The Honeymoon is Over: Evaluating the United States' WTO Intellectual Property Complaint Against China
78 Pages Posted: 23 Sep 2008 Last revised: 5 Dec 2014
Over the last two decades, the United States and the People's Republic of China have engaged in extensive negotiations regarding China's protection of intellectual property rights (IPRs). To date, the countries have entered into at least four substantive agreements detailing China's commitments and obligations to enforce IPRs. Unfortunately, these commitments have not led to significant improvement in China's enforcement and rampant piracy continues unabated. When, in 2001, China finally acceded to the World Trade Organization, which included the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS), many hoped that China would finally fulfill its international obligations to protect intellectual property rights. Indeed, the United States initially refrained from taking any overt action against China for the next few years. The United States signaled this honeymoon period was over in April 2007 when it filed a controversial WTO complaint against China. The complaint charges China with violating its obligations under TRIPS to provide adequate protection for and deterrence against infringing intellectual property rights.
The United States' action is at both understandable and questionable. It is understandable as the United States has arguably exhausted all diplomatic measures to resolve this issue. Every agreement since the late 1970s has been breached, and even though implementation of specific laws has improved, there has been no concomitant enforcement. This is unacceptable. On the other hand, the United States' action is questionable because it is not clear what, if anything, the United States will gain by filing the complaint. If the United States is successful, China will be required to amend its laws to strengthen criminal sanctions against infringers. This, however, does no more than add additional potentially more stringent laws to China's other intellectual property laws. More pointedly, China would not be compelled to actually enforce these new laws. China's ability and will to enforce these laws will remain an issue.
The United States' action might be rational if part of a larger strategy to steadily strengthen China's relevant legal protection before moving to the next level of adequate and effective enforcement. Viewed in this light, the United States' efforts here may simply be an intermediary stage of IPR enforcement. The action might also be seen as a last resort, still not furthering dispute settlement, but as a means to force negotiation and diplomacy, including concessions in areas other than IPRs enforcement. Under either scenario, the United States has much to lose if it does not prevail.
Keywords: Intellectual Property (IP), International IP, Dispute Settlement, WTO, TRIPS, World Trade Organization, Trade-Related Aspects of Intellectual Property Rights, Criminal Procedures, IPRs, IP Enforcement, Piracy, Infringement, Copyright, Trademark
JEL Classification: K14, K33, K39, K42
Suggested Citation: Suggested Citation