operators of online sales websites similar to those that have been imposed on the landlords of physical markets. The United States urges the Chinese Government to continue their efforts, begun during the Special Campaign, to improve IPR enforcement in online marketplaces to ensure that infringing products are removed and counterfeiters are punished.
The consumer shift to online sales has also changed the pattern of export trade; previously counterfeits were shipped in large containers, which resulted in large value and capacity seizures at the U.S. border. However, increasingly goods are sold by online traders in China (and elsewhere) and delivered to consumers by mail and express delivery service. This phenomenon is confirmed by the continued reduction in the level of seizures of wholesale quantities by customs officials in China and abroad. The United States urges Chinese customs authorities to inspect not only large containers, but also to increase their scrutiny of small consignment exports, especially Express Mail Service.
Trade Secrets
The United States is concerned about a growing number of cases in which important trade secrets of U.S. firms have been stolen by, or for the benefit of, Chinese companies. It has been difficult for some U.S. companies to obtain relief against those who have benefitted from this misappropriation, despite compelling evidence demonstrating misappropriation or theft. The United States is concerned that many more trade secrets cases involving U.S. companies and Chinese competitors go unreported because U.S. firms fear the cost and likelihood of failure of pursuing these cases through legal channels, as well as the possible commercial repercussions for bringing such cases to light. Although U.S. firms have recently seen some improvement in enforcement of other types of IPR-related cases, as described above, protecting trade secrets in China remains a significant challenge and is of growing concern. The United States and China have increased their bilateral exchanges on this important issue, including in the JCCT IPR Working Group and through senior level government engagements. Ensuring that companies are able to effectively protect and enforce their IPR in China, including trade secrets, is essential to promoting successful commercial relationships between U.S. and Chinese firms.
Market Access and Technology Use
In addition to the risks of IPR infringement, including trade secret theft, and the difficulties discussed above regarding effective enforcement, many companies remain very concerned that the Chinese government has adopted policies or practices that systematically disadvantage foreign rights holders, by inappropriately conditioning market access and investment approvals, and other government benefits on the sale or licensing of IPR and other proprietary information to domestic Chinese entities.
While the United States welcomes China's commitment, reiterated in the joint fact sheet issued during Vice President Xi Jinping's visit to Washington on February 14, 2012 "that technology transfer and technological cooperation shall be decided by businesses independently and will not be used by the Chinese government as a pre-condition for market access", the United States will continue to work with China to develop a mechanism designed to resolve, in an expeditious manner, any concerns regarding the implementation of this commitment.
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