The World Trade Organisation on Monday ruled against China in a copyright protection dispute with the United States -- a move hailed by Washington as "an important victory."
"The Panel recommends ... That China bring the Copyright Law and the Customs measures into conformity with its obligations," the WTO dispute settlement panel said in the ruling.
The clash over intellectual property was the fourth case involving a formal US challenge to trade practices in China, whose ballooning trade surplus and handling of counterfeit goods has in recent years been a political flash point.
The United States had claimed in its complaint first filed in 2007 that Beijing's legal structure for protecting and enforcing copyright and trademark protections is unfairly deficient and does not comply with WTO rules.
Chinese-made counterfeit goods -- from software and DVDs to luxury leather goods and watches -- are widely available in the US market.
Washington's complaint targeted alleged shortcomings in patent protection for imported products in China, as well as in Chinese copyright law.
It also claimed that some counterfeit goods seized by Chinese authorities find their way back onto the market.
Today, the WTO ruled that Chinese copyright law and some customs measures failed to provide sufficient protection.