Zhejiang Province in eastern China has been identified over the years by right holders as a major distribution center for infringing goods. Right holders have repeatedly drawn attention to the City of Yiwu as an important distribution center for small commercial goods, including, for example, suspected counterfeit lighter fluid and yellow wristbands suspected of infringing the LIVESTRONG trademark of the Lance Armstrong Foundation. Many shipments of counterfeit goods to the developing world are suspected of having originated in Yiwu. Recent visits by U.S. officials indicated that enforcement efforts there have increased in recent years. For example, criminal trademark enforcement increased during the Mountain Eagle campaign. Other localities identified as problem areas by IPR owners include Ningbo, Cixi, Taizhou and Wenzhou.
Fujian Province is home to large-scale manufacturing, including athletic footwear companies in Jinjiang and Putian that have been the target of infringement allegations in long-running legal actions by U.S. trademark owners New Balance, Reebok, and Nike. The lack of prompt and complete action in these cases has allowed uninterrupted, long-term manufacturing of the subject goods. Other localities identified as problem areas by U.S. IPR owners include Quanzhou.
Progress Made – More Needed
Joint Commission on Commerce and Trade
On April 11, 2006, the third "elevated" meeting of the Joint Commission on Commerce and Trade (JCCT) was held in Washington, D.C. between U.S. Trade Representative Rob Portman, Secretary of Commerce Carlos Gutierrez and Chinese Vice Premier Wu Yi. Measured progress was made toward stepping up IPR enforcement efforts in China. The United States made clear that while China has made progress, the United States does not consider that China has met its 2004 JCCT commitment to significantly reduce IPR infringement levels.
Some of the key 2006 JCCT IPR results include actions by China against plants that produce pirated optical discs (however no plant operators have so far been criminally prosecuted); agreement to consider law enforcement cooperation to combat optical disc piracy; new rules issued by the Chinese government requiring computers to be pre-installed with licensed operating system software and government agencies to purchase only such computers; efforts to combat counterfeit and pirated goods displayed at trade fairs in China; ensure vigorous pursuit of individual IPR cases raised by the United States Government through the formal bilateral referral mechanism; and a commitment to intensify efforts to eliminate infringing products at major consumer markets in China, such as Silk Street Market in Beijing. The Chinese government further agreed to discuss Chinese production of active pharmaceutical ingredients (also known as bulk chemicals). U.S. industry is concerned that the uneven application of Chinese regulatory requirements can facilitate the production of counterfeit pharmaceutical products.
China has also made progress in implementing a number of IPR-related commitments made at the 2004 and 2005 JCCT meetings. At the 2006 JCCT China reaffirmed its commitment, made at previous JCCT meetings, to continue efforts to ensure use of legalized software at all levels of government, and to adopt procedures to ensure that enterprises use legal software, beginning with large enterprises and state-owned enterprises. As noted above, China recently fulfilled a 2005 JCCT commitment by adopting amended rules governing the transfer of administrative and
