The World Trade Organization yesterday released its much-anticipated decision involving a U.S. complaint against China over its protection and enforcement of intellectual property rights.  The U.S. quickly proclaimed victory, with newspaper headlines trumpeting the WTO panel's requirement that China reform elements of its intellectual property laws.  For its part, China was conciliatory and offered to work with the international community to resolve the concerns raised by the decision.  Reuters notes that the Chinese reaction is far less combative than it has been other issues.

Why the muted response?  I suspect that it is because anyone who bothers to work through the 147 page decision will find that the headlines get it wrong.  The U.S. did not win this case, but rather lost badly. China is required to amend elements of its copyright law, but on the big issues of this case – border measures and IP enforcement – almost all of the contested laws were upheld as valid.  Further, the ramifications of this case extend well beyond China's laws into other areas such as ACTA, since it points to the considerable flexiblity that countries have in meeting their international obligations on these issues.

The case centred on three key issues:

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