WTO Action Sought in Piracy Battle

The U.S. music, movie and software industries called for the first time Wednesday for the United States to begin legal action against China at the World Trade Organization to stop widespread piracy they said cost them at least $2.5 billion in 2004.

In a formal filing to the U.S. trade representative’s office, the International Intellectual Property Alliance said the Bush administration should ask China for immediate consultations on the issue at the WTO. That would be a first step toward asking for a WTO panel to rule on whether China was meeting its commitments to stamp out piracy.

U.S. trade representative spokesman Richard Mills said the Bush administration would “carefully review” the copyright industry’s request.

“As part of a comprehensive enforcement strategy of bilateral negotiations and international efforts to stop trade in fakes, USTR is now conducting a systematic legal review of China’s entire [intellectual property rights] enforcement system,” Mills said.

The industry move reflects growing frustration that promises made by Chinese Vice Premier Wu Yi and other top officials have not made a significant dent in piracy. U.S. industry estimates that about 90% of U.S.-produced music, movies and software sold in China is pirated.

“Our objective is to persuade the Chinese government that they must take real, not rhetorical, deterrent enforcement action that ... significantly reduces the rampant piracy that afflicts their entire country,” International Intellectual Property Alliance President Eric Smith said in statement that also urged Japan and Europe to join WTO consultations with China.

Neil Turkewitz, executive vice president for international affairs at the Recording Industry Assn. of America, said China’s high piracy rates were exacerbated by import barriers that kept out legitimate products.

A WTO complaint against China for piracy would be the second filed by the United States since Beijing joined the WTO in December 2001. The first complaint involved obstacles to imports of U.S.-made semiconductors. Many U.S. companies doing business in China have been reluctant to push for a case at the WTO because of concern over how the Chinese government would respond.