VZCZCXRO4790
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4527/01 3471303
ZNR UUUUU ZZH
P 121303Z DEC 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 1374
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHIN/AIT TAIPEI 7134
RUEHKO/AMEMBASSY TOKYO 2323
RUEHUL/AMEMBASSY SEOUL 1010
RUEHMO/AMEMBASSY MOSCOW 9153
RUEHGV/USMISSION GENEVA 2315
RUEAHLC/DHS WASHDC
RUCPDOC/USDOC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMCSUU/FBI WASHINGTON DC

UNCLAS SECTION 01 OF 03 BEIJING 004527 
 
SENSITIVE 
SIPDIS 
 
State for EAP/CM - PPark and EB/IPE - DBubman 
State for EB/TPP - EMagdanz and INL - JVigil 
State for EB/CIP - WWitteman and RDaley 
USTR for China Office - AWinter; IPR Office - RBae; 
and OCG - SMcCoy; and JRagland 
Commerce for National Coordinator for IPR 
Enforcement 
Commerce for MAC ESzymanski 
Commerce for MAC SWilson, JYoung 
LOC/Copyright Office - STepp 
USPTO for Int'l Affairs - LBoland, EWu, STong 
DOJ for CCIPS - MDubose and 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 
State for White House OTP Ambassador Richard Russell 
 
E.O. 12958: N/A 
TAGS: ETRD EIND KIPR ECON CH
 
SUBJECT: CHINA SUPREME COURT JUDGE REPORTED - 
WITHOUT CORROBORATION - TO FAVOR PROTECTIONIST 
MEASURES ALLOWING SELECTIVE ENFORCEMENT OF IPR 
 
This cable is sensitive but unclassified and is not 
for Internet distribution. 
 
Summary 
------- 
 
¶1. (SBU) According to one local media report, China 
Supreme People's Court (SPC) IP Judge Kong Xiangjun 
on December 10 said the SPC is studying "how to 
adjust patent, trademark and other IP judicial 
policies" to mitigate the effect of the global 
financial crisis on China's economy, and might 
introduce a new "public interest" test that does not 
require cessation of infringement as a remedy. 
Emboffs contacted Chen Shanzhe, the journalist 
originating the story, who admits to being 
unfamiliar with IPR issues and said he did not 
record his private conversation with Kong that 
followed a public press conference, the transcript 
of which appears inconsistent with Kong's story and 
shows strong statements by Kong favoring stricter 
IPR protection in China (though he did note an 
interest in protecting economic and social 
stability).  In our initial contacts with working 
level IP officials, none were familiar with the 
press report and said they were unfamiliar with such 
a change in policy, but we will continue following 
up with agencies at higher levels for further 
clarification.  End Summary. 
 
Judge Reported to Favor Selective Enforcement 
--------------------------------------------- 
 
¶2. (SBU) Reporting on a December 10 press conference 
at China's Supreme People's Court (SPC) held to 
review "monthly action on strengthening judicial 
protection for IPR," the 21st Century Business 
Herald on December 11 said that the SPC is studying 
"how to adjust patent, trademark and other IP 
judicial policies" to mitigate the effect of the 
global financial crisis on Chinese companies.  The 
potential adjustments reportedly cited by SPC IP 
Court Vice President Kong Xiangjun would introduce a 
new "public interest" test in the judiciary's remedy 
of IP infringement cases, and would require 
cessation of certain infringing activity only if it 
involved economic activities that "violated public 
interest."  If the public interest is not violated, 
reports said, the infringer would be allowed to 
continue the infringing activity, but be required to 
pay damages to the right holder. 
 
¶3. (SBU) The judge is reported to have used two 
examples to illustrate the new policy.  In the 
first, a company that is building a bridge and is 
discovered to be using an infringing design should 
be allowed to pay a fine and continue construction. 
In the second, shooting of a television drama based 
on an infringing screenplay should be allowed to 
continue once a fine is paid.  In both examples, 
 
BEIJING 00004527  002 OF 003 
 
 
Kong reportedly suggested that continuing the 
economic activities are in the public interest and 
should not be ceased. 
 
¶4. (SBU) The news report said the new policy would 
be a departure from current Chinese requirements to 
cease all infringing activity, but claimed it would 
be consistent with other opinions issued by the SPC 
on December 4 that protect the nation's "financial 
security".  The December 4 document is entitled 
"Opinions on the Provision of Judicial Support and 
Legal Services for the Safeguard of National 
Financial Security and Comprehensive, Coordinated 
and Sustainable Economic Growth." 
 
Supreme Court, IP Agency Unaware of Comments 
-------------------------------------------- 
 
¶5. (SBU) Officials at China's State Intellectual 
Property Office (SIPO) told Emboffs they were 
unaware of the article and statements made by Judge 
Kong, and that, to their knowledge, China's policy 
on the protection of IPR has not changed.  SIPO 
officials suggested that the journalist's reporting 
perhaps did not accurately reflect the judge's 
statements.  They also requested a copy of the 
article for their review and comment.  SPC Foreign 
Affairs Division Director Liu Ming also told Embassy 
he was unaware of the news story or of such a change 
in policy, and asked for a copy of it before he 
could comment.  Liu did say that SPC would be 
willing to meet with Embassy officials to discuss 
the matter, and suggested a meeting with the SPC IP 
Court.  (Note: The IP Division, not the Foreign 
Affairs Division, would have close involvement in 
such a change in policy, but were not reached on 
December 12.) 
 
¶6. (SBU) Emboffs also contacted Chen Shanzhe, the 
21st Century Business Herald reporter credited with 
the original story.  Chen explained that the story 
came from his private conversation with Judge Kong 
following the December 10 press conference.  Chen 
admitted being unfamiliar with IP issues, but 
reconfirmed that the examples used in the story were 
offered by Kong.  However, Chen said he did not 
record his conversation with the judge, could not 
independently verify the information, and asked 
Emboffs not to contact the SPC directly. 
 
Contradictory Reports 
--------------------- 
 
¶7. (SBU) A separate media report by Xinhua, China's 
newswire service, offers a report quite 
contradictory to Chen's story and in line with 
Embassy's initial review of the event transcript. 
Xinhua credits Kong with telling local courts to be 
stricter on IPR infringers, and that courts should 
implement strict rules that deprive IPR violators of 
 
BEIJING 00004527  003 OF 003 
 
 
all illegal profits and legal costs of the victim. 
The transcript does show that Kong refers to 
"protect[ing] the public interest and safeguard[ing] 
the survival of enterprises and social stability," 
but he also says the court "should properly apply 
the legal obligations of IP infringement cessation 
according to the law." 
 
¶8. (SBU) Emboffs are working to translate in full 
the Chinese transcript of the press conference and 
related news articles that reference Judge Kong's 
December 10 statements.  We will also continue to 
seek clarification from the Chinese Government. 
 
Comment 
------- 
 
¶9. (SBU) If the 21st Century Business Herald story 
is true, the new policy would represent a radical 
departure from law and a disturbing setback to 
judicial protection of IP rights in China.  However, 
without any independent corroboration of the 
reporter's interview, we will need to get more 
clarification on the facts before considering whether 
to lodge an official protest with the government. 
End Comment.