Beijing to fight US on intellectual rights

China will “fight to the end” a US complaint to the World Trade Organisation over intellectual property rights, Wu Yi, a vice-premier, said on Tuesday, in Beijing’s strong­est denunciation yet of Washington’s recent push to open markets.

“By taking China’s IPR and market entry regime to the WTO’s dispute settlement system, the [US] has ignored the great progress China has made,” Ms Wu told an anti-piracy forum. “Such moves...will have a very negative impact by creating the first instance in the WTO where one member filed two cases [simultaneously] against another member.” Ms Wu is to head a delegation to Washington in May for the second meeting of the strategic economic dialogue forum set up with the US last year to try to manage bilateral tensions.

In a sign that the dialogue could proceed unimpeded by the growing spat, Ms Wu focused her criticism on US trade officials and did not mention Hank Paulson, the Treasury secretary.

However, China’s anger over the IPR case could impede Ms Wu’s ability to wring concessions from top Chinese leaders to deliver at the meeting in Washington.

Ms Wu’s attack coincided with rare good news for foreign efforts to enforce their IPR rights in Chinese courts, with IFPI, an industry group representing the world’s largest music companies, successfully suing Yahoo’s Chinese affiliate for piracy.

In a decision released on Tuesday, the Beijing No 2 Intermediate People’s Court ordered Yahoo China to pay Rmb210,000 ($27,000, £13,500, €20,000) in damages to IFPI members and also delete links to websites offering pirated downloads.

Although Yahoo did not offer the illegal downloads, the court said it had “facilitated others through the internet to conduct infringing behaviour”. Yahoo has said it will appeal.

The court’s decision differs from an earlier decision by a Beijing court against IFPI, which had taken a similar action against Baidu, the leading Chinese search engine, and failed.

John Kennedy, chairman and chief executive of IFPI, said: “This is a good news day for the music industry. This judgment will boost the growth of a licensed digital music business in China and provides better protection for intellectual property in this vast, exciting market. The ruling promises to improve the whole environment in which the local and international music industry does business in China.”

May-seey Leong, the Asia regional director for IFPI in Hong Kong, said she was “surprised but pleased” that a decision had come only months after the case was accepted by the court. The Baidu decision, by contrast, took more than a year.

A more cynical interpretation would suggest the favourable court decision for foreigners might have been fast-tracked to coincide with Ms Wu’s political message.

In defending China’s anti-piracy efforts, Ms Wu said 988 people had been arrested for IPR infringement in 2006.

But the pirates remain fleetfooted, with DVD copies of Spider-Man 3 on sale in Beijing on Tuesday, more than a week before its US cinema release.

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