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### Viewing cable 07BEIJING2455, USPTO U/S DUDAS AND SUPREMEPEOPLE'S COURT DISCUSS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07BEIJING2455 | 2007-04-13 03:31 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Beijing

`

    VZCZCXRO3510
    OO RUEHCN RUEHGH
    DE RUEHBJ #2455/01 1030331
    ZNR UUUUU ZZH
    O 130331Z APR 07
    FM AMEMBASSY BEIJING
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 6806
    INFO RUEHCN/AMCONSUL CHENGDU 8164
    RUEHGZ/AMCONSUL GUANGZHOU 2762
    RUEHGH/AMCONSUL SHANGHAI 7361
    RUEHSH/AMCONSUL SHENYANG 7844
    RUEHHK/AMCONSUL HONG KONG 9204
    RUEHIN/AIT TAIPEI 6395
    RUEHKO/AMEMBASSY TOKYO 1327
    RUEHUL/AMEMBASSY SEOUL 0070
    RUEHMO/AMEMBASSY MOSCOW 8653
    RUEHGV/USMISSION GENEVA 1773
    RUEAHLC/DHS WASHDC
    RUCPDOC/USDOC WASHDC
    RUEAWJA/DEPT OF JUSTICE WASHDC
    RHMCSUU/FBI WASHINGTON DC

` `

    UNCLAS SECTION 01 OF 05 BEIJING 002455

    SIPDIS

    State for EAP/CM - JYamomoto and EB/IPE - EFelsing

    USTR for China Office - AWinter; IPR Office - RBae; and OCG
    - SMcCoy, ACelico

    Commerce for National Coordinator for IPR Enforcement -
    CIsrael

    Commerce for MAC 3204/LRigoli, ESzymanski

    Commerce for MAC 3043/McQueen

    LOC/Copyright Office - MPoor

    USPTO for Int'l Affairs - LBoland, EWu

    DOJ for CCIPS - Asharrin
    DOJ for SChembtob
    FTC for Blumenthal
    FBI for LBryant

    DHS/ICE for IPR Center - DFaulconer

    DHS/CBP for IPR Rights Branch - Pizzeck
    SENSITIVE
    SIPDIS

    E.O. 12958: N/A
    TAGS: KIPR ETRD ECON WTRO PGOV CH
    SUBJECT: USPTO U/S DUDAS AND SUPREMEPEOPLE'S COURT DISCUSS
    DEEPER COOPERATION ON PR PROTECTION AND INNOVATION

    -------
    Summay
    -------

    ¶1. (SBU) Commerce Under Secretary and Director of the
    United States Patent and Trademark Office Jon Dudas met
    with Supreme People's Court (SPC) Deputy President Zhang
    Jun on March 28 to discuss intellectual property rights
    (IPR) protection and innovation in China.  The two
    discussed China's criminal law, judicial interpretation
    (JI), statistics exchange, and technical assistance
    programs.  Zhang also made reference to a new agenda for
    IPR protection in China, offering only that the details
    will soon be forthcoming.  End Summary.

    ¶2. (SBU) Zhang opened by saying that China's focus on
    building an innovation-based society is a recent
    development in the country's history.  As a result, while
    legislation to protect IPR and innovation has improved,
    China's foundation of economic and technological
    development, and judicial practices, remains relatively
    weak.  He added his view that progress on IPR, including
    early measures to penalize infringement, have to date been
    satisfactory, but that the courts must continue to study
    judicial best practices to improve IPR protection.

    -----------------------
    Judicial Interpretation
    -----------------------

    ¶3. (SBU) U/S Dudas expressed his admiration for
    improvements in China's IPR enforcement, which he credited
    in part to a judicial interpretation issued by the SPC in
    ¶2004.  He added that the United States nevertheless remains
    concerned over criminal threshold levels, valuations, and
    the courts' use of probation in lieu of imprisonment.  U/S
    Dudas stated that further review and revisions of the 2004
    judicial interpretation might be necessary.  Zhang
    responded that, compared with the 1998 JI that preceded it,
    the 2004 JI intensified crackdowns on IPR crimes by
    reducing criminal thresholds and better addressing China's
    IPR situation.  He explained that the effectiveness of the
    measures - and of increased law enforcement efforts - was
    evidenced by a 30 percent increase in the number of IPR
    crimes prosecuted from 2004 to 2005.  Zhang admitted,
    though, that China should increase the penalties for such
    crimes.  (Note: On April 5, the SPC and SPP released a
    supplement to the 2004 judicial interpretation related to
    criminal intellectual property infringement.  The
    JI(II)lowered criminal thresholds of copyright materials by
    50 percent, from 1,000 to 500 illegal copies of copyrighted
    works. The JI (II) also clarified the definitions

    BEIJING 00002455  002 OF 005

    "reproduction and distribution" reference in Article 217 of
    the Criminal Law.  According to the new interpretation,
    "reproduction and distribution" include the acts of
    reproducing OR distributing, or both reproducing AND
    distributing. End Note.)

    ---------
    Probation
    ---------

    ¶4. (SBU) Zhang continued that the use of probation in IPR
    cases is in accordance with China's existing criminal code
    and the principle of Chinese law to allow criminals the
    opportunity to repent and reform rather than serving jail
    time.  He said probation is often used for misdemeanors,
    first time criminals, and criminals who show remorse, and
    that the option is used carefully and has a strong
    deterrent effect.  U/S Dudas agreed that maximum deterrence
    should be a key goal, and that the United States generally
    seeks to achieve this by lowering criminal thresholds and
    increasing penalties, particularly on IPR crimes.  U/S
    Dudas requested that the SPC provide statistics that might
    more clearly demonstrate China's recent progress in
    improving IPR enforcement, and offered to provide United
    States data that might be useful to those efforts.  Both
    parties agreed to coordinate the sharing of statistics
    between Mission Senior IPR Attache and Chief Judge Jiang
    Zhipei of China's IPR Tribunal.

    ------------------
    Internet Copyright
    ------------------

    ¶5. (SBU) U/S Dudas explained that United States law changes
    regularly to address the rapid advance of Internet
    technologies, and questioned how China is preparing to deal
    with online copyright infringement.  Zhang admitted that
    Internet-related IPR crimes are occurring with increasing
    frequency, including infringements of the right to
    personality, reputation, and property.  He lamented that
    legislation always lags behind the situation on the ground,
    and described the SPC's greatest challenge as anticipating
    problems that will arise as a result of future
    technological developments.  Zhang added that China is not
    experienced in investigating Internet crimes, collecting
    evidence in such cases, or meting out penalties, but that
    laws will eventually be changed to address new concerns.
    Citing an example, Zhang wondered whether the online theft
    of virtual property should be handled in the same way as
    theft of tangible property, with similar punishment.  He
    said that, although such issues are not yet included in
    judicial interpretation, some investigators and

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    "grassroots" judges have handled such cases in progressive
    ways with controversial judgments.  In that way, he pointed
    out, judicial practices - and not necessarily legislation -
    are moving lawmaking forward in China.  At the suggestion
    of U/S Dudas, both parties agreed to address such emerging
    issues, and both parties agreed to explore a cybercrime
    program to share experiences among judges and experts from
    both countries.

    ------------------------------
    Universal IPR Court for China?
    ------------------------------

    ¶6. (SBU) Judge Randall Rader of the United States Court of
    Appeals for the Federal Circuit offered that the United
    States has greatly benefited from a uniform, national
    policy on IP administered by a unified court, and that
    several other countries have adopted a similar model.  He
    explained that such specialized courts allow judges to
    develop the technical expertise to more effectively
    administer IP law, and suggested that China might benefit
    from such a system.  Zhang acknowledged that an IP court
    would raise the professionalism of the SPC by increasing
    technical understanding and competence and that -
    "generally speaking" - he supports the idea and its many
    benefits.  However, he added that such a court will not be
    established in China until after a broad-based reform of
    the judicial system as a whole, at which point the
    judiciary will be "up to a specific standard."  He joked
    that Judge Jiang in particular strongly supports the
    establishment of such a court, as he would serve as its
    presiding judge.

    ¶7. (SBU) Short of establishing a unified IP court, Zhang
    explained that the SPC works hard to improve its IPR
    chambers through increased staffing, stability, and
    expertise.  He added that China's IPR judges are some of
    its most qualified and educated.  Zhang welcomed Judge
    Rader's offer to bring his entire IPR court to China in the
    future for a dialogue and information exchange.

    --------------------
    Technical Assistance
    --------------------

    ¶8. (SBU) U/S Dudas suggested that petitioners and
    applicants in the United States would benefit from a better
    understanding of China's judicial system, and that a
    program to invite speakers from China to the United States
    also would be useful.  Zhang agreed, and also responded
    favorably to U/S Dudas' offer to bring Chinese officials to
    Washington to attend the Patent and Trademark Office's

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    Global IPR Academy.

    -----------------------------
    China's National IPR Strategy
    -----------------------------

    ¶9. (SBU) In closing, Zhang emphasized that the protection
    of IPR is in line with China's national interests and a
    common ground between the United States and China.  He said
    that the SPC issued a "judicial document" in January 2007
    that will comprehensively improve IPR protection and lead
    to more crackdowns against infringers.  Zhang said the
    details of the plan will soon be forthcoming (Note: Zhang
    may have been referring to China's national strategy on IPR
    protection, which the State Intellectual Property Office on
    March 27 announced will be released in the first half of
    ¶2007.  End Note.), but offered that it will include three
    principles:  equity and fairness; uniformity of standards
    of judicial administration; and equal protection to
    domestic and foreign rights holders.  He further suggested
    that, under the new plan, civil and administrative law (not
    criminal law) will bear first responsibility to deal with
    IPR.  Zhang went further to say that judicial protection is
    not the most important element in fighting IPR crimes, but
    that a more integrated approach, including the general
    strengthening of the rule of law and the harmonious and
    socially equitable development of China's economy, will
    serve to reduce the incidence of all crimes.

    --------------------
    Meeting Participants
    --------------------

    ¶10. (U) U.S. Participants:

    Commerce Under Secretary for Intellectual Property and
    USPTO Director Jon Dudas
    U.S. International Intellectual Property Enforcement
    Coordinator Chris Israel
    USPTO Director of the Office of International Relations
    Lois Boland
    Embassy Senior IPR Attache Mark Cohen
    Embassy IPR Attache Todd Thurwacther
    USPTO Attorney-Advisors: Elaine Wu, Jasemine Chambers, Tim
    Browning, Conrad Wong; and Trade Policy Analyst Susan Tong
    Embassy Economic Affairs Second Secretary Geoff
    Siebengartner (notetaker)
    Interpreter
    U.S. Court of Appeals for the Federal Circuit Judge Randall
    Rader

    ¶11. (U) Chinese Participants:

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    SPC Vice President Justice Zhang Jun
    SPC IPR Tribunal Chief Judge Jiang Zhipei
    SPC IPR Tribunal Deputy Judge Kong Jiangjun
    SPC Research Center Judge Li Hongjiang
    SPC Administrative Tribunal Judge Gan Wen
    SPC Second Criminal Tribunal Judge Liu Miaoxiang
    Interpreter

    -------
    Comment
    -------

    ¶12. (SBU) Following USTR's April 9 announcement to bring
    two WTO cases against China, the extent of future bilateral
    cooperation on IPR and related issues remains uncertain.
    As anticipated, some Chinese officials who in the past have
    supported cooperation with the United States on IPR
    protection and enforcement have expressed dissatisfaction
    at the announcement.  Further, it is likely that officials
    who may be willing to continue to work together may face
    internal pressure to limit such efforts.  End Comment.

    ¶13. (U) U/S Dudas' delegation has cleared this report.

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