While video game piracy continues to be a heated global topic within the industry, its prolific state in certain countries has drawn the ire of not only the video game industry, but the larger trade economy. China is one such area of the world where piracy, not just of video games but nearly all instances of intellectual property, has remained largely unchecked.
As a direct response to this, the Office of the U.S. Trade Representative has filed for formal consultations with China
regarding its failure to meet World Trade Organization obligations concerning intellectual property protection and enforcement in China.
Following the filing, Nintendo of America issued a statement offering “strong support” for the office's actions. Nintendo points out that more than 7.7 million counterfeit video game products from more than 300 Chinese factories and retailers have been seized during the past four years.
The Chinese government has likewise responded
to the U.S. complaint by expressing "great regret" and "strong dissatisfaction," according to a report by the Shanghai Daily. "The decision runs contrary to the consensus between the leaders of the two nations about strengthening bilateral trade ties and properly solving trade disputes," responded Wang Xinpei, spokesman for China's Ministry of Commerce. “"It will seriously undermine the cooperative relations the two nations have established and will adversely affect bilateral trade...The Chinese government has always been firm in protecting intellectual property rights and has attained well-known achievements.”
According to Nintendo, China has continued to be the leading production site and exporter for counterfeit Nintendo products, and has the largest domestic consumption, and in 2006 alone the company estimates that the overall industry lost $762 million due to piracy.
Commented Nintendo in a statement: “Despite the millions of counterfeit Nintendo products seized from retailers and manufacturing plants in China through the years, there has only been one criminal prosecution. Numerous factories, where tens of thousands of counterfeit Nintendo products were seized, escaped with only trivial fines or no penalty at all. And often these production sites continue to operate after products are seized. In order to avoid punishment, many counterfeiters are sophisticated and keep stock levels below the criminal thresholds and avoid keeping sales records.”
Each year Nintendo participates in the annual Special 301 process, by which the U.S. Trade Representative office solicits views from the industry and makes judgments about the adequacy of intellectual property laws and enforcement in foreign countries, including not only China, but Hong Kong, Brazil, Mexico and Paraguay as well.