WTO Launches Probe On China Distribution; Reviews Thai IP Policies

By William New
The World Trade Organization has launched an investigation into allegations that China is unfairly limiting the flow of copyrighted material from the United States into the country. Meanwhile, the WTO issued the periodic review of Thailand’s policies including a discussion of intellectual property rights.

US concerns in the new dispute are that China provides “less favourable distribution opportunities for imported films for theatrical release than for like domestic films,” and that it provides “less favourable opportunities for foreign suppliers of sound recording distribution services and for the distribution of imported sound recordings than are provided to like service suppliers and like products,” according to the initial US request to the WTO Dispute Settlement Body (DSB).

The panel’s formation was delayed about a week after a squabble over an item on the DSB’s agenda pertaining to the appointment of a Chinese national to the WTO Appellate Body. Taiwan objected to the appointment in relation to its sovereignty dispute with mainland China.

On Tuesday, the issue was resolved and the DSB held its meeting, with adoption of the panel request. The case, WT/DS363/5, was requested on 11 October. The final report should be completed in about six months.

There is a separate IP-related case filed by the United States against China, WT/DS362/7, for which a panel was formed on 25 September. In it, the United States alleges China has failed to provide “criminal procedures and penalties to be applied in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale that fail to meet certain thresholds” (IPW, WTO/TRIPS, 27 September 2007).

Meanwhile, Thailand’s trade policy review issued on 26 November included an analysis of its intellectual property provisions related to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Every country undergoes periodic reviews.

Thailand still has not acceded to several key international IP conventions and treaties but is working on it, the WTO said. It also cited efforts to build an IP framework and implement elements of the TRIPS agreement. On copyright and patent legislation it said there has been no change during the period under review.

The review also detailed without criticism Thailand’s use of compulsory licences to obtain cheaper versions of patented pharmaceuticals without the patent-holders’ approval. In addition, it cited concerns by authorities in “wiping out IPR violation,” but listed numerous actions taken in the area of enforcement. Nevertheless, it said that Thailand has “become apparently a transit/transhipment/smuggling point for infringing goods from other countries,” especially in Asia, due to “deficient border enforcement.” The review found a need for more resources for enforcement.

In a statement, US ambassador to the WTO Peter Allgeier praised Thailand for efforts to strengthen IP protection. But he said Thailand “has lost some ground” since the last review in 2003, with a “significant overall decline” in enforcement actions and an increase in piracy levels in the country.

“We believe that further comprehensive, coordinated and sustained efforts in this area are necessary to reverse this trend,” Allgeier said, adding a call for an update on any legislative, judicial or enforcement steps Thailand may be planning.

Allgeier did not specify US concern with Thailand’s issuance of compulsory licences, which it has acknowledged in the past are technically permissible under WTO rules.

China, Hong Kong Adopt TRIPS Public Health Amendment

In a separate development, at press time, China announced on 28 November that it had notified the WTO of its ratification of the 2005 public health amendment of TRIPS. The announcement followed Hong Kong’s notification a day earlier. The amendment waives a provision limiting the amount export of medicines produced under compulsory licences to nations lacking production capacity. With China there are now 13 countries that have adopted the amendment. The amendment will enter into effect when a sufficient number of members have ratified it, according to a WTO webpage on ratifications.

William New may be reached at wnew@ip-watch.ch.