VZCZCXYZ0001
RR RUEHWEB

DE RUEHGZ #0720/01 3460934
ZNR UUUUU ZZH
R 110934Z DEC 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0061
INFO RUEHGZ/CHINA POSTS COLLECTIVE 0023
RUEHIN/AIT TAIPEI 0002
RUEAUSA/DEPT OF HHS WASHINGTON DC 0002
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC 0001
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0020
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0016
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC 0001
RUCNFB/FBI WASHDC 0001
RUEAIIA/CIA WASHDC 0023
RUEKJCS/DIA WASHDC 0023

UNCLAS GUANGZHOU 000720 
 
SIPDIS 
 
State for EAP/CM - SFlatt; EEB - JUrban 
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/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 - GMcCray, PPizzeck 
ITC for LLevine, LSchlitt 
 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON PGOV CH
SUBJECT: South China IPR: Rights Holders Call for "IPR Summit" and 
More High Level Visits at Roundtable Discussion 
 
REF: A) GUANGZHOU 132, B) 2007 GUANGZHOU 1241 
 
¶1. Summary: Lax enforcement remains the key problem for intellectual 
property (IP) rights holders operating in south China, according to 
the 30 business and legal professionals at the Consul General's 
December 2 IPR roundtable.  Rights holders recommended that senior 
Obama Administration IP officials visit IPR hotspots like south 
China, as early as possible to see problems first-hand.  Other 
comments and suggestions ranged from the need for increased 
transparency in the release of China's IPR enforcement data to the 
specific request that Shenzhen Municipal government resume 
cooperation with copyright owners whose optical discs have been 
pirated and sold within the city's jurisdiction.  U.S. rights 
holders also proposed an industry-led IPR Summit with high-level USG 
participation and a JCCT IPR Working Group meeting in south China. 
These would help focus local attention on the need for solutions to 
infringement problems.  End summary. 
 
Proposal for an Industry-led "IPR Summit" in South China 
--------------------------------------------- - 
 
¶2. Almost 30 business and legal professionals gathered to share 
insights and exchange IP-related experiences at the Consul General's 
2008 IPR Roundtable on December 2.  A prominent Hong Kong-based 
attorney who represents several Fortune 500 U.S. companies in south 
China introduced the idea of USG support for organizing an 
industry-led "South China IPR Summit."  Participants heartily 
supported the idea and said high-level USG participation would go a 
long way toward attracting attention from provincial and local 
government leaders and enhance a dialogue to better protect IP 
rights.  The conference could be held in Guangzhou or Shenzhen and 
would ideally include high-level participation from the U.S. Patent 
and Trademark Office, U.S. Coordinator for IP Enforcement, USTR, 
Department of Commerce, Customs, Department of State and other 
relevant agencies.  Although industry would prefer to hold this type 
of meeting as early in 2009 as possible, the Consul General Goldberg 
suggested holding the conference in summer or fall to allow time to 
plan for success. 
 
Site Visits, JCCT IPR Working Group Meetings in South China 
--------------------------------------------- - 
 
¶3. Even as participants brainstormed ideas for an "IP Summit", other 
rights holders emphasized that regardless of format or participants, 
the most effective U.S. government contribution to south China IP 
enforcement in 2009 would be high-level visits to Guangdong and 
Fujian provinces by new IP officials to see the problems first-hand. 
 The visits could be independent of a specific event, or could be 
tied to routine bilateral meetings like the JCCT IPR Working Group. 
 
 
Too Little Transparency for IPR Enforcement Information 
--------------------------------------------- - 
 
¶4. One Guangzhou-based attorney who represents several major 
international brands said many jurisdictions had significantly 
improved dissemination of civil case results in recent years, but 
improvement also highlighted the dearth of information stemming from 
administrative and criminal IPR cases.  Other participants also 
expressed concern that reporting and disclosure of IP enforcement 
information is erratic, with less transparency when agencies become 
 
distracted by other issues (like the recent Melamine contamination 
incident) or are exposed to increased scrutiny by media or foreign 
governments.  South China rights holders are currently discussing 
industry-based solutions to the lack of transparency, but all 
participants agreed that the best solution is for China's national 
and local government leaders to release more information at all 
levels and across all enforcement agencies. 
 
Widespread Desire for Improved Legal System 
------------------------------------------- 
 
¶5. Rights holders reemphasized long-needed reforms in China's legal 
system, including calls for better paid judges and prosecutors, more 
movement towards specialized courts to handle both civil and 
criminal IP cases, and fewer suspended sentences for convicted IP 
infringers in criminal cases.  Participants also said more staff and 
other resources are critical for local IPR enforcement agencies like 
Customs and the Administration of Industry and Commerce (AIC).  One 
attorney suggested a system of fee-based administrative tribunals 
for handling routine cases and settling IP-related disputes that do 
not meet legal thresholds for court cases.  Participants agreed that 
without these and other basic adjustments, enforcement problems 
would continue. 
 
¶6. Participants also voiced concerns about more specific IPR 
enforcement issues, including the recent discovery of counterfeit 
Blu-Ray optical discs in certain Chinese markets.  Representatives 
of entertainment industry rights holders called on the Shenzhen 
government to resume direct cooperation on optical disc 
investigations that had been suspended after the U.S. filed its WTO 
cases.  Rights holders said they would benefit greatly from a 
resumption of access the Shenzhen government's special optical disc 
forensics laboratory, as well as a commitment from the local Public 
Security Bureau (PSB) to actively investigate Blu-Ray counterfeiting 
operations.  Another participant said all rights holders would 
benefit if violators were held responsible for paying the 
warehousing and destruction costs in cases where authorities seize 
counterfeit items and assess penalties, a major change from current 
practice in most Chinese jurisdictions.  IPR enforcement at trade 
fairs was also identified as a continuing problem area by many 
rights holders, with one telling of consecutively suing an industry 
trade fair over two years until the trade fair finally addressed 
rights holder concerns in the third year for fear of being sued 
again. 
 
Comment 
------- 
 
¶7. It was clear from this exchange that IP enforcement continues to 
exact high costs on U.S. rights holders operating in south China, 
and they agree that problems can only be addressed by a combination 
of sustained public and private efforts.  Participants look forward 
to working with the new administration and see 2009 as an 
opportunity for senior officials to get the attention of local and 
provincial leaders here on the need for better IPR enforcement.  The 
consulate will continue to engage local contacts, both U.S. and 
Chinese, on new programs, like a Summit, and increase our capacity 
building efforts as we raise the profile of IP matters throughout 
the consular district. 
 
GOLDBERG