On September 25, 2007, the Dispute Settlement Body of the World Trade Organization (WTO) established a panel to review China's measures concerning the protection and enforcement of intellectual property rights, including trademarks and copyright.

The initial complaint was filed by the United States and Canada will likely be a third party to this proceeding. The United States claims that Chinese IP laws violate the WTO Agreements as follows:

  • The thresholds that must be met in order for trademark counterfeiting and copyright piracy to be subject to criminal procedures and penalties are too high. That is, there is a lack of criminal procedures and penalties for commercial scale counterfeiting and piracy in China as a result of these high thresholds.
  • Infringing goods confiscated by Chinese customs authorities are often released into channels of commerce (and exported abroad), instead of being destroyed.
  • Authors of works whose publication/distribution has not been authorized appear not to enjoy the minimum standards of protection specially granted by the Berne Convention.
  • Pre-distribution and pre-authorization review processes for Chinese nationals' works, performances and sound recordings differ from the processes that apply to foreign nationals' works, performances and sound recordings, resulting in earlier or otherwise more favorable protection or enforcement of copyright rights for Chinese authors' works.

Canada is expected to participate in the proceedings in light of its interest in ensuring that Chinese IP laws are WTO-consistent. It is also seeking to curb the flow of infringing goods from China into Canada, many of which are subsequently shipped to the United States.