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US Takes Dim View of China's Copyright Violations

AS the Clinton administration outlines its policy on most-favored-nation trade status for China, another trade dispute between the two nations looms.

The issue is not human rights, but intellectual property rights.

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From audio cassette tapes to laser disks of the film ``Jurassic Park,'' ``China's failure to date to enforce its new copyright regulations has contributed to US losses of more than $800 million annually,'' the office of the United States Trade Representative states in a recent report.

Nintendo of America, which sells video games based on American software, estimates that 20 million counterfeit hardware units have been sold in China in recent years, leading to a $1.2 billion loss for the Japanese-owned company in hardware and software sales. Microsoft Corporation in Redmond, Wash., has also seen significant losses due to pirating of its computer software.

In addition to rampant use of illegally copied products within the country, ``China seems to be a source of counterfeit software that is being exported to places like Latin America and other parts of Asia,'' says Mark Traphagen, counsel for the Software Publishers Association, the principal trade association of the personal computer industry. He mentions a recent case in which Microsoft proved that a Chinese factory was exporting copies of its software, replicated ``right down to the reflective holograms'' on the package, but the damages awarded were only $400.

Under the ``special 301'' provisions of a 1988 US trade law, the US Trade Representative is currently reviewing whether China should be named a priority foreign country, subject to retaliatory sanctions, because of its intellectual property rights failings. A decision is due June 30.

A poorly funded judicial system and a lack of criminal penalties for copyright infringement are among the key problems in China, US officials say.

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