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Tuesday, February 21, 2012, Alert No. 2,343.
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PR China Agrees to Improve Market Access for US Movie Companies

2/17. The White House news office issued a release regarding the long running World Trade Organization (WTO) proceeding commenced in 2007 by the U.S. against the People's Republic of China (PRC) regarding access barriers for U.S. movie, record, and other content industries, and other issues. The release states that the US and PRC have entered into an agreement.

The Office of the U.S. Trade Representative (OUSTR), which filed the complaint on behalf of the U.S., issued a copy of the same release.

The US prevailed before the WTO on this market access issue. The PRC has not yet come into compliance with its treaty obligations, or the WTO ruling.

The White House new office release provides little information. Also, neither the White House news office, nor the OUSTR, released the text of any written agreement.

The release states that the PRC "has agreed to significantly increase market access for U.S. movies in order to resolve outstanding issues".

Joe BidenVice President Joe Biden (at left) stated in this release that "This agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese audience".

USTR Ron Kirk stated in this release that "U.S. studios and independent filmmakers cite China as one of their most important world markets, but barriers imposed by China and challenged by the United States in the WTO have artificially reduced the revenue U.S. film producers received from their movies in the Chinese market".

The release contains only one paragraph that describes the contents of the agreement. "The agreement allows more American exports to China of 3D, IMAX, and similar enhanced format movies on favorable commercial terms, strengthens the opportunities to distribute films through private enterprises rather than the state film monopoly, and ensures fairer compensation levels for U.S. blockbuster films distributed by Chinese state-owned enterprises.  The agreement will be reviewed after 5 years to ensure that it is working as envisioned.  If necessary, the United States can return to the WTO to seek relief."

Chris Dodd, head of the Motion Picture Association of America (MPAA), stated in a release that this is a "major step forward" and a "landmark agreement".

He said that this agreement "will return a much better share of the box office revenues to U.S studios, revising a two-decade-old formula that kept those revenues woefully under normal commercial terms, and it will put into place a mechanism that will allow over 50% more U.S. films into the Chinese market."

Background. The US filed its complaint (nominally a request for consultations) with the WTO on April 10, 2007. It addressed the PRC's failure to protect intellectual property rights in movies, music, books and other content, and the PRC's access barriers for US content distributors. See, story titled "US to Complain to WTO Regarding PR China's Failure to Protect IPR" in TLJ Daily E-Mail Alert No. 1,562, April 9, 2007.

The US requested the establishment of a Dispute Settlement Panel (DSP) on August 13, 2007. See, story titled "US Requests WTO Dispute Settlement Panel Re PRC Failure to Protect IPR" in TLJ Daily E-Mail Alert No. 1,623, August 15, 2007.

On January 26, 2009, the WTO released a panel report [PDF] finding that the PRC's copyright law and customs measures are "inconsistent" with the Trade Related Aspects of Intellectual Property (TRIPS) Agreement. See, story titled "WTO Panel Rules in PRC IPR Case" in TLJ Daily E-Mail Alert No. 1,889, February 2, 2009.

On December 21, 2009, the Appellate Body of the WTO issued its report [195 pages in PDF], upholding the findings and conclusions of the DSP's report. See, story titled "WTO Appellate Body Affirms in Movie and Music Case" in TLJ Daily E-Mail Alert No. 2,029, December 29, 2009.

US VP Biden and PRC VP Xi Address Trade and IP Issues

2/17. U.S. Vice President Joe Biden and People's Republic of China (PRC) Vice President Xi Jinping held meetings, and gave speeches, regarding trade, market access, intellectual property, investment, and other issues. Xi traveled to the US on February 14-17, 2012.

US VP Biden gave a speech at the Department of State's (DOS) main building in Washington DC on February 14. He praised the "international system that enables rapid development grounded in rules that apply with equal measure to all nations"

Biden said that he and Xi "spent a great deal of time discussing the areas of our greatest concern, including the need to rebalance the global economy, to protect intellectual property rights and trade secrets, to address China’s undervalued exchange rate, to level the competitive playing field and to prevent the forced transfer of technology, and to continue a constructive dialogue on policies that would benefit our citizens and the world."

Biden also stated that "Despite our differences, China and the United States are working more closely together on a broader range of issues than ever before. These include ... cyber security ..."

PRC VP Xi stated in his speech at the same event that "The purpose of my visit is to implement the agreement between our two presidents, enhance China-U.S. strategic trust, broaden practical cooperation, deepen people-to-people friendship, and further advance the cooperative partnership between our two countries." (Translated in English by DOS.)

He said that "The growth of China-U.S. relations has brought huge benefits to the two countries and two peoples, and lent a strong impetus to peace, stability, and prosperity in the Asia-Pacific region and the world at large. The China-U.S. relationship has become one of the most important, dynamic, and promising bilateral relationships in the world."

Also, "We should address each other's economic and trade concerns through dialogue and consultation, not protectionism, and uphold the mutually beneficial pattern of China-U.S. economic relations and trade", said Xi.

The two Vice Presidents also spoke at the U.S. Chamber of Commerce in Washington DC. Biden stated there that "China has responded to our concerns about procurement policies and established a high-level body to strengthen enforcement of intellectual property rights as well." See, transcript.

He continued that "we have work to do -- especially on issues like discriminatory subsidies and financing, protecting intellectual property and trade secrets and ending the practice of making the transfer of technology a requirement for doing business. The United States will also work to ensure that all countries play by the international rules. We’ve brought cases that have challenged unfair trade practices".

Biden also said that "the U.S. is working to be responsive to Chinese concerns as well. For example, the United States is expending our visa processing capacity in China to help reduce delays and encourage Chinese travel to the United States."

Xi stated at this event that he met with both Biden and President Obama. "We had an in-depth exchange of views on economic and trade issues".

Xi said that "We agree that China-U.S. economic relationship is highly mutually complimentary and full of dynamism. The two sides should quicken our steps to build a comprehensive and mutually beneficial economic partnership, advance the investment and trade package plan on cooperation, address economic frictions through dialogue and cooperation instead of by protectionist means so as to promote a steady recovery and growth of the two economies and the world economy as a whole."

He also said the "With regard to the U.S. concerns concerning trade imbalance, IPR protection, indigenous innovation and investment environment, the Chinese side has taken steps to address them and will continue to do so."

"We hope that the U.S. side will adopt the same positive attitude and take credible steps as soon as possible to address Chinese concerns on lifting restrictions on high-tech exports to China and providing a level playing field for Chinese companies investing in America", said Xi.

The two Vice President also gave speeches at an event in Los Angeles, California, on February 17.

VP Biden stated in his speech that "seven of our 15 largest export markets -- America's export markets -- are in Asia, with China now the foremost among them. Last year alone, the United States exported to China more than $100 billion worth of goods and services, supporting hundreds of thousands of American jobs. And those jobs that are tied to exports are quality, high-paying jobs, estimated to be worth more than 15 percent more than all other jobs in America."

He stated that "the faster the U.S. economy grows, the more Chinese citizens will benefit as well. So there is a great potential for both of us in working together to increase and solidify this relationship.

Biden said that Xi "indicated that China wants to invest more in the United States. And we're working to make that easier, and there's a whole lot of governors here who are looking forward to that."

He continued that "We very much want to see more of our businesses able to sell their goods and services in China.  And Vice President Xi has committed to help make that possible. In this recent visit, China has opened its market to American auto insurers and has taken concrete steps to enforce intellectual property rights, and it has plans to reform its tax system, which will help increase demand for American goods and services by lowering taxes on so-called luxury goods."

He concluded that "we will continue to work with the Vice President and the Chinese government to make sure that everyone is playing by the same rules on a level playing field."

Rep. Smith and Sen. Brown Urge PRC to Observe Its WTO Commitments

2/13. Rep. Christopher Smith (R-NJ) and Sen. Sherrod Brown (D-OH), the Chairman and Co-Chairman of the Congressional Executive Commission on China (CECC), issued a joint release regarding the People's Republic of China (PRC), and Vice President Xi Jinping's visit to the US on February 13-17, 2012.

The release references "troubling signs that call into question China's commitment to commercial rule of law and worker rights". It also states that the World Trade Organization (WTO) "recently decided that Chinese restrictions on raw material exports violate WTO rules."

Rep. Smith stated that "The WTO decision on raw materials is just further evidence of the Chinese government's willingness to cheat and game the system at the expense of our companies and our workers".

The release also references "high-profile reports about the Foxconn manufacturing company detailing horrific conditions at Chinese factories, including dangerous work environments, long hours, and low wages".

Sen. Brown stated that "The reports underscore the need for China to allow workers effective and independent labor representation, and for the Chinese government, domestic Chinese companies, and multinational companies to do much more to improve China's poor worker safety record".

Sen. Brown also stated that "As China's likely next leader, Vice President Xi has a unique opportunity to improve relations with the United States ... But in order to win the respect of the American people, Vice President Xi must make every effort to ensure China plays by the rules, abides by its international obligations, and guarantees the fundamental rights of all its citizens."

The two urged VP Xi to "End unfair trading practices, such as currency manipulation, industrial policies, and the use of quotas and subsidies, that are inconsistent with China's commitments to the World Trade Organization and incompatible with the rule of law".

However, they did not mention intellectual property.

More US China News

2/17. The U.S. China Economic and Security Review Commission released a report by David Herbert, a member of its staff, titled "China Media Watch: Chinese State-Run Media Depicts Xi Visit as Victory Lap, Lecture Tour". It states that "Chinese language media coverage of Vice President Xi Jinping’s visit to the United States portrays him as a tough-talking advocate for his native land, able to dress down American lawmakers and business leaders."

2/15. Secretary of Commerce John Bryson gave a speech in Washington DC in which he stated that "The U.S. and China will succeed by working together to deliver strong, sustainable and balanced growth. We can achieve that through: expanded trade based on adherence to global rules and respect for intellectual property; open investment in each other’s economies; and policies that support global innovation, fair competition, and a sound balance between consumption and savings. We have our differences. But I believe we can find common ground and forge a future that will benefit China, America and the entire world."

In This Issue
This issue contains the following items:
 • PR China Agrees to Improve Market Access for US Movie Companies
 • US VP Biden and PRC VP Xi Address Trade and IP Issues
 • Rep. Smith and Sen. Brown Urge PRC to Observe Its WTO Commitments
 • More US China News
Washington Tech Calendar
New items are highlighted in red.
Tuesday, February 21

The House will not meet on the week of Monday, February 20, through Friday, February 24, except in pro forma sessions. The House will meet pro forma at 12:00 NOON on February 21.

The Senate will not meet on the week of Monday, February 20, through Friday, February 24, except in pro forma sessions. The Senate will meet pro forma at 12:00 NOON on February 21.

8:00 - 10:00 AM. Broadband Census News LLC will host a panel discussion titled "Cybersecurity Legislation in Congress: Where Does it Stand?". The speakers will be Ari Schwartz (Department of Commerce), Larry Clinton (Internet Security Alliance), Tommy Ross (office of Sen. Harry Reid (D-NV)), Denis Zheng (staff of Senate Homeland Security and Governmental Affairs Committee), and Joseph Menn (Reuters). The price to attend is $47.12. See, notice and registration page. This event is also sponsored by the Comcast, Google, ICF International, National Cable & Telecommunications Association (NCTA), Telecommunications Industry Association (TIA) and US Telecom.. Location: Clyde's of Gallery Place, 707 7th St., NW.

12:15 - 2:00 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will host a brown bag lunch. The topic will be three federal advisory committees: the President's Council of Advisors on Science and Technology (PCAST), the NTIA's Commerce Spectrum Management Advisory Committee (CSMAC) and the FCC's Technology Advisory Committee (TAC). For more information, contact Steve Sharkey at steve dot sharkey at t-mobile dot com. Location: T-Mobile, Suite 800, 601 Pennsylvania Ave., NW, North Building.

12:15 - 2:00 PM. The Federal Communications Bar Association (FCBA) will host a brown bag lunch titled "The First Amendment in Telecom Law". The speakers will be Jacob Lewis (FCC Associate General Counsel), Chuck Tobin (Holland & Knight), Coriell Wright (Free Press), Megan Brown (Wiley Rein). For more information, contact Drew Shenkman at drew dot shenkman at hklaw dot com or Brendan Carr at Bcarr at wileyrein dot com.). Location: Holland & Knight, Suite 100, 2099 Pennsylvania Ave., NW.

Deadline for the Electronic Privacy Information Center's (EPIC) to file its reply to the Federal Trade Commission's (FTC) opposition to its Motion for Temporary Restraining Order and Preliminary Injunction [30 pages in PDF]. This action pertains to whether Google's new privacy policy, scheduled to take effect on March 1, violates the FTC's Decision and Order [7 pages in PDF] dated October 13, 2011. See, story titled "EPIC Sues FTC to Compel Enforcement of Google Privacy Order" in TLJ Daily E-Mail Alert No. 2,338, February 16, 2012.

Deadline to submit FY 2012 Form 470 to the Federal Communications Commission's (FCC) Universal Service Administration Company (USAC). This is the e-rate subsidy program's Description of Services Requested and Certification Form.

Wednesday, February 22

Ash Wednesday.

The House will not meet.

The Senate will not meet.

10:30 AM - 12:00 NOON. The Bipartisan Policy Center (BPC) will host an event titled "Cyber Security". Federal Communications Commission (FCC) Chairman Julius Genachowski will give a speech. There will then be a panel discussion. The other participants will be Greg Schaffer (head of the DHS's Office of Cybersecurity and Communications), Michael Hayden (Co-chair of the BPC Cyber Security Task Force), Stewart Baker (Steptow & Johnson), Michael Glenn (CenturyLink), and Andy Ogielski (Renesys Corporation). See, notice. For more information, contact Ashley Clark at 202-637-1456 or aclark at bipartisanpolicy dot org. The FCC will webcast this event. Location: BPC, Suite 1000, 1225 Eye St., NW.

Thursday, February 23

The House will not meet.

The Senate will not meet.

10:00 - 11:30 AM. The Information Technology and Innovation Foundation (ITIF) will host an event titled "Eddie Lazarus Reflects on a Dramatic Tenure as Chief of Staff of the FCC". See, notice. Location: ITIF/ITIC: Suite 610, 1101 K St., NW.

1:00 - 2:00 PM. The American Bar Association (ABA) will host a webcast event titled "From Metatags to Sponsored Ads: The Evolution of the Internet-Related Trademark Infringement Doctrine". The speakers will be Chad Doellinger (Katten Muchin Rosenman), Jennifer Mikulina (McDermott Will & Emery), and Uli Widmaier (Pattishall McAuliffe). CLE credits. Prices vary. See, notice.

Deadline to submit comments to the Copyright Office (CO) in response to it notice in the Federal Register regarding revisions to its fee schedule. The CO seeks comments on two questions: "First, with respect to the basic registration fee, should special consideration be provided to individual author-claimants registering a single work that is not a work made for hire? Second, are there any special services and corresponding fees the Office should expand, improve or add to its offerings at this time, including, for example, additional expedited services and fee options for copyright owners and their representatives?" See, Federal Register, Vol. 77, No. 15, Tuesday, January 24, 2012, at Pages 3506-3508.

Friday, February 24

The House will not meet.

The Senate will not meet.

Supreme Court conference day. See, calendar. Closed.

8:30 AM - 4:00 PM. The Department of Defense's (DOD) Defense Intelligence Agency Advisory Board will hold a closed meeting. See, notice in the Federal Register, Vol. 77, No. 10, Tuesday, January 17, 2012, at Pages 2277-2278. Location: Boling Air Force Base.

8:45 AM - 1:30 PM. The George Mason University School of Law will host a conference titled "The Digital Inventor: How Entrepreneurs Compete on Platforms". There will be two panel discussions, titled "Platforms, Modularity, and Complementary Goods" and "Patent Litigation: Software Patents, Licensing, and Mobile OS Platforms". There will also be several presentations and speeches, including "Design, Institutions, and the Evolution of Platforms" and "Why Walled Gardens Isn't Inconsistent with Open Innovation: Understanding How Ecosystems Management Promotes Progress". CLE credits. Prices vary. Location: GMU law school, 3301 N. Fairfax Dr., Arlington, VA.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Public Notice (PN) [21 pages in PDF] regarding Auction 901, which will auction high cost universal service subsidies through reverse competitive bidding. It is also titled "Mobility Fund Phase I Auction". The FCC released this PN on February 2, 2012. It is DA 12-121 in AU Docket No. 12-25. See also, notice in the Federal Register, Vol. 77, No. 28, Friday, February 10, 2012, at Pages 7152-7162.

Monday, February 27

The House will meet. Votes will be postponed until 6:30 PM.

4:00 PM. The House Intelligence Committee (HIC) will hold a closed closed hearing titled "Ongoing Intelligence Activities". See, notice. Location: Room HVC-304, Capitol Visitor Center.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response the FCC's Public Notice (PN) regarding LightSquared's Petition for Declaratory Ruling. The FCC released this PN on January 27, 2012. See also, correction to this PN, also released on January 27. This PN is DA 12-103 in IB Docket No. 11-109 and ET Docket No. 10-142.

Tuesday, February 28

9:30 - 11:00 AM. The Information Technology and Innovation Foundation (ITIF) will release a report, and host a panel discussion, titled "Confronting Chinese Innovation Mercantilism". The speakers will be Sen. Jeff Merkley (D-OR), Robert Atkinson (ITIF), Morgan Reed (Association for Competitive Technology), and Alan Wolff (Dewey & LeBoeuf). Free. Open to the public. See, notice. Location: Room G11, Dirksen Building, Capitol Hill.

10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Research and Science Education will hold a hearing titled "An Overview of the National Science Foundation Budget for Fiscal Year 2013". The witnesses will be Subra Suresh, Director of the National Science Foundation (NSF), and Ray Bowen, Chairman of the National Science Board. The HSC will webcast this hearing. See, notice. Location: Room 2318, Rayburn Building.

10:00 AM. The House Homeland Security Committee's (HHSC) Subcommittee on Counterterrorism and Intelligence will hold a hearing titled "Federal Government Intelligence Sharing with State, Local and Tribal Law Enforcement: An Assessment Ten Years After 9/11". See, notice. Location: Room 311, Cannon Building.

12:00 NOON - 1:30 PM. Julie Brill (FTC Commissioner) and Anne Cavoukian (Commissioner of Canada's Office of the information and Privacy) will speak at an event hosted by the American Bar Association (ABA) titled "Privacy by Design: What All Companies Need to Do Now". No CLE credits. The price to attend is $50. See, notice.

12:00 NOON - 1:30 PM. The Federal Communications Commission's (FCC) Enforcement Bureau (EB) will hold an event at which EB Bureau Chief Michele Ellison and EB division chiefs and front office managers will speak. The FCBA states that this is an FCBA event. Location: Hogan Lovells, 555 13th St., NW.

2:00 - 3:15 PM. The President's National Security Telecommunications Advisory Committee (NSTAC) will meet by teleconference. The agenda includes an update from Gregory Schaffer (DHS Assistant Secretary for Cybersecurity and Communications), an update on the cloud computing from Mark McLaughlin, and an update on the national public safety broadband network scoping effort from Scott Charney and Michael Laphen. See, notice in the Federal Register, Vol. 77, No. 27, Thursday, February 9, 2012, at Page 6813.

6:30 - 8:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee and the Women's Bar Association of the District of Columbia (WBADC) will host an event titled "An Evening of Mentoring for Communications Lawyers". Prices vary. See, WBADC notice. Register at the WBADC web site, using the password FCBAMENTOR. Location: Hogan Lovells, 555 13th St., NW.

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