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Intellectual Property Lines Sometimes Blurred

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Washington, DCChina has an even greater impact on North Americans than serving as a source for contaminated goods. Chinese hucksters and opportunists make off, together with their Asian counterparts, with up to $3.7 billion in 'lost' intellectual property, which is part of a basket of infringements that includes copyright infringement and copyright law.

CDs/DVDsBut the US has fought back, and recently won two out of its three claims in a landmark case against China's copyright and trademark protection regime.

The biggest bugaboo remains the piracy of films, branded goods and various other items of trademarked property that's openly available all over China and the Asian Pacific Rim. It's the bootleg factor, and bootleg is big business over there. It doesn't help that China violates World Trade Organization (WTO) rules in the denial of copyright protection for movies, books and music that have yet to be approved by state censors for legitimate sale in the Chinese market.

In other words, if you have a hankering for the latest Brad Pitt movie you'll have no problem finding a copy for a couple of bucks. No, the state censors have yet to approve it for legitimate sale. Are they taking their time? Delaying the process? Are they on the take from bootleggers? Mmmmm…. no matter. The movie is held up at the censor's office, while thousands of bootlegged copies of an unapproved movie are sold for much less than the original would fetch, and the Chinese government sits on its hands.

At least, that was the accusation.

The Intellectual Property Alliance is a coalition of US music, movie, book and software industry groups—and in their view that $3.7 billion loss in sales due to copyright infringement is a conservative figure.

The practice, "allows copyright infringers to profit at the expense of the legitimate right holder, without fear of being subjected to enforcement procedures and remedies for copyright infringement," the U.S. Trade Representative's office said in one of its documents filed in the case.

Another bone of contention centered on China's thresholds for bringing criminal prosecutions. The United States held that the threshold was simply too high. The panel, on this count, disagreed, citing that Washington failed to prove its claim. However, it appears Washington won that argument by default, given that shortly after the ruling was announced, China voluntarily dropped the threshold from 1000 down to 500.

What that means, is that you have to be caught with, or be suspected of selling 500 copies of pirated material where intellectual property and copyright have been violated in order to qualify for prosecution. Prior, that number was 1000.

Some would argue that even a handful, would be too high.

But Washington appears to have lost on the third complaint, and that centered on the disposal of counterfeit goods. The latter, in itself is a huge market. Fake designer bags, for example, bearing the appearance of a sought-after label that is in reality anything but the real McCoy, and with quality that is a mere shadow of the original.

The charge was that China was infringing on Trade-Related Aspects of Intellectual Property Rights (TRIPS) by permitting the auction of counterfeit goods once the bogus labels had been removed. However, the ruling panel found that on some points the TRIPS regulations did not even apply, and on the remainder the US had not conclusively established that China's conduct infringed the TRIPS regulations.

Still, two outta three ain't bad. And in such a globalized economy, with the ability to cut-and-paste just about anything (including goods, it seems…), the whole area of copyright infringement, copyright law and the protection of intellectual property is a new frontier that will never, ever be completely won.

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