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 Widespread use of pirated software in government offices continues. Consistent with China's April 2004 JCCT commitments, Vice Premier Wu Yi directed that by the end of 2004, all government institutions at all levels would use only legal software. While the local governments of Shanghai, Beijing, Guangzhou, Zhejiang and several other provinces and municipalities have instituted measures requiring use of only legal software, this does not satisfy China's commitment to ensure that all government agencies at all levels use only legal software.

In 2004, China launched a national public awareness campaign as part of its JCCT commitment to educate the Chinese public on IPR protection. For example, the State Intellectual Property Office (SIPO) introduced a television program, "Intellectual Fortune," which is broadcast in 20 provinces nationwide. In April 2004, SIPO began publishing an English language insert in the China Daily English-language newspaper on intellectual property. China IPR trade journals also routinely report on specific efforts targeting students and industries. In February 2005, the National Copyright Administration hosted a nationally broadcast anti-piracy concert at Beijing Capital Stadium, with a television audience that was estimated by its sponsors at 500 million. It is too early to tell what the long-term implications of this campaign will be.

USTR, working closely with the U.S. Patent and Trademark Office, is preparing a detailed work plan for obtaining tangible results in the specific areas noted below, and plans to hold the Working Group's first meeting in Washington in early summer 2005.

While China's patent laws are largely compliant with the TRIPS Agreement, OCR submissions reveal that the narrow scope of patentable subject matter under Chinese law makes patents for transgenic plants and animals virtually unobtainable. A lack of clarity in laws involving generic drug patent infringement is contributing to the continued growth of counterfeit drugs. The State Food and Drug Administration has now provided in its new drug registration regulations coordination mechanisms between the health authority and patent office to prevent unauthorized registrations of patent-infringing products. However, we have no reliable data on how well these new regulations work.

In addition, OCR submissions report that China has yet to implement any meaningful data protections for pharmaceutical products, as required by Article 39.1 of the TRIPS Agreement.

The United States reaffirms its appreciation for the efforts of Vice Premier Wu Yi and the progress that has been made in some areas. Nevertheless, based upon the information received during the OCR, the United States concludes that China has failed to significantly reduce IPR infringement levels, as required under the JCCT. Consequently: