[JURIST] A dispute settlement panel of the World Trade Organization (WTO) [official website] on Monday found [report, PDF; WTO press release] for the US that large parts of China's intellectual property scheme are inconsistent with its obligations under several international treaties, including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) [text]. The panel's findings come as the result of a process initiated against China by the US [JURIST report] in August 2007 for alleged lax enforcement of copyright and trademark violations [JURIST report; WTO backgrounder]. The panel's report concluded that certain provisions of China's copyright law as well as certain Chinese customs measures are inconsistent with TRIPS because they "nullify or impair benefits accruing to the United States." Acting US Trade Representative Peter Allgeier said [USTR press release, PDF]:

Today, a WTO panel found that a number of deficiencies in China's IPR [intellectual property rights] regime are incompatible with its WTO obligations[.] These findings are an important victory, because they confirm the importance of IPR protection and enforcement, and clarify key provisions of the TRIPS Agreement. Having achieved this significant legal ruling, we will engage vigorously with China on appropriate corrective actions to ensure that U.S. rights holders obtain the benefits of this decision.

The US request for a dispute resolution panel to adjudicate the issue of intellectual property rights protection came after a breakdown in bilateral consultations [WTO backgrounder] on the matter with China.

The case, filed in April 2007, was denounced by Chinese officials [JURIST report] who warned that it would "seriously undermine the cooperative relations the two nations had established in the field." The US also has another case against China [WTO backgrounder] pending, which accuses the Chinese government of adopting "measures that restrict trading rights with respect to important films for theatrical release," audiovisual home entertainment products, and publications. In February 2008, then-US Trade Representative Susan Schwab announced a case [WTO backgrounder] against China for its practice of subsidizing enterprises that "purchase domestic over imported goods or [meet] certain export performance criteria."