GENEVA — The U.S. and the European Union said in a World Trade Organization forum that more than 80 percent of counterfeits seized by Customs authorities at their borders came from China.
The transatlantic powers, backed by Japan, also complained of widespread abuse in China of patents and trademarks owned by foreign companies, and faulted the country’s poor enforcement of intellectual property rights.
U.S. Trade Representative Susan Schwab had said in Washington on Tuesday that in 2006, “81 percent of infringing items seized at the U.S. border were from China, up from 69 percent the year before that.”
“China can and must do better,” Schwab said. “The problem is one of enforcement.”
The U.S., in a document prepared for an annual review this week of China’s implementation of its WTO intellectual property rights obligations, said there have been “an increasingly large number of abusive trademark applications filed by unauthorized entities for other company’s recognized brands, particularly in the case of well-known brands and up-and-coming brands.”
The EU also weighed in with a long list of grievances and argued in a separate paper that despite a number of initiatives taken by China to improve the situation, “the level of counterfeiting and piracy, as well as effective enforcement, remain a matter of great concern.”
“Criminal prosecution remains ineffective,” the EU said. “Sanctions against infringements are insufficient to deter infringers.”
The EU put the spotlight on the rampant counterfeiting problem in China’s retail and wholesale markets, and complained that despite widespread infringements taking place on a daily basis, there is a lack of effective and consistent action taken against them.
The EU said its Customs statistics also showed a “dramatic increase in the number of counterfeit and pirated goods coming from China to its member countries.
“In 2006, 86 percent of the total counterfeit and pirated goods seized came from China,” said the EU, adding the counterfeiting and piracy problem in China “is growing faster in size and complexity than what the Chinese system, with the methods used, is able to deal with.”
In response, China provided a long list of measures introduced in 2006 and this year to stem the problem and beef up enforcement, and also provided statistics of investigations and criminal cases. In 2006, China noted, this included 2,277 criminal court cases involving intellectual property infringement, production of counterfeit and inferior goods. Last year, 33,900 cases of counterfeit goods were also investigated and dealt with, it said.
This story first appeared in the October 26, 2007 issue of WWD. Subscribe Today.