VZCZCXRO7728
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0494/01 1160854
ZNR UUUUU ZZH
R 260854Z APR 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6000
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 GUANGZHOU 000494 
 
SIPDIS 
 
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE 
STATE FOR EB/TPP MASSINGA, FELSING 
STATE PASS COPYRIGHT FOR TEPP 
STATE PASS USPTO FOR DUDAS, BROWNING, ANTHONY, WONG 
STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO 
USDOJ FOR SUSSMAN 
DHS/CPP FOR PIZZECK 
USPACOM FOR FPA 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KIPR ECON ETRD WTRO CH
SUBJECT: Guangdong IPR White Paper: Criminal Cases, Case Transfers, 
and Audio-Visual Campaigns 
 
REFERENCE: Guangzhou 376 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1. (U) SUMMARY: Guangdong's 2006 intellectual property rights (IPR) 
white paper cites specific efforts against infringement in the 
audio-visual industry, improved coordination between Customs and 
PSB, and four new IPR complaint centers for the public.  Guangdong 
courts concluded 113 IPR-related criminal cases and 2,778 civil 
cases in 2006 (compared with 94 and 3,316, respectively, in 2005). 
Guangdong authorities transferred 38 trademark cases to the police 
in 2006 (up from 17 in 2005).  Guangdong granted more patent and 
trademarks than any other province for the 12th consecutive year. 
END SUMMARY. 
 
Criminal and Civil Cases 
------------------------ 
 
¶2. (U) According to the 2006 IPR white paper, Guangdong courts 
concluded 113 criminal cases involving 221 individuals in 2005 
(compared with 94 cases and 232 individuals in 2005).  Guangdong 
courts concluded 2,778 IPR-related civil cases in 2006, more than 
any other province (down from 3,316 IPR-related civil cases in 
2005).  The report notes that 48 percent of IPR cases were settled 
through mediation. 
 
¶3. (U) In a pilot program begun in June 2006, the provincial 
government designated three courts to integrate criminal, civil, and 
administrative IPR cases.  Guangdong has also designated eight 
county-level courts to handle IPR civil cases in an effort to 
alleviate the workload of intermediate courts.  Guangdong has done 
more in both of these areas than any other province, according to 
the report. 
 
Administrative Cases and Case Transfers 
--------------------------------------- 
 
¶4. (SBU) The report states that Guangdong Intellectual Property 
Office (IPO) and Public Security Bureau (PSB) established an IPR 
Enforcement Liaison Office in 2006 to improve the transfer of cases 
from administrative to judicial authorities. 
 
-- The Guangdong Administration of Industry and Commerce (AIC) and 
Technical Supervision Bureau (TSB) investigated 2,358 trademark 
cases and transferred 38 cases to the PSB in 2006, up from 17 case 
transfers in 2005.  (In a March 14 meeting with a USTR-led 
delegation, a Guangdong TSB representative said case transfers have 
increased in part because local offices can receive monetary awards 
of up to RMB 2 million [USD 260,000] for doing so.) 
 
-- The Guangdong Cultural Bureau investigated 5,033 IPR cases in 
2006, transferring 541 to "other authorities" (it is unclear if 
"other authorities" include the PSB). 
 
-- The Guangdong Copyright Bureau investigated 1,907 IPR cases (47 
of which involved internet piracy) and transferred 36 cases to 
"other authorities" in 2006, down from 51 in 2005.  (In a separate 
report issued by the Guangdong IPO on April 25, one of the "Top Ten 
IPR cases of 2006" was brought by the Association of American 
Publishers against a website that illegally distributed one of its 
members' publications.  Guangdong Copyright closed the website and 
assessed an administrative penalty.  This was the only case 
involving a foreign company to be included in Guangdong's "Top Ten" 
list.) 
 
-- Guangdong IPO investigated 57 cases of patent infringement in 
¶2006. 
 
-- The Guangdong Quality Supervision Bureau investigated 2,205 IPR 
cases and transferred 41 to the PSB in 2006, up from 23 in 2005. 
 
-- The Guangdong Food and Drug Administration investigated 8,105 
cases and transferred 29 to the PSB in 2006. 
 
-- The Guangdong Department of Agriculture investigated 139 IPR 
cases in 2006. 
 
 
GUANGZHOU 00000494  002 OF 003 
 
 
Police Investigations 
--------------------- 
 
¶5. (SBU) The Guangdong PSB investigated 396 criminal IPR cases in 
2006, concluding 288 and arresting 806 suspects (the 2005 numbers 
were 426, 331, and 1,207, respectively).  Most of these cases were 
generated by the Mountain Eagle II campaign, which lasted from March 
to December 2006.  The report takes special note of cases in the 
cigarette, pharmaceutical, audio-visual, and cosmetics industries. 
(During the March 14 meeting with USTR, a Guangdong PSB 
representative noted cooperation with Pfizer and Proctor & Gamble in 
2006.) 
 
Audio-Visual and Software 
------------------------- 
 
¶6. (U) The report highlighted two campaigns targeting pirated CDs 
and DVDs in 2006: "Operation Sunshine" and the "100 Day Campaign." 
The PSB seized 11 illegal optical disc production lines in 2006 
(down from 15 in 2005) and arrested more than 40 people.  The 
Guangdong Cultural Bureau investigated 5,033 A/V-related cases and 
seized nearly 49 million pieces of pirated goods in 2006, including 
optical discs.  The Guangdong Cultural Bureau targeted its 
enforcement efforts on computer markets and electronics markets. 
Copyright and Cultural bureaus together investigated 7,888 cases, 
involving more than 75 million A/V products. 
 
¶7. (U) The report also notes a special campaign that took place from 
March to April 2006, led by local Cultural bureaus, which targeted 
A/V products that infringed on U.S. films.  The operation, which was 
coordinated with the Motion Picture Association, led to actions 
against more than 1,000 stores in Guangzhou and Shenzhen, according 
to the white paper.  Authorities fined 42 stores and revoked the 
licenses of nine others. 
 
¶8. (U) Regarding software legalization, the report states that all 
levels of government offices in Guangdong were using legal software 
by the end of 2006.  Copyright authorities focused legalization 
efforts on private enterprises in 2006, including SMEs. 
 
Customs 
------- 
 
¶9. (U) Guangdong Customs officials conducted 636 IPR-related 
seizures in 2006 (up from 521 in 2005), according to the white 
paper.  Five regional Customs offices set up special IPR divisions. 
During a six-month campaign targeting express-mail providers, 
Guangdong Customs made 130 seizures, including fake Nike, Chanel, 
and Nokia products.  Guangdong Customs improved coordination with 
the Guangdong PSB as a result of new national regulations; the first 
joint Customs-PSB case in Guangdong took place in March 2006 and 
four infringers were sent to prison for copying Motorola products. 
Guangdong and Hong Kong customs authorities conducted six joint 
enforcement operations in 2006 (down from nine in 2005) and jointly 
investigated more than 30 IPR cases. 
 
Trade Fairs 
----------- 
 
¶10. (U) According to the white paper, trade fairs were a priority 
area for IPR enforcement in 2006.  Guangdong IPO, AIC, and Copyright 
authorities staffed IPR complaint centers at a number of fairs. 
Authorities at the two sessions of the Canton Trade Fair in 2006 
handled 1,045 IPR complaints, up from 882 in 2005.  (In addition to 
Guangdong IPO, AIC, and Copyright, an official from the Guangzhou 
IPR Complaint Center [see below] was present at the April 2007 
Canton Fair, see septel.)  Other prominent trade fairs with IPR 
complaint centers highlighted in the report include those featuring 
lighting equipment, home decorations, automobiles, and furniture. 
 
IPR Complaint Centers 
--------------------- 
 
¶11. (U) Following on a national program, in 2006 Guangdong 
established IPR Complaint Centers in Guangzhou, Shenzhen, Shantou, 
and Zhanjiang to handle phone and e-mail inquiries from the public. 
The provincial-level Guangzhou center handled 18 IPR complaints in 
¶2006.  (During an April 17 visit to the center, staff said they had 
 
GUANGZHOU 00000494  003 OF 003 
 
 
handled 29 complaints from summer 2006 to April 2007, transferring 
all of them to relevant authorities, and answered an additional 70 
IPR-related inquiries.)  The hotline phone number is 12312. 
 
Patent and Trademark Applications 
--------------------------------- 
 
¶12. (U) The white paper states that Guangdong received more patent 
and trademark grants than any other province in 2006 for the 12th 
consecutive year.  It noted that Guangdong accounts for 10 percent 
of the country's invention patent granted.  For the sixth 
consecutive year, Guangdong companies received more "China Famous 
Brand" awards in 2006 than any other province.  Eight Guangdong 
products, including bacon, oranges, and black tea, were given 
geographic indication trademarks in 2006 (the same as in 2005), 
bringing the total to 22. 
 
GOLDBERG