems to be ahead of the US in applying market principles..

    1. Re:Quite fair actually by sumdumass · · Score: 4, Interesting

      I think the problem isn't as much the IP holder not wanting to buy the counterfeit product back. For all intents and purposes, the product could be tainted in some way or carry a liability of some sort. The problem is that if it was wrong for the pirate to sell the material based on the lack of permission from the copyright holder, then it is still wrong for anyone else to do the same.

      You see, law enforcement isn't supposed to be making a profit from other people's crimes whether you agree with those crimes or not. And because the IP holder doesn't want to purchase them, doesn't mean they lose any right to them. Otherwise the cops could create a legitimate counterfeiting scheme where they find all sorts of counterfeit merchandise but never the pirates and thereby are guaranteed a profit by either selling them to the IP holder or the public at large. Market principles simply don't apply unless copyright law says something to the effect of "the creator or owner of the copyright has the exclusive control over distribution unless the cops find someone breaking the law". As far as I know, it doesn't and as far as I know, the exclusive rights are guaranteed by treaties which don't hold those provisions.

    2. Re:Quite fair actually by KDR_11k · · Score: 2, Interesting

      But is it right to force someone to buy something?

      --
      Justice is the sheep getting arrested while an impartial judge declares the vote void.
  4. Re:why bother about their laws being implemented by EdIII · · Score: 1, Interesting

    Nuclear escalation over imaginary property may be retarded, but so is the "my penis is bigger than your penis" argument that this has become.

    The U.S would not be remotely destroyed by China in a land war. In fact, I don't think they could take East LA without outnumbering the people there five to one.

    You cannot compare a police action against Iraq against an invasion from China. There are two different motives. One is complete destruction, the other is to force a regime change. China would have the same problems on U.S soil as the U.S has on Iraqi soil.

    It's a completely stupid argument anyways. The U.S could never start a land war against China, and China could never start a land war against the U.S. How on Earth could the U.S establish a beach head anywhere near China that the Chinese military could not obliterate within hours? Do you really think the U.S Navy has enough assets to throw against China to maintain a successful beach head to begin moving troops and assets in preparation for strategic operations against targets inland? Not in our wildest dreams. China does not have enough assets to do it either. High numbers of troops don't mean diddly crap when they are thousands of miles away from their targets.

    There is no way that either side can move that many troops uncontested across the Pacific Ocean. It's impossible, unless performed with absolute stealth. What then? 2 million Chinese against California where a considerable civilian population is armed? National Guard, Army, Marines, Air Force responding?

    I think you watched too much Red Dawn. The real challenges in moving assets, maintaining communication and supply lines, and overwhelming the opposition with numbers or technology are not just non-trivial, but damn near insurmountable for the U.S and China with respect to each other.

    The only option in a war between us would nuclear or economically based. We would need to destroy infrastructure and targets remotely. That would not last very long as both sides are pretty damn good at it.

    Furthermore, from the Chinese perspective they would only want our complete destruction if it came to it, which does not involve a land war. They have enough problems with their own people struggling against the government. They don't want the task of trying to oppress U.S Citizens and pushing their own political ideologies onto us. Hell, they have not even really done that with Hong Kong.

  5. Re:why bother about their laws being implemented by Snaller · · Score: 2, Interesting

    "These are agreements the US and China both entered into voluntarily."

    Of course its not the whole country who are behind this, its a tiny minority of (honest?) politicians who have signed this. A lot of people are against the ability to do a job once and then expect to get paid over and over for it again.

    --
    If Google really cared they would fix Android Chrome to reflow text, instead of discriminating
  6. Re:why bother about their laws being implemented by Cowmonaut · · Score: 2, Interesting

    In our defense, I don't think you should legislate morals. But that's all I can say I agree with. Removing a requirement to register your copyright, and mandatory copyright notices aren't a great idea IMO. Please note though, that in the case of TRIPS it wasn't just the US. Corporations generally don't belong to a country but will have a lobbying presence in many. Many EU nations and Japan are just as much to blame for TRIPS as the US and arguing otherwise just shows how biased you are.

  7. Re:Good by betterunixthanunix · · Score: 2, Interesting

    IP laws are the reason the GPL works.

    Seriously, with IP, the US would not be relevant in the global economy. IP is a major export from the US, and without it, we could not possibly sustain an economy based on producing goods in other countries.

    What is ridiculous is the tolerance the government seems to have for IP abuse.

    --
    Palm trees and 8
  8. It's a tad more complicated by SpeedyDX · · Score: 4, Interesting

    The way the U.S. Constitution is set up is quite unique with regards to international treatises and agreements. Once the U.S. enters into an international treatise, it is not only bound to act in accordance with the treatise in international relations, but the treatise also becomes a law of the land. And not only is it a law of the land, it is considered on par with other constitutional law, i.e., supreme over other laws.

    Because of this very unique structure (I am unaware of other major political players with similar constitutional provisions), the U.S. tends to have more of a vested interest in either trying to change the terms of an agreement so that it falls more in line with their own laws, or to abstain entirely from an international treatise (e.g., Kyoto).

  9. Re:Good by hedwards · · Score: 2, Interesting

    You mean: many people everywhere is guilty of violating them, esp. in countries where the cost of software is a much greater proportion of income than in developed countries.

    So then it's OK for the developed world to subsidize software that people don't really need in the first place?

    The Chinese government currency manipulates to take American jobs, invest in the US to avoid paying it's workers a decent wage, and somehow they're entitled to free ride on my purchases.

    I'm sorry, I'm not really seeing the justification. I could sort of understand if it were something like medicine or the means to grow food, but this is a set of items that for the most part can be replaced and are definitely not vital to life.

    And for non-China countries, there's still that last paragraph. I'm not sure what the point of pirating software is when there are more pressing things to do, and software programs for free that do just fine.