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WTO Sides with U.S. in China DVD Piracy Claim

29 Jan, 2009 By: Erik Gruenwedel

In a major victory for Hollywood studios, the World Trade Organization this week ruled in favor of the United States regarding a 2007 complaint filed by the United States against China regarding its indifference toward rampant piracy of intellectual property, including movie DVDs.

The Motion Picture Association of America (MPAA) claims U.S. copyright industries lose billions annually in revenue to piracy in China. It said that nine out of every 10 DVDs sold in China is an illegal copy.

In its findings the WTO said Chinese customs officials routinely allowed seized counterfeit goods to be reintroduced in the market. It said the Beijing government repeatedly ignored foreign claims regarding pirated DVDs and music CDs.

The WTO recommended China bring “copyright law and the customs measure into conformity with it obligations” in international trade and commerce. It did not rule that Chinese efforts to curb piracy remain minimal and fail as a deterrent, an action the United States had sought.

A Chinese commerce ministry spokesman, in a statement, said the government “expresses its regret.”

"As we continually strengthen domestic intellectual property rights, we will continue to promote international exchanges and co-operation and promote the healthy development of global trade relations,” said the spokesperson.

Dan Glickman, chairman and CEO of the MPAA, welcomed the ruling as a positive step toward curbing piracy in the most populous country.

“China restricts [theatrical] access to many legitimate titles, but that doesn’t stop the pirated distribution of virtually all U.S. films in China,” Glickman said in a statement. “The WTO has affirmed that these titles rightly deserve copyright protection.”

Glickman said he had mixed feelings about the WTO limiting its criticism of China’s anti-piracy efforts singularly to meeting international standards.

“We are disappointed that [it] did not accept the strength of the U.S. argument that China’s threshold for taking criminal action does not deter rampant piracy, which is evident,” he said.

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