Illegal copying of music, movies and other goods by Chinese product pirates is rising despite official promises to stamp it out, U.S. officials said Monday, calling for stronger enforcement of intellectual property laws.
Almost two-thirds of all seizures of fake products by U.S. Customs officials come from China, far more than any other country, and despite stronger laws and top-level pledges to crack down the problem has been getting worse, the officials said.
"The bad news is that the amount of seizures of pirated products is increasing," said Jon W. Dudas, under secretary of Commerce for Intellectual Property. "The percentage is growing. Also the dollar figure is rising," he said.
Shipments from China accounted for 63 percent of all seizures last year, or trade worth $87.3 million, according to U.S. Customs statistics. That compared with 66 percent in 2003, or $62.5 million, 49 percent in 2002 and 46 percent in 2001.
The country with the next largest amount of seizures in 2004 was Russia, with only 5 percent.
In a formal request made through the Geneva-based World Trade Organization, the United States has asked Beijing to outline what its doing to fight piracy, in what could be a precursor to economic sanctions if Washington uses the information in a trade case against China.
The issue has taken on greater urgency with the trade deficit with China, having hit a record $162 billion last year, running 30 percent above the 2004 pace.
Cigarettes accounted for almost half of the total value of seizures from China in 2004, followed by handbags and other accessories and clothing.
Even small businesses with no ties to China are finding cases of counterfeit, usually substandard versions of their products surfacing in other markets, such as in South America, Dudas noted.
U.S. officials attending an anti-piracy conference praised Chinese efforts to confront the problem, but said not enough was being done to protect legitimate businesses or consumers.
The fastest growing problem is in the area of Internet-based crime, said Louis M. Reigel, III, assistant director for the Federal Bureau of Investigation's Cyber Division.
About 40 percent of the 500 commercial piracy cases now under FBI investigation involve China, he said. Those cases span a wide range of industries, including apparel, music, movies, games, software and even drugs.
"Most critical are pharmaceutical goods imported into the U.S. and sold to the most vulnerable in our society," Reigel said. "Theft in the trade sectors and intellectual property are emerging as global threats."
U.S. and Chinese authorities are stepping up cooperation in combatting such crimes.
In one prominent case resulting from a joint operation, a Shanghai court sentenced two U.S. citizens to up to 2 1/2 years in prison in April, along with two Chinese co-defendents, for running an international counterfeit DVD ring.
One of the men, Randolph Hobson Guthrie III was deported to the United States where is remains under house arrest before a Jan. 3 trial on multiple charges of copyright infringement.
The American officials said they are seeking more detailed data from China on copyright and patent violations, running education programs for both Chinese officials and U.S. businesses and lobbying Beijing to revise laws to allow greater market access for foreign manufacturers of legitimate products.
Most importantly, China needs to better enforce the laws already on the books, Reigel said.
Chinese courts have little experience in handling criminal commercial piracy cases, and companies face formidable barriers when seeking protection, he said.
"There is still minimal progress in terms of establishing a credible and effective enforcement mechanism," he said.