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A new judicial interpretation issued by the Supreme People's Court on Thursday states that anyone who manufactures 500 or more counterfeit copies (discs) of computer software, music, movies, TV series and other audio-video products can be prosecuted and faces a prison term of up to three years.

Despite repeated police raids, hawkers of pirated discs re-emerge on Chinese streets as soon as the anti-piracy campaign begins to ebb.

The piracy issue has been a sore point in China-U.S. trade relations and the latest judicial change seems to be aimed at addressing overseas complaints that the country is too lenient with IPR violators.

According to judicial sources, courts around China settled 17,769 IPR protection cases in 2006. But most of these cases were handled by civil courts. There were only 2,277 criminal prosecutions, with 3,508 people convicted.

The new rules, jointly prepared by the Supreme People's Court and the Supreme People's Procuratorate, also widen the definition of a "serious IPR offender" -- anyone who produces more than 2,500 counterfeit copies can now be thrown into jail for up to seven years.

The rules are effective immediately, the top court said. They replace the 2004 rules whose net only extended to infringers who produced 1,000 pirated discs and which defined "serious offenders" as those who produced over 5,000 copies.

Critics expect a new surge of IPR cases in Chinese courts now that the new rules have come into effect. They constitute a stern warning to pirates that the government will not go soft on IPR infringement.

Sources with the Supreme People's Court said they made the change in order to deal with "new problems" in the crackdown on piracy.

"The courts will extend the protection of intellectual property rights and play to the full their role in punishing infringers and preventing crimes," a court spokesman said.

To fight rampant piracy, China lowered the counterfeit product threshold in 2004. Official statistics show that IPR cases that came to court in China rose 28 percent in 2005, the first year of the new rules.

That year, a total of 3,567 cases concerning the manufacture of fake products and illegal sales of pirated products went to criminal courts.

Courts have also been instructed to raise fines for convicted counterfeiters. "Fines can range from one to 15 times the illegal gains, or from 50 to 200 percent of the business turnover," according to the new judicial interpretation.

This will be welcome news to those who complain that monetary punishments for piracy violators are too low and that "the cost of IPR crime" remains low.

In January, the top court issued a notice ordering stricter penalties for IPR violators, saying "all illegal gains and manufacturing tools of IPR violators should be confiscated and their pirated products destroyed."

The new rules also tighten the rules on the granting of probation.

In another measure to cast the anti-piracy net wider, the top court has instructed IPR criminal courts to accept litigation cases filed by individual piracy victims, in addition to those filed by procurators.

The judicial change came as the state announced big seizures of pirated products and said it plans to improve the transparency of IPR trials by allowing foreigners to sit in.

Envoys of foreign governments and representatives of international organizations will be allowed to attend IPR trials if they wish, said Jiang Zengwei of the State Office of Intellectual Property Protection on Wednesday.

This will be the first time overseas representatives have been allowed to attend public IPR trials, an official from the top court told Xinhua.

Major trials will be publicized in the media.

Meanwhile, in the largest single crackdown on CD and DVD piracy in China's history, more than 1.81 million pirated CDs and DVDs were seized in a production factory in Guangzhou, capital of south China's Guangdong Province on March 17, the government announced on Tuesday.

Thirty production machines in 11 warehouses were confiscated and 13 people arrested in the case.

But a circular from the police authority said the fight against piracy was still very arduous, and should be a priority for public security departments nationwide.

The government has launched a "spring campaign" against illegal and pirated publications that will last until May.

People providing information about piracy crimes that lead to convictions can be rewarded by the police.