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FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3567
INFO RUEHCN/AMCONSUL CHENGDU 8816
RUEHGZ/AMCONSUL GUANGZHOU 3649
RUEHGH/AMCONSUL SHANGHAI 8678
RUEHSH/AMCONSUL SHENYANG 8469
RUEHHK/AMCONSUL HONG KONG 9839
RUEHIN/AIT TAIPEI 6734
RUEHKO/AMEMBASSY TOKYO 1674
RUEHUL/AMEMBASSY SEOUL 0423
RUEHMO/AMEMBASSY MOSCOW 8852
RUEHGV/USMISSION GENEVA 2030
RUEAHLC/DHS WASHDC
RUCPDOC/USDOC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMCSUU/FBI WASHINGTON DC

UNCLAS SECTION 01 OF 14 BEIJING 007192 
 
SIPDIS 
 
State for EAP/CM - JYamomoto and EB/IPE - EFelsing 
State for INL - JVigil 
USTR for China Office - AWinter; IPR Office - RBae; 
and OCG - SMcCoy 
Commerce for National Coordinator for IPR Enforcement 
Commerce for CIsrael 
Commerce for MAC 3204/LRigoli, ESzymanski 
Commerce for MAC 3043/McQueen 
Commerce for MAC 3042/SWilson, JYoung 
Commerce for NWinetke 
LOC/Copyright Office - MPoor 
USPTO for Int'l Affairs - LBoland, EWu 
DOJ for CCIPS - MDubose 
DOJ for SChembtob 
FTC for Blumenthal 
FBI for LBryant 
DHS/ICE for IPR Center - Dfaulconer, TRandazzo 
DHS/CBP for IPR Rights Branch - GMacray, PPizzeck 
ITC for LLevine, LSchlitt 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON WTRO PGOV CH
SUBJECT: CHINA/IPR: AMBASSADOR'S SIXTH IPR ROUNDTABLE 
 
Summary 
------- 
 
¶1. (SBU) On October 23-24, the China Mission held 
Ambassador Clark T. Randt, Jr.'s Sixth Annual 
Roundtable Discussion on Intellectual Property Rights 
(IPR) in China, with the theme "IPR Protection on the 
Ground - What the United States Embassy is Doing to 
Support Rights Holders in China, and What Can we be 
Doing Better?"  The event focused on how, in the 
context of a chilly post-WTO case filing environment 
for bilateral engagement on IPR, the United States 
Mission to China and DC-based agencies can provide 
practical support for intellectual property rights 
protection and enforcement efforts and can more 
closely align priorities with industry.  The theme was 
selected in order to address practically the 
challenges posed by China's complex IPR environment, 
to line up increased United States Government 
resources with industry needs, and to find new ways to 
engage China at a time when many avenues for formal 
dialogue are blocked.  Keynote speakers included 
Ambassador Randt, Commerce Undersecretary Jon Dudas, 
and Commerce General Counsel John Sullivan.  Attendees 
included more than 250 lawyers, trade association 
representatives, company representatives, academics, 
and United States Government officials.  Each panel 
offered specific recommendations, focused primarily on 
China's legislative reforms, capacity building in the 
judiciary, and increasing enforcement resources.  End 
Summary. 
 
China-based Industry Actively Engaged on IPR 
-------------------------------------------- 
 
¶3. (SBU) In the first panel, "China-Based Industry 
Overview And Directions The Embassy Should Take on 
Intellectual Property Rights," major industry 
associations provided overviews of their initiatives 
in China and recommended to Embassy officials how to 
engage with the Chinese government on intellectual 
property rights issues.  First, Senior Director of the 
Greater China United States Chamber of Commerce, 
Jeremie Waterman, summarized current Chamber efforts 
to cultivate national and local level IPR 
interlocutors in China to support members' industrial 
policy concerns.  He highlighted recent submissions on 
patent and trademark law revisions, and cooperation 
agreements with provincial governments in Jiangsu and 
Guangdong, adding that IPR-related WTO cases filed in 
April appeared to have little impact on these 
activities. 
 
¶4. (SBU) Next, Caterpillar (China) Investment Company 
Chairman Richard Lavin spoke on behalf of the American 
Chamber of Commerce.  He outlined AmCham's business 
outreach and government advocacy efforts on IPR issues, 
 
BEIJING 00007192  002 OF 014 
 
 
including nearly a dozen events in 2007.  Among them 
were a successful Embassy/AmCham series of practical 
"how to" programs, an annual white paper, and the 
Chaoyang Initiative, initiated with Embassy support, 
aimed at establishing a model anti-copyright, 
infringement- and piracy-free zone in Beijing's 
eastern Chaoyang District.  Finally, Senior IPR 
Counsel for General Electric Company Asia and Chairman 
of the Quality Brands Protection Committee, Jack Chang, 
described efforts to disrupt criminal networks as 
important "firefighting" work, but said that there 
should be greater focus on more fundamental "fire 
prevention:" raising public awareness and improving 
infrastructure and internal business processes in 
China. 
 
Recommendations from China-Based Industry 
----------------------------------------- 
 
¶5. (SBU) Waterman articulated several recommendations 
for the Embassy: appoint a Minister Counselor-level 
representative for IPR efforts; increase coordination 
of government and industry input on legislative 
reforms; increase involvement in coordination of 
judicial and other training projects; expand outreach 
efforts to Washington, DC officials, including 
Congres; increase cultivation of upand-coming 
Chinese officials and academics; increase support for 
small- and medium-sized enterprises; engage Chinese 
IPR owners; collect and disseminate statistics on IPR 
protection, enforcement, and licensing; strategically 
use consulates in creative IPR programming; and 
provide support for licensing and enforcement on the 
Internet.  Waterman also raised recommendations for 
the broader United States Government, including 
increased public-private partnerships; a more robust 
and direct private sector role in the Joint Commission 
on Commerce and Trade (JCCT) IPR Working Group; long- 
term budgeting for sustained, multi-year engagement on 
IPR issues; increased coordination of technical 
assistance (particularly with police and customs); 
stronger incentives for interagency cooperation within 
the United States Government; mobilization of 
international organizations such as the World 
Intellectual Property Organization (WIPO) and World 
Customs Organization (WCO) for training assistance and 
funding; an increased role for law enforcement in 
coordinating with rights holders; and an increased 
level of dialogue with like-minded partners, including 
the EU and Japan. 
 
¶6. (SBU) Chang said the Embassy should encourage China 
to set up cross-functional research offices that 
involve public and private stakeholders; provide data 
on the implementation of the "Shanghai Initiative" to 
authorize initiation of criminal investigations based 
on a probable cause standard rather evidence of actual 
 
BEIJING 00007192  003 OF 014 
 
 
criminal activity; share seizure information of 
exporting ports and free trade zones; prosecute 
importers and distributors of IPR infringing goods; 
and share best practices with China.  He also urged 
the United States to list counterfeit and pirated 
goods as prohibited items on United States Customs 
entry and exit forms, and to encourage China to do the 
same.  Chang also requested Embassy support for 
Article 80 of the draft trademark law, requiring OEMs 
for branded goods to verify trademark ownership, and 
holding them liable for infringement.  He also 
encouraged China to translate critical information on 
its trade websites into English, and to set up a 
mechanism to measure progress on IPR issues.  He 
concluded by saying that the United States should give 
China credit for improvements it has achieved, but to 
remain focused on problem areas. 
 
Pharmaceutical Industry Concerned about Bulk Chemicals 
--------------------------------------------- --------- 
 
¶7. (SBU) To conclude the first session, Research and 
Development-based Pharmaceutical Association Committee 
(RDPAC) Managing Director, Jeffrey Schultz, and 
GlaxoSmithKline representative Dr. Bill Tyrrell 
discussed issues of concern to the pharmaceutical 
industry, including data exclusivity, patent linkage, 
and the counterfeiting and sale of bulk active 
pharmaceutical ingredients (API).  Chinese regulations, 
Schultz said, protect undisclosed data against "unfair 
commercial use" for six years; however, regulatory 
loopholes in the drug registration process make data 
indirectly accessible to domestic generic companies. 
On counterfeiting and sale of API, he said RDPAC has 
partnered with MOFCOM and MORO to form a multi- 
ministerial task force to enhance regulatory control 
and enforcement of the problem.  Tyrrell noted that a 
patent linkage system and the ability to get 
preliminary injunctions are imperative to protecting 
the company's investments against competing generic 
producers. (Note: Tyrell's comments were made in the 
aftermath of a significant recent loss at the courts 
for a Japanese pharmaceutical company involving patent 
linkage.  End Note.) 
 
Recommendations from Pharmaceutical Industry 
-------------------------------------------- 
 
¶8. (SBU) Schultz encouraged the Embassy to ensure that 
data exclusivity and patent linkage remain on the 
agenda for discussion with the Chinese; to develop 
multiple constructive channels for dialogue not 
limited to the IPR elements of the JCCT and SED, 
including the pharmaceuticals working group under the 
JCCT; and to position IPR in such a way that the 
United States appears "more engaged and less 
critical."  He added that the United States Food and 
 
BEIJING 00007192  004 OF 014 
 
 
Drug Administration should increase cooperation with 
China's State Food and Drug Administration, and that 
China should be trained and encouraged to use the 
Orange Book system as a model for the development of a 
self-regulated patent linkage system.  Schultz added 
that the patent law should be changed to empower 
courts to hear infringement cases even before drugs 
are on sale ("patent linkage") and to enable 
innovators to challenge drug applicants engaged in 
registering infringing products with the SFDA at an 
early stage. 
 
High Piracy Rates in IT and Copyright Industries 
--------------------------------------------- --- 
 
¶9. (SBU) In the second part of the first panel, United 
States Information Technology Office (USITO) Managing 
Director Greg Shea and International Intellectual 
Property Alliance (IIPA) President Eric Smith led 
panel discussions and offered their suggestions on how 
the Embassy might improve engagement on IPR issues in 
China.  Panelists raised concerns including the poor 
quality of Chinese patents and inadequate patent 
examination mechanisms; increasing Internet piracy; 
lack of reliable statistics on administrative 
compliance; and the lack of adequate criminal 
enforcement.  Copyright industry representatives said 
there has been little improvement in combating piracy, 
with the exception of business software.  They 
credited the lack of an effective enforcement model 
with piracy rates that he said continue to hover 
between 80 and 90 percent. 
 
Recommendations from IT and Copyright Industries 
--------------------------------------------- --- 
 
¶10. (SBU) Information technology and copyright 
industry panelists agreed unanimously that effective 
enforcement and increased awareness are both critical 
to improving China's IPR environment.  They said the 
Embassy should continue to engage the Chinese 
government at all levels to raise awareness, improve 
IPR protection education, and remind visiting United 
States Government officials from additional agencies, 
such as the Department of Labor, Department of 
Education, and Congress to raise IPR issues with their 
Chinese counterparts on such matters as non- 
competition and trade secret protection, textbook 
piracy, and legislative reform, respectively. 
Panelists also encouraged the China Mission to engage 
provincial governments on IPR.  Specific suggestions 
included maintaining an expert on criminal enforcement 
at the Embassy; raising the Embassy IPR Attache 
position to the rank of Minister Counselor; funding 
programs to motivate Chinese authorities to track 
cases and outcomes; creating specialized Internet task 
forces within local governments; and engaging 
 
BEIJING 00007192  005 OF 014 
 
 
academics and university students on the need for 
increased IPR protection. 
 
Enforcement Remains Greatest Weakness 
------------------------------------- 
 
¶11. (SBU) The second panel, "Trends In Intellectual 
Property Enforcement and Suggestions for United States 
Government Support or Involvement" included reviews by 
copyright, pharmaceutical, and agriculture industry 
representatives of specific infringement cases, and 
also provided suggestions for increased Embassy 
engagement.  Participants were unanimous in their view 
that, ultimately, enforcement remains the most 
important barrier to an improved IPR environment in 
China, as evidenced by rules and regulations that are 
frequently issued without any effect.  Motion Picture 
Association (MPA) Senior Vice President Mike Ellis and 
International Federation of Phonographic Industries 
(IFPI) Regional Counsel Benjamin Ng both detailed the 
increasing threat their industries face from the 
Internet, especially peer-to-peer (P2P) networks and 
Internet cafes, which they described as hubs of IPR 
infringement in China.  They identified as a central 
problem a lack of sufficient resources to monitor the 
huge and growing number of infringing websites. 
 
Industry Recommends Increased Manpower, Litigation 
--------------------------------------------- ----- 
 
¶12. (SBU) Ellis suggested the Embassy continue to 
encourage the National Copyright Administration of 
China (NCAC) and the Public Security Bureau (PSB) to 
increase their manpower, and to create professional 
exchanges to develop the technical capacity of Chinese 
law enforcement officers and judges.  Ng recommended 
that NCAC guidelines for cease and desist notices for 
Internet infringements be streamlined, and that 
notices should be followed by civil litigation.  He 
added that Embassy financial assistance and training 
would both be effective tools. 
 
Eli Lilly Sees Progress, but Challenges Remain 
--------------------------------------------- - 
 
¶13. (SBU) Eli Lilly and Company Patent Counsel Soonhee 
Jang agreed that, despite progress in promulgation of 
rules and regulations and increased transparency, gaps 
remain in enforcement statutes and procedures, and due 
process and judicial independence ae important 
impediments to IPR protection.  Se noted that China 
ranked fourth globally in the total number of patent 
litigation from 1997 to 2006, and that only 10 to 20 
percent of those cases involved foreign companies. 
 
Technical Assistance Recommended for Judiciary 
--------------------------------------------- - 
 
BEIJING 00007192  006 OF 014 
 
 
 
¶14. (SBU) Jang recommended that the Embassy support 
public outreach on IPR, and specifically supported the 
Embassy's ongoing outreach to the media to improve 
public relations for United States rights holders on 
IPR as well as public diplomacy in this area.  She 
also encouraged programs to address China's systemic 
impediments to IPR enforcement, including a lack of 
experience and capability in judges; preliminary 
injunctions in patent infringement cases; the lack of 
a national specialized appellate IPR court; lack of an 
evidence code; corruption and local protectionism; 
legislative issues affecting civil procedures; and 
local protectionism.  Jang specifically identified a 
case where a preliminary injunction had been granted 
to a United States company, but thereafter the court 
made a finding of no infringement, and Jang said that 
compensation is now being sought against the United 
States company on the basis of a vaguely worded 
statute.  She said such cases, if lost, may suggest a 
slackening in China's efforts to protect IPR. 
 
Concern over Shipments of Harmful Fertilizers 
--------------------------------------------- 
 
¶15. (SBU) Representing Crop Life China, DuPont's 
Elizabeth Lam addressed the concerns of the 
agricultural industry, and said that products sold may 
differ from their labeling, and generic brands may be 
mislabeled and falsely sold as name-brand products. 
In addition, Lam mentioned that confiscated 
agricultural products are often channeled back to 
dealers for resale; there is a high rate of repeat 
offenders; a general lack of respect and coordination 
among Chinese government agencies; promotion of patent 
infringing products; and an increase in the number of 
hidden and mobile counterfeit producers.  Crop Life's 
D'Arcy Quinn discussed a case involving several tons 
of bulk counterfeit product that was delivered to the 
Ukraine from China and suggested that a possible 
solution to this problem involved regulations 
regarding international shipments of hazardous goods 
that would require the goods be returned to their 
sender. 
 
¶16. (SBU) As a solution, Lam suggested that the 
Embassy engage more frequently with relevant Chinese 
government ministries; emphasize personal safety; 
increase education efforts; participate in joint 
training of customs agents; and enhance penalties for 
piracy and counterfeiting.  (Note: Crop Life has 
separately distributed a position paper on its issues 
in Washington, DC and in China.  End Note). 
 
Case Studies: IPR Protection Successes in China 
--------------------------------------------- -- 
 
 
BEIJING 00007192  007 OF 014 
 
 
¶17. (SBU) The Roundtable's third panel, "Illustrative 
Cases - Ways to Protect and Enforce IPR in China," 
featured case studies presented by Nike, the EU 
Mission to China, Anheuser-Busch, and the Business 
Software Alliance.  Each described how local 
conditions have impacted their ability to protect IPR. 
For example, panelists cited the inability of 
landlords of Chinese markets to enforce lease 
agreement provisions that assess penalties for tenants 
who violate IPR laws on the landlords' premises.  In 
addition, they described loopholes in commercial 
regulations that prevent authorities from revoking 
business licenses of IPR infringers and prevent 
authorities from shutting down websites that deal in 
counterfeit and infringing products. 
 
Recommendations for More IPR Enforcement Success 
--------------------------------------------- --- 
 
¶18. (SBU) Common recommendations from panelists 
included continued engagement on basic legal reform in 
China so that commercial laws and regulations are 
enacted with fewer loopholes and are more consistently 
enforced across the country.  For example, they 
suggested that the United States continue to press 
China for a law or regulation that provides a standard 
for law enforcement or court authorities to assess the 
value of counterfeit and infringing products.  This 
type of system, they explained, is critical to 
prosecuting IPR infringement cases uniformly across 
legal jurisdictions.  Panelists also recommended 
increased Embassy coordination with China's law 
enforcement and customs authorities to help encourage 
more consistent enforcement of IPR standards, 
including affirming positive steps the Chinese 
government takes.  They noted that sharing more 
detailed United States Customs information on seizures 
would help companies and origin countries like China 
better target infringing shipments before they arrive 
at United States borders. 
 
Legislative Reform and the Future of IPR in China 
--------------------------------------------- ---- 
 
¶19. (SBU) Department of Commerce General Counsel John 
Sullivan began the fourth panel, "IPR Directions for 
the Future - Legislation and National IPR Strategies 
and United States Government Support," with remarks 
highlighting the connection between the rule of law 
and a strong IPR protection and enforcement regime. 
The theme was elaborated within the panel discussion, 
which included representatives from Rohm and Haas, the 
International Trademark Association, GE/NBC Universal, 
the International Anti-Counterfeiting Coalition, the 
American Seed Trade Association, and Acushnet. 
Panelists provided insight into the status of China-s 
current legislative reforms in the area of patent, 
 
BEIJING 00007192  008 OF 014 
 
 
trademark, copyright, plant variety protection, 
criminal law, and civil law reform. 
 
¶20. (SBU) In introducing the panel, Mission Senior IPR 
Attache noted that, among the various areas of IPR law 
currently under revision, China-s patent law is the 
most ripe -- it is currently under examination at the 
State Council for Legislative Affairs Office (SC/LAO), 
and a new draft is expected to be passed to the 
Standing Committee of the People-s Congress and issued 
in early 2008.  With regard to trademark law reform, 
China-s Trademark Office has reviewed a second draft, 
which has been submitted to the State Administration 
for Industry and Commerce (SAIC).  The public comment 
period ended on October 31, 2007, after which it will 
be submitted to the SC/LAO around the end of 2007. 
Following review by the SC/LAO, the trademark law is 
likely to be submitted to the Standing Committee of 
the People-s Congress by the end of 2008.  Finally, 
China-s copyright law is also under review, and a 
group of academic experts will prioritize issues and 
conduct a preliminary study of needed reforms; however, 
no draft has yet been released. 
 
¶21. (SBU) Panelists raised several concerns on patent 
issues, including: procedures for infringement and 
invalidation; patent quality for design patents; first 
filing and foreign filing license requirements; 
service inventions and remuneration; the scope of 
patentability -- software, "bolar" exemptions, and 
patent linkage; biodiversity and genetic resource 
disclosures; and compulsory licensing.  On trademark 
issues, concerns included: cancellation of relative 
ground examination; conflict between trademark system 
and conflicts with China's sui generic geographic 
indication (GI) regulations; protection of well-known 
mark and famous mark; compulsory destruction of 
infringing/counterfeit goods; definitive removal of 
infringing/counterfeit goods; and continuing pending 
problems. 
 
¶22. (SBU) On the topic of plant variety protection, a 
panelist representing the American Seed Trade 
Association said there is currently discussion within 
the Chinese legislative structure on the need for 
patent protection for plant varieties.  While there 
are no immediate indications that such legislation 
will be introduced, there have been some informal 
indications that China may consider accession to 
International Union for the Protection of New 
Varieties of Plants '91 (UPOV).  Paul Schmidt, 
appearing on behalf of the International 
Anticountefeiting Coalition, and Jason Yao 
representing QBPC discussed criminal law reform and 
civil procedure law reform.  With regard to the former, 
they said there were recently open discussions on the 
amendment of Articles 217 & 218 (relating to 
 
BEIJING 00007192  009.2 OF 014 
 
 
copyright); however, discussions of a formal amendment 
have not materialized.  Further, while the civil 
procedure law has been revised, panelists reported 
that the People's Congress recently rejected a second 
revision of the legislation, calling for an expanded 
scope of existing provisions.  The third draft has not 
yet been released. 
 
How to Engage on Legislative Reform in China 
-------------------------------------------- 
 
¶23. (SBU) Panelists welcomed United States Government 
efforts to date to provide official comments on 
Chinese legislation under reform.  Many encouraged 
more direct dialogue between China's National People's 
Congress and the Hill.  They also offered suggestions 
for Embassy officials to continue supporting their IPR 
concerns in China, including: support for legislative 
reform and efforts to strengthen the rule of law in 
China; further engagement with relevant Chinese 
government entities to provide input and support on 
legislative reforms.  ASTA specifically recommended 
more robust inclusion of life sciences technology 
issues in discussions on innovation in the Strategic 
Economic Dialogue.  QBPC advocated addressing civil 
procedure law reform more aggressively in the near 
future and supported a proposed visit of the Court of 
Appeals for the Federal Circuit to China, as well as 
other initiatives for greater judge-to-judge 
interaction on procedural issues.  They also said more 
focused engagement with academics would be useful for 
certain earlier stage legislative issues, such as 
copyright law reform.  Other suggestions included: 
encouraging engagement with other countries that have 
sound IPR regimes; coordination with EU IPR programs; 
cooperation with local industries; interfacing with 
media; and engaging WIPO. 
 
 
Innovation, Antitrust, and Market Access in China 
--------------------------------------------- ---- 
 
¶24. (SBU) The fifth panel, "China's Industrial and 
Intellectual Property Policy: How This Affects United 
States Companies and How the Embassy Should Respond," 
included panelists from law firms Covington & Burling 
and O'Melveney & Meyers, Motorola, the International 
Intellectual Property Alliance (IIPA), the Motion 
Picture Association (MPA), and the International 
Federation of Phonographic Industries (IFPI).  First, 
in a discussion of self-reliant innovation and IPR 
protection in China, Martin Hansen of Covington & 
Burling said that there has been some progress in the 
area of innovation, including China's recognition of 
the linkage between R&D and innovation; recognition 
(to some degree) of the linkage between IPR and 
innovation; and recognition of the need to provide 
 
BEIJING 00007192  010 OF 014 
 
 
incentives to invest in R&D.  However, he said that 
challenges remain because China generally fails to 
fully appreciate the importance of market-based 
incentives. 
 
¶25. (SBU) Next, Nathan Bush of O'Melveney & Meyers 
discussed the relationship between IPR and antitrust, 
focusing on the recently promulgated anti-monopoly law, 
expected to take effect August 1, 2008.  Bush said the 
legislation allows room for either convergence or 
collision with international best practices, and that 
successful convergence will depend on the resources, 
competence, motives, and clout of enforcement agencies. 
While the anti-monopoly law does not fully address IPR, 
Bush said the Chinese government has announced plans 
to issue IPR guidelines for enforcement officials, 
which should be a focus of USG efforts.  Motorola 
representative Kirk Dailey then addressed China's 
technology transfer policy, and spoke extensively on 
patent licensing.  He said that Motorola has been 
licensing GSM and CDMA IPR since the early 1990s, but 
that progress has been slow in licensing discussions 
with several Chinese government entities and companies. 
He said many licensing activities are only undertaken 
following litigation. 
 
¶26. (SBU) Finally, MPA and IFPI discussed market 
access issues in China, particularly China's 
problematic protracted content review process, which 
they said prevents the development of a strong, 
legitimate market.  For example, they noted that the 
review process of a single video game title can take 
up to 18 months, during which time pirated software 
copies and domestic competitors gain market share. 
Copyright industry speakers also raised problems 
relevant to print publishing, where restrictions 
currently exist on publishing, printing, importing, 
and distributing books and journals into China.  They 
said such restrictions increase costs (and prices) and 
keep foreign publishers from serving customers 
efficiently. 
 
How to Address Chinese Industrial Policy 
---------------------------------------- 
 
¶27. (SBU) Hansen suggested the United States assist 
Chinese authorities to recognize that market-based 
approaches to innovation are in China's own self- 
interest, and that the Embassy should urge consistent 
support for key innovation principles, such as non- 
discrimination, standards, and transparency.  Motorola 
requested better Embassy advocacy in IPR negotiations 
over issues such as licensing, as well as assistance 
in facilitating industry discussions with the Chinese 
government on improved IPR remedies such as 
enforceable injunctions and extended statute of 
limitations periods.  (Note: The China Mission 
 
BEIJING 00007192  011 OF 014 
 
 
responded that it was already extensively engaged on 
issues involving statutes of limitations, estoppel, 
and laches, and that an official in the Foreign 
Commercial Service supported intellectual property 
licensing from the United States.  End Note.)  The 
copyright industries recommended that the Embassy 
engage China's General Administration of Press and 
Publication (GAPP) and Ministry of Culture (MOC) to 
unify, simplify, and speed up the censorship approval 
process.  They also requested support for direct 
engagement with Chinese universities and the Ministry 
of Education regarding textbook procurement. 
 
View from Washington: IPR Challenges in China 
--------------------------------------------- 
 
¶28. (SBU) In the final panel of the Roundtable, "The 
View from Washington: IPR Policy and the Role of 
Rights Holders in Dealing with Challenges in China," 
United States Government representatives working on 
IPR issues shared their views of the current 
environment in China.  Deputy Assistant United States 
Trade Representative Audrey Winter gave an update on 
the status of the two WTO cases filed against China in 
April, emphasizing that the United States Government 
does not believe the WTO dispute process precludes 
continuing cooperation with China on IPR protection. 
Susan Tong from the United States Patent and Trademark 
Office (USPTO) briefed the audience on USPTO's current 
China initiatives, including examiner exchanges, a 
work sharing pilot, and an exchange of automation 
experts with the State Intellectual Property Office 
(SIPO) include.  She said that, following successes 
with SIPO, USPTO has more recently begun similar 
initiatives with China's Trademark Office. 
 
¶29. (SBU) Panelists held a uniformly positive view of 
cooperation trends in law enforcement, both between 
the United States and Chinese agencies and within the 
United States law enforcement community.  For instance, 
Department of Justice IPR Task Force Executive 
Director Mark Grider highlighted the success of 
Operation Summer Solstice, which resulted in the 
arrest of 25 suspects, closure of six manufacturing 
and distribution facilities, and seizure of USD 7 
million in assets.  He also noted a Department of 
Justice-sponsored conference in Bangkok aimed at 
forming an IPR enforcement network with other law 
enforcement agencies in the Asia-Pacific region.  Raul 
Roldan, the Federal Bureau of Investigation's (FBI) 
Chief of Cyber Crime Investigation, explained how the 
Fusion Center, a non-profit subject matter expert 
research center with members from over 400 companies, 
provides a mechanism for United States authorities and 
the business sector to share information at a level 
normally impossible when dealing directly with private 
companies.  He added that aggressive multi-lateral 
 
BEIJING 00007192  012 OF 014 
 
 
cooperation throughout the region is the key to IPR 
enforcement success. 
 
¶30. (SBU) Tom Hipelius from the Department of Homeland 
Security (DHS) Immigration and Customs Enforcement IPR 
Coordination Center noted substantial improvement in 
cooperation with Chinese law enforcement agencies.  He 
pointed out that, whereas written requests for 
meetings with Chinese counterparts went unanswered in 
2001, by 2004 the two governments were carrying out 
joint undercover operations.  He noted particular 
successes in the case of Vincent Ku, who was selling 
counterfeit Microsoft products, as well as a 
pharmaceutical case codenamed Ocean Crossing.  DHS 
Customs and Border Patrol's (CBP) Steve Thomas 
reported 14,675 IPR seizures in 2006, noting that 81 
percent of IPR border seizures were from shipments 
originating in China.  He underscored CBP's positive 
working relationship with the General Administration 
of Customs of China (GACC) and other Chinese agencies. 
Thomas added that CBP and GACC had signed an IPR 
memorandum of understanding that became effective in 
June, allowing for more information sharing on IPR 
seizures. 
 
Initial Feedback from Attendees 
------------------------------- 
 
¶31. (SBU) Direct and indirect feedback via surveys, 
blogs, and web postings give a fairly comprehensive 
account of the success of this year's Roundtable and 
ongoing challenges in protecting IPR.  Attendees 
generally ranked the roundtable as "highly valuable" 
to them, noting in particular the utility of a forum 
to educate the United States Mission on how to better 
support industry.  Attendees also offered that 
recommending practical steps to support rights holders 
was a challenging, useful exercise that prompted 
follow-up in their own organizations.  One association 
has reportedly already suggested to the Ministry of 
Public Security how to coordinate more closely on 
criminal copyright enforcement cases -- in effect, a 
first practical consequence of the IPR Roundtable. 
 
¶34. (SBU) The Mission's initial analysis shows a 
consistent message from industry: there continues to 
be a compelling need for increased interagency 
cooperation and coordination in IPR issues, including 
cooperation with legislative and judicial branches. 
Also, many industry participants openly criticized the 
United States Government's WTO case, suggesting that 
it undercuts their efforts to improve enforcement by 
working with IPR officials.  One trade association 
representative said they saw "little purpose" in 
visiting Beijing because of the WTO case, while others 
explained that their China budgets had been cut, thus 
precluding their attendance.  This new dynamic on IPR 
 
BEIJING 00007192  013 OF 014 
 
 
engagement in China places additional stress on 
existing China Mission resources as we seek new ways 
to support industry.  It also suggests that DC 
agencies should similarly begin to seek creative new 
avenues of engagement on IPR in China, such as working 
more closely with Capitol Hill, the courts, and 
international organizations, as appropriate. 
 
Planned Follow-Up Actions 
------------------------- 
 
¶35. (SBU) In coordination with the Office of the 
Coordinator for International IPR Enforcement, Embassy 
is preparing a separate white paper detailing the 
status of IPR enforcement in China and industry 
recommendations presented to the Ambassador at the 
Roundtable.  This document could be a useful tool to 
coordinate the Mission's approach to prioritizing and 
acting on these recommendations with Washington 
agencies.  Additionally, the document could be useful 
for reporting to Capitol Hill. 
 
¶35. (SBU) Many industry participants declined to make 
their presentations available for wider dissemination. 
Those approved for publication are available online at 
http://www.signup4.net/public/ap.aspx?EID=AMB A16E&OID= 
¶147. 
 
Comment 
------- 
 
¶36. (SBU) There was no Chinese Government 
participation at this year's Ambassador's IPR 
Roundtable, likely a further impact of April's WTO 
filings.  The resulting atmosphere may have been more 
conducive for panelists to provide candid, 
constructive recommendations to the China Mission. 
Speakers also appeared to value the opportunity to 
directly address the Ambassador, who attended the 
entire day's events.  Despite the usual raft of 
problems, however, several attendees also noted the 
success of recent and ongoing programs.  Senior IPR 
Attache has also recently noted what appear to be 
early signs of a thawing in the previously frozen 
bilateral relationship on IPR issues, at least on 
technical levels.  In a string of meetings preceding 
the Roundtable, Senior IPR Attache attended programs 
and sat with the Vice President of China's Supreme 
People's Court, the deputy chair of the National 
People's Congress Standing Committee, a Vice Minister 
of the National Copyright Administration, a Vice 
Minister of the State Adminitration for Industry and 
Commerce, a Vice Comissioner of SIPO, and others. 
Also, a senior Ministry of Public Security official 
expressed his interest in deepening cooperation on 
domestic enforcement of IPR.  Moreover, Supreme 
People's Court judges attended the Roundtable 
 
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reception and, on the margins of the Roundtable, U/S 
Dudas from USPTO had successful meetings with SIPO 
Commisioner Tian, as well as SAIC Vice Minsiter Li 
Dongsheng.  The situation continues to remain fluid. 
However, generally speaking, the more technical the 
discussion, the less it involves WTO issues, the less 
it involved MOFCOM, and the more it involves local 
governments away from Beijing or trade association 
sponsorship, the more likely it is to take place.  End 
Comment.