prosecutions and other enforcement actions against Internet-based piracy and counterfeiting operations through a sustained national effort backed by appropriate resources. A recent internet enforcement campaign in which 558 cases were investigated and 375 websites were shut down demonstrates that when the Chinese government chooses to utilize its enforcement resources and personnel to deal with an IPR problem, it can produce results. The United States notes that at times particular enforcement actions are directed not only at copyright or trademark infringement, but also include infringement activities that may be considered more serious under the Chinese legal system. There is a concern that such actions lead to the public perception that the enforcement authorities are not focused on enforcing intellectual property specifically. This perception can be reinforced when effective enforcement measures are not taken against well-known infringers. The United States urges the Chinese government to demonstrate consistent resolve when fighting piracy and counterfeiting on the Internet by taking firm action against such infringers, so that they will adjust their business models to respect intellectual property laws, and thereby send a strong signal throughout the country.
Additionally, in October 2009, in response to allegations that some state-run libraries were providing unauthorized electronic copies of scientific and medical journal articles to for-profit entities, the NCAC, the Ministry of Education, the Ministry of Culture, and the National Anti-Pornography Office issued the Notice on Strengthening Library Protection of Copyright, which directs libraries to strictly adhere to the disciplines of the Copyright Law. This was a welcome step, and the United States will monitor implementation of this directive in 2010. In particular, the United States will look to the Chinese authorities to implement this directive through unannounced audits and inspections. Emphasis should be placed on preventing the unauthorized commercial sale of journals, either directly to consumers or through online intermediaries.
Counterfeiting remains pervasive in many retail and wholesale markets. This problem continues in spite of significant attention and resources from brand owners, administrative supervision, civil lawsuits, agreements with landlords, and attention from China's central government and from foreign governments. There have been some improvements, including judicial enforcement related to infringing activities in retail markets in Beijing and Shanghai. Other welcome steps include judicial authorities sentencing wholesalers to prison terms, and holding retail market landlords liable for failing to take appropriate measures to prevent infringement. Unfortunately, outside Beijing and Shanghai, there have been limited efforts to hold landlords liable for infringement that occurs on their premises. Even in Beijing and Shanghai, the relatively minor penalties levied by courts, and examples of landlords and infringers ignoring applicable court rulings, indicate that additional measures, including criminal sanctions, will be necessary to bring this problem under control.
There are a number of other obstacles to effective enforcement. These include high value and volume thresholds that must be met in order to initiate criminal prosecution of IPR infringement. U.S. trademark and copyright industries report that administrative fines are too low, and imposed
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