April 6 (Bloomberg) -- The U.S. is set to file a complaint at the World Trade Organization over what it calls China's piracy of copyrighted movies and books, according to two people briefed by the administration.

The U.S. has prepared two separate trade cases against China, one saying that China sets too high a value on pirated movie or music disks before prosecuting violators, and another objecting to China's restrictions on the sale of foreign books and movies, the people said. The industry officials spoke on the condition they not be identified.

The complaints, which may be filed as early as next week, would be the first filed by the U.S. against China for intellectual property rights violations since China joined the WTO in 2001.

Lobbying groups representing companies such as Redmond, Washington-based Microsoft Corp.; Burbank, California-based Walt Disney Co., and Paris-based Vivendi SAestimate that the illegal copying of movies, music, software and books in China cost them more than $2.2 billion in 2006, more than the costs in any other country in the world. Nine of 10 DVDs sold in China are pirated, according to the Motion Picture Association of America.

U.S lawmakers have also said that the Bush administration hasn't pushed hard enough to get China to crack down.

In a letter to Bush in October, House Speaker Nancy Pelosi and other lawmakers said that ``no country in the world has done more to undermine American intellectual property than China.''

U.S. Trade Representative Susan Schwab said Feb. 22 that U.S. complaints were imminent. ``We are all going to run out of patience at some point, and that is going to be sooner rather than later,'' she said.

New Duties

Last week, the administration decided to levy new duties on imports of coated paper from China to compensate for Chinese subsidies to exporters.

China this week announced a new crackdown on hawkers of counterfeit goods and cut in half the criminal thresholds for prosecuting pirates. Just yesterday, the Supreme People's Court said that possession of 500 pirated disks, rather than 1,000, would justify criminal prosecution, according to a notice issued by the Chinese Embassy in Washington.

White House officials and industry lobbyists were still debating the specifics of the U.S. complaints case late yesterday. The administration may still adjust or delay the complaints to account for new announcements from China. Twice in the past year the Bush administration was poised to file a complaint only to delay at the last moment.

`Little Success'

Sean Spicer, a spokesman for the U.S. Trade Representative's office, declined to comment.

``China has continued to demonstrate little success in actually enforcing its laws and regulations in the face of the challenges created by widespread counterfeiting, piracy and other forms of infringement,'' the U.S. trade office said in a report released this week. ``One major factor is China's chronic underutilization of deterrent criminal remedies,'' the report said.

U.S. publishers and movie companies say restrictions on their ability to sell in China lead to more piracy there. U.S. movie producers face a cap on the number of movies they can show in China each year, and book publishers say they haven't been given the ability to sell their books there even if they comply with censorship requirements.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

Last Updated: April 5, 2007 19:36 EDT