Last of the four areas of violation specified by USTR in its case against China. We started off with criminal penalties and we end in the same area:

Scope of Criminal Law on Piracy - see the full text below:

China’s Criminal Law (Articles 217 and 218) appears to provide for the prosecution of unauthorized reproduction of certain copyrighted works only when accompanied by unauthorized distribution. A person that pirates copyrighted works without distributing the pirated works would not be subject to criminal sanction. Based on this law, it appeared that China may be failing to fulfill its obligations under Articles 41and 61 of the TRIPS Agreement. However, China published a Judicial Interpretation April 7 that may be designed to address this problem. The United States would welcome this development and plans to discuss the new Judicial Interpretation with China during WTO consultations.

The argument here is that China’s Criminal Law mandates that the infringing producer must also engage in distribution of the product before there is criminal liability. You can see how this would leave out a large number of infringers. In citing TRIPs Articles 41 and 61, USTR is simply saying that here is an act of infringement that is not being dealt with appropriately - rather a vague argument, but fair enough.

You will also notice that the last two sentences of the paragraph cite last week’s Judicial Interpretation (I believe the official date of promulgation was April 5, not April 7). USTR was smart to throw in this disclaimer, because the Interpretation specifically explains that criminal liability does indeed include acts of production and/or distribution. In other words, China pre-empted this argument and, most likely, disposed of it. This one seems fairly clear to me, and I would guess that this final allegation made by USTR should be dropped in light of what the Supreme Court has said.