US Congress to brew intellectual property

Absrtact: On the eve of the U.S.-China Strategic and Economic Dialogue (SED) next week, the U.S. Congress is brewing a bottom-up policy toolkit for IPR protection and innovation policy issues in China, seeking to pressure China's new channels with intellectual property rights. This toolbox

On the eve of the U.S.-China Strategic and Economic Dialogue (s&ed) next week, Congress is brewing a "policy tool box" for China's IPR protection and innovation policy issues, leveraging the "intellectual property curse" to find new ways to pressure China.

The toolbox could include punitive tariffs on all Chinese imports, as well as sanctions on Chinese companies listed in the US for intellectual property issues.

The message was delivered at a hearing May 4 by the U.S.-China Economic and Security Assessment Committee (USCC), which was held by Congress. The presiding officer, USCC Amatore, Richard D ' Amato, told the newspaper that he would gather hearings and report to Congress on the need to expand the policy toolkit and put pressure on China to resolve both issues.

But USCC Chairman William Reinsch (William A. Reinsch) told the newspaper that the programme was "too radical" to enter the legislative process and "not sure" whether it could be accepted by the Securities and Exchange Commission (SEC).

China's intellectual property and independent innovation policy is the first issue of this round of s&ed. The U.S. trade representative, Marantis, who will participate in the dialogue, said to this newspaper 3rd: "This is the time to hold this hearing, which also testifies to the extent to which Congress is concerned about both issues." ”

"Anti-piracy tariffs" will not enter the legislative process

The proposed "punitive tariffs on all Chinese imports" comes from a former Washington State Senator Gordon Slade Gorton. In his first testimony at the hearing, he called it the "anti-piracy penalty tax" as a lever to force China to step up its efforts to address intellectual property protection issues.

Gordon suggested that the United States impose punitive tariffs on all goods in the US, with a tax target of 150% per cent of the total U.S. intellectual property losses in China over the previous year, and tax rates.

Gordon said the "anti-piracy penalty tax" would remain as long as the U.S. 's IPR losses in China accounted for more than 10% per cent of U.S. exports to China.

Because the "anti-piracy penalty tax" is clearly in violation of WTO regulations, Gordon defended that this is because China's piracy and other IPR infringement is too serious, must exert pressure to force the Pirates to stop their operations.

USCC Commissioner Amatore said he would consider Gordon's proposal. Because he has no hope for the WTO mechanism, "the WTO mechanism cannot be expected to solve China's IPR problems".

This has been echoed by US investors in China. Earlier, a number of U.S. businessmen in China told this newspaper that China's IPR protection and independent innovation issues on its operations in China, far more than the changes in the renminbi exchange rate policy factors.

In fact, consultations on these two issues are not without progress. U.S. trade deputy representative Marantis said that China and the United States at the end of last year's Sino-US Joint Commission on Commerce (JCCT), and earlier this year, President Hu Jintao's visit to the United States has made "much progress."

Marantis hopes to achieve more results in next week's s&ed, and will ensure that China will translate its commitments into action through JCCT, s&ed and WTO consultation mechanisms.

But Congress is not satisfied with these consultative mechanisms. USCC Chairman Reinsch said: "The light of the consultations can not solve the problem, must take some action to make the two sides seriously deal with these issues." ”

Reinsch does not think punitive tariffs are the right solution, "Gordon's plan is too radical and unlikely to enter the legislative process."

Take Thunder to the United States listed surgery?

Michael R. Wessel, the USCC commissioner, at the hearing raised the issue of sanctions against Chinese companies listed in the US, with the help of the US Securities and Exchange Commission, for the protection of intellectual property rights.

If Weissel this idea to implement, Baidu, Sohu, NetEase and so on many listed internet enterprises in the US will be affected. "If Chinese companies are to buy pirated software, such as infringement of intellectual property rights, it will pose risks to US investors." ”

Weissel wants the SEC to incorporate the intellectual property protection performance into the regulation of Chinese companies, "we can sue the management of these companies in U.S. courts."

At present, 12 Chinese state-owned enterprises are listed on the NYSE. Social networking Renren successfully landed in the NYSE in April, and more Chinese companies are going public in the US. The number of Chinese companies listed in the US has reached a record 34 in 2010, when the total market value of the year was over 24.6 billion dollars.

Baidu, the search engine company, was singled out for criticism at the hearings. Michael Schlesinger, head of the International Intellectual Property Protection Alliance (Schlesinger), testified that Baidu's MP3 search function is responsible for the spread of pirated music on the Chinese Internet.

Schlesinger in the written testimony that the Thunder, VERYCD and other peer-to-peer transport services companies and the Chinese internet film, music piracy problems have a direct link. "Sohu, NetEase and many other Chinese Internet enterprises belong to the protection of intellectual property rights of the target." ”

The Thunderbolt's intention to land in the U.S. stock market within 2011 years was reported in March. At the hearing, Schlesinger advised USCC to communicate with the SEC, allowing the SEC to use intellectual property protection as part of the market for Thunder to the US.

USCC, who expects the SEC to intervene, "should make compliance with intellectual property protection one of the conditions for Chinese companies to be listed in the United States and into U.S. financial markets".

"Borrowing the SEC is a good idea. USCC Chairman Reinsch said: "But I am not sure the SEC will accept such a proposal." ”

Li Guanyun Washington Report