By  on October 25, 2007

BEIJING — Instead of improving protection and compliance with international trade laws, China's violations of intellectual property rights may have worsened in some ways since the U.S. filed formal complaints on the issue with the World Trade Organization earlier this year, a U.S. official said Wednesday.

Jon W. Dudas, U.S. Commerce Department under secretary for intellectual property rights and head of the U.S. Patent Office, said the Chinese government has become notably less willing to engage in several productive, bilateral discussions about how to stem the country's costly and rampant counterfeiting of ideas, brands and other intellectual property.

Dudas, speaking to a group of American business leaders at a forum on the issue here, said the two sweeping complaints the U.S. Trade Representative filed with the WTO in April over China's intellectual property violations were "not intended to substitute for bilateral cooperation on a full range of IP issues.

"Rather, the WTO mechanism is supposed to help resolve specific disputes that have not been solved bilaterally," said Dudas. "However, since April, when the United States sought dispute settlement at the WTO over IP issues, our bilateral relationships without counterpart offices have suffered."

Meetings have been delayed and cancelled, and requests for new talks rejected, officials reported. In particular, China has rebuffed calls for a new meeting of the working group on IPR under the U.S.-China Joint Commission on Commerce and Trade. The commission was established by the Bush administration to create ongoing, top-level talks on key trade issues like IPR.

In April, the U.S. lodged two broad complaints with the global trade body against China over IPR. The first charged China maintains a legal system and lack of enforcement that allows widespread, unchecked counterfeiting and theft of intellectual property, costing American businesses billions of dollars each year. The companion complaint accused China's government of using its media censorship to enforce a system that promotes widespread piracy of films, music and other media. The legally protected versions are not allowed in for sale, but consumers can buy black market versions of just about anything.

After the cases were filed, China warned bilateral relations would suffer. In a speech a short time later, Vice Premier Wu Yi excoriated the U.S. over the cases and said American officials "totally ignored" the progress China had made in protecting patents and other intellectual property.Dudas said with the lack of cooperation on the issue, there is some creeping evidence the situation may be getting worse, rather than improving. Last year, he noted, 81 percent of the counterfeit goods that were seized in American ports were made in China. Global piracy has been estimated to cost American businesses $250 billion a year, with China being the origin of 70 percent of the world's counterfeited goods.

U.S. Ambassador to China Clark T. Randt said the issue is not only critical to American businesses, but key to China's economic future as it seeks to increase its own innovation. Without adequate legal protection to ownership, individuals are less likely to create new ideas and products.

"Intellectual property rights should be seen as benefiting everyone, including the Chinese," said Randt.

Dudas said communication between the U.S. and China IPR offices is not completely cut off. He noted several continuing areas of cooperation, including joint efforts with China's IPR office to cut its workload and make the patent process quicker and smoother.

Still, he urged China to return to the negotiating table through the platforms it has rebuffed since the cases were filed.

"The best way to resolve these differences...is through continued dialogue and deepened dialogue," Dudas added.

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