By Kevin E. Noonan –On Apr 30th, Ambassador Michael B.G. Froman, U.S. Trade Representative (USTR) released the 2014 Special 301 Report. According to a USTR website, a “USTR is entirely committed to unlocking event for those Americans to share their inventions and creations with people all over a universe though their work being infringed or misappropriated.” Further, “[t]he Obama Administration is committed to suggestive and postulated rendezvous with trade partners — from China to India to Canada — with a idea of solution egghead property-related concerns so that Americans and American firms can contest on a turn personification margin in those markets,” according to USTR Froman. The Report hails Italy, a Philippines, and Israel “on their dismissal from a Watch List.”
The Report records that a USTR has been arising Reports for 25 years, and that over this time there has been “significant swell in a accumulation of countries.” The Report highlights Korea as a nation that went from a Watch List to being one with “a repute for cutting-edge origination as good as high-quality, high-tech manufacturing” carrying “state-of-the-art standards of egghead skill rights insurance and enforcement.” Italy and a Philippines, newly off a Watch List are also mentioned for their improvements in IP insurance over a past year, and a Report also calls out Australia, Israel, Japan, Qatar, Spain, Taiwan, a United Arab Emirates, and Uruguay as countries that have done “important advances in many other markets over a past 25 years.”The Report is promulgated pursuant to Section 182 of a Trade Act of 1974, as nice by a Omnibus Trade and Competitiveness Act of 1988 and a Uruguay Round Agreements Act (enacted in 1994). The Trade Representative is mandatory underneath a Act to “identify those countries that repudiate adequate and effective insurance for IPR or repudiate satisfactory and estimable marketplace entrance for persons that rest on egghead skill protection.” The Trade Representative has implemented these supplies by formulating a “Priority Watch List” and “Watch List.” Placing a nation on a Priority Watch List or Watch List is used to prove that a nation exhibits “particular problems . . . with honour to IPR protection, enforcement, or marketplace entrance for persons relying on egghead property.” These watch lists are indifferent for countries carrying “the many toilsome or gross acts, policies, or practices and whose acts, policies, or practices have a biggest inauspicious impact (actual or potential) on a applicable U.S. products.”
This Report, on a state of egghead skill rights worldwide, identifies 10 countries on a “Priority Watch List” and another 26 countries on a “Watch List,” all relating to deficiencies in egghead skill insurance in these countries. The Priority Watch List in a 2014 Report cites Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela, countries that were also on a list final year. Countries on this list “do not yield an adequate turn of IPR insurance or enforcement, or marketplace entrance to persons relying on egghead skill protection.” On a Watch List this year are Barbados, Bolivia, Brazil, Bulgaria, Canada, Columbia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Jamaica, Kuwait, Lebanon, Mexico, Paraguay, Peru, Romania, Tajikstan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan, and Vietnam; compared to final year, Belarus, Israel, Italy, and a Philippines have been private from a list. The Report lists a “wide operation of concerns, including “(a) a decrease in IPR protection, enforcement, and marketplace entrance for persons relying on IPR in a series of trade partners; (b) reported inadequacies in trade tip insurance in China, India, and elsewhere, as good as an augmenting occurrence of trade tip misappropriation; (c) discouraging “indigenous innovation” policies that might foul waste U.S. rights holders in China; (d) a stability hurdles of copyright robbery over a Internet in countries such as Brazil, China, India, and Russia; (e) marketplace entrance barriers, including nontransparent, discriminatory or differently trade-restrictive measures, that seem to block entrance to healthcare; and (f) other ongoing, systemic IPR coercion issues in many trade partners around a world.”
The Report records a USTR’s continued efforts to raise open engagement, “to foster sound, well-balanced assessments of IPR insurance and coercion efforts of sole trade partners, and to assistance safeguard that a Special 301 examination is formed on a full bargain of a several IPR issues in trade partner markets.” In serve to created comments (“from over 100 meddlesome parties, including 21 trade partner governments”), there was a open conference on Feb 24, 2014 that listened testimony from “representatives of unfamiliar governments, industry, and non-governmental organizations” (where a comments, video, and twin of a conference are accessible on a USTR website).
The Report accentuates coordination between “all applicable agencies within a [Federal] government, sensitive by endless conference with” stakeholders, unfamiliar governments, a Congress and “other meddlesome parties.” The comment of correspondence from a countries listed in a Report were conducted on a “case-by-case” basement that “tak[es] into comment opposite factors such as a trade partner’s turn of development, a general obligations and commitments, a concerns of rights holders and other meddlesome parties, and a trade and investment policies of a United States.” The Special 301 Subcommittee perceived submit from stakeholders and tighten to 100 trade partners, selecting a 10 Priority Watch List and 27 Watch List countries from this group.
The Report contains dual Sections (on “Developments in Intellectual Property Rights Protection and Enforcement” and “Country Reports”) and several Annexes on sole issues (the orthodox bases of a Report, supervision technical assistance an ability building efforts and WIPO Internet treaties issues). The Report records some “positive developments” in a past year, including advent by Algeria to a WIPO Internet Treaties, amendments to China’s heading laws (the Report job these “long-sought reforms”), encouragement of trade tip insurance in a European Union, and a origination in Paraguay of a National Directorate of Intellectual Property, obliged for “the administration of copyrights, trademarks, patents, industrial designs, and geographic indications.” Other certain developments enclosed actions by a governments of Israel, Italy, and a Philippines ensuing in dismissal of these countries from a Watch List in 2014.
The Report contains a subsection on “best practices” among U.S. trade partners, including “encourag[ing] trade partners to work with a United States to arise jointly agreed-upon movement skeleton to allege a insurance and coercion of IPR,” privately observant a actions in Bulgaria and Pakistan. Cooperation between governments is also mentioned, privately with courtesy to Paraguay, Algeria, and a Philippines, as good as “innovative mechanisms that capacitate supervision and private zone rights holders to willingly benefaction or permit IPR on mutually-agreed terms and conditions.” These embody a use of existent IPR to allege routine goals and innovation, specific examples of that are a Medicines Patent Pool underneath a auspices of a World Health Organization and a WIPO Re:Search Consortium among a U.S., Brazil, and South Africa.
Several initiatives were also mentioned. As in a Reports from a final dual years, these enclosed a Trans-Pacific Partnership Agreement, between a U.S. and Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam, and in addition, Canada, Mexico, and Japan; a Transatlantic Trade and Investment Partnership between a U.S. and a EU; actions by a World Trade Organization in support of IP rights; a Anti-Counterfeiting Trade Agreement (ACTA) between a U.S. and Australia, Canada, Japan, South Korea, Mexico, Morocco, New Zealand, Singapore; that has been sealed by Australia, Canada, Japan, South Korea, Mexico, Morocco, New Zealand, Singapore, and a United States (and was sealed by a EU though not validated by a European Parliament), with Japan apropos a initial signatory to deposition a instrument of acceptance; shared and informal initiatives, including giveaway trade agreements and Trade and Investment Framework Agreements; and a USTR Trade Preference Program Reviews such as a Generalized System of Preferences (GSP) module relating to Russia, Lebanon, and Uzbekistan, and informal programs including a Caribbean Basin Economic Recovery Act (CBERA). Finally, a Representative “looks brazen to stability rendezvous with trade partners in bilateral, regional, and multilateral fora to urge a tellurian IPR environment”; including a U.S.-EU Summit, and in a Asia Pacific Economic Cooperation (APEC) forum, and a Organization for Economic Cooperation and Development (OECD).
Once again this year a Report contains a subsection on trade secrets and forced record send identified as problems in “a inclusive accumulation of attention sectors” that embody “information and communication technologies, services, biopharmaceuticals, manufacturing, and environmental technologies.” The hazard of trade tip misappropriation is “escalating,” and “imposes poignant costs on U.S. companies and threatens a confidence of a United States,” “threatens to lessen U.S. competitiveness around a globe, and puts American jobs during risk.” Particularly remarkable in a Report in this courtesy is China, with trade tip burglary being reported by “various sources,” including in a announcement entitled Foreign Spies Stealing U.S. Economic Secrets in Cyberspace, by a Office of a National Counterintelligence Executive (ONCIX) that settled that “Chinese actors are a world’s many active and determined perpetrators of mercantile espionage.” Theft was cited as involving “departing employees, unsuccessful corner ventures, cyber penetration and hacking, and injustice of information submitted to supervision entities for functions of complying with regulatory obligations,” with remedies in China being “difficult to obtain.” The Report cited a announcement by a U.S. Intellectual Property Enforcement Coordinator on Feb 20, 2013 of “Administration Strategy on Mitigating a Theft of U.S. Trade Secrets,” that “highlights U.S. efforts to fight a burglary of trade secrets that could be used by unfamiliar governments or companies to benefit an astray mercantile advantage by harming U.S. origination and creativity.” These include:
• “Focusing tactful efforts to strengthen trade secrets overseas;
• Promoting intentional best practices by private attention to strengthen trade secrets, including information security, earthy security, and tellurian resources policies;
• Enhancing domestic law coercion operations, generally by a activities of a Department of Justice, Federal Bureau of Investigations, Department of Defense, and a National IPR Coordination Center;
• Improving domestic legislation to strengthen opposite trade tip theft, [and]
• Conducting open recognition campaigns and stakeholder overdo to inspire all stakeholders to be wakeful of a dangers of trade tip theft.”
The Report also records that “[t]rade tip burglary can be noticed as a form of forced record send that unfamiliar actors might use to criticise U.S. rival advantage.” Certain unfamiliar governments, underneath a guise of compelling “indigenous innovation” can adopt “trade-distortive policies,” citing as examples:
• Requiring a send of record as a condition for permitting entrance to a market, or for permitting a association to continue to do business in a market;
• Directing state-owned enterprises in innovative sectors to find non-commercial terms from their unfamiliar business partners, including with honour to a merger and chartering of IPR;
• Failing to effectively make IPR, including patents, trademarks, trade secrets, and copyrights, thereby permitting firms to benefit rival advantages from their misappropriation or transgression of another’s IPR;
• Failing to take suggestive measures to forestall or deter cyber intrusions;
• Requiring use of, or providing preferences to, products or services in that IPR is possibly grown or owned locally, including with honour to supervision procurement;
• Manipulating a standards expansion routine to emanate astray advantages for domestic firms, including with honour to a terms on that IPR is licensed;
[and]
• Requiring nonessential avowal of trusted business information for regulatory approval, or unwell to strengthen such information.
New this year is a subsection on IPR and a environment, a Report saying that “[s]trong IPR insurance is vicious for development, and is vicious to responding to environmental challenges, including meridian change.” Examples embody generally compelling investment in “green” technologies and compelling jobs in a immature sector, and that “businesses are demure to deposit or enter into record send arrangements in countries that miss effective IPR insurance and enforcement.” Cited as examples of bureaucratic actions and activities that “may have a unintended outcome of undermining inhabitant and tellurian efforts to residence critical environmental challenges” are India’s National Manufacturing Policy requiring mandatory chartering and a advocacy to “multilateralize” this proceed by a UN Framework Convention on Climate Change that will “discourage rather than foster a investment in, and chain of, immature technologies, including those technologies that minister to meridian change instrumentation and mitigation.” The Report also reiterates a U.S. government’s joining to “ensure strong IP insurance and coercion [] as an environmental as good as mercantile imperative.”
A poignant partial of a Report focuses on “trends” in counterfeiting and copyright piracy, as it has in other years. This area “continue[s] on a tellurian scale,” according to a Report, “involving a mass prolongation and inclusive sales of a immeasurable array of feign goods, including tawdry semiconductors, medicines, health caring products, food and beverages, car parts, such as atmosphere bags, aircraft parts, attire and footwear, toothpaste, shampoos, razors, electronics, batteries, chemicals, sporting goods, suit pictures, and music.” The Report asserts that “consumers, legitimate producers, and governments are spoiled by prevalent heading counterfeiting and copyright piracy,” accentuating mistreat to a open “by fake and potentially dangerous tawdry products, including medicines, automobile and aeroplane parts, and semiconductors.” Used as an instance is a news from a International Chamber of Commerce and a Federation of Indian Chambers of Commerce and Industry “analyzing 7 pivotal attention sectors exposed to counterfeiting, piracy, and smuggling, e.g., automotive parts, alcohol, mechanism hardware, mobile phones, finished foods, personal goods, and tobacco products.” This investigate showed waste in India alone of $11.9 billion and a detriment to a Indian supervision of $4.26 billion. The Report also sets onward a following specific trends:
• Sustained expansion in a robbery of copyrighted products in probably all formats as good as counterfeiting of copyright goods. The impasse of rapist enterprises continues to rise, mostly since robbery and counterfeiting offer huge boost and tiny risk. Such enterprises need tiny up-front collateral investment, and even when they are rescued and prosecuted, a penalties imposed on them in many countries are really low and therefore offer tiny or no anticipation opposite serve infringements. Instead, a penalties are noticed merely as a cost of doing business;
• Continued expansion in a online sale of pirated and tawdry tough products that will shortly transcend a volume of such products sole by travel vendors and in other earthy markets. Enforcement authorities, unfortunately, face problems in responding to this trend. Online advertisements for a sale of unlawful earthy products that are delivered by demonstrate mail shipments or by tiny consignments are found in many places;
• A continued boost in a use of legitimate services to broach infringing goods, origination it some-more formidable for coercion officials to detect these goods;
• An boost in a use of shipping tawdry products alone from labels and wrapping in sequence to hedge coercion efforts; and
• The presentation of Media Box piracy, whereby those boxes, mostly with capability to play high clarification content, are installed with vast quantities of pirated works or are configured to foster a user’s entrance to websites featuring unlawful content. This problem has been reported in China (including Hong Kong), Indonesia, Malaysia, Taiwan, Thailand, and Vietnam.
The Report calls for “more effective rapist and limit enforcement” to retreat these trends. Another “growing” problem is tawdry pharmaceuticals, possibly final drug product or active curative mixture (API); Brazil, China, India, Indonesia, Lebanon, Peru, and Russia are cited as countries where a former form of counterfeiting is a problem; from 10-40% of a drugs done in India are tawdry and paint “a critical hazard to studious health and safety.” China is cited as being a “major source” of tawdry APIs.
Another subsection of a Report is endangered with digital piracy, quite over a Internet, that is “a poignant courtesy in many U.S. trade partners.” The “increased accessibility of broadband Internet connectors around a universe . . . has [] done a Internet an intensely fit car for disseminating copyright-infringing products, replacing legitimate markets for rights holders,” according to a Report. “The U.S. Government’s 2013 Notorious Markets List includes examples of online marketplaces reportedly enchanting in commercial-scale IPR infringement, including sites hosted in or operated by parties located in Canada, China, a Netherlands, Russia, Sweden, Ukraine, and elsewhere,” according to this subsection of a Report.
Piracy is a “significant” concern, “using mobile telephones, tablets, peep drives, and other mobile technologies,” including some countries where “these inclination are pre-loaded with bootleg calm even before they are sold.” Specifically mentioned as an additional hazard is “the presentation of bandit servers, or ‘grey shards,’” unapproved servers that capacitate entrance to copyrighted element from “the cloud.” Also mentioned is a expansion of module that enables technological insurance measures to be circumvented, quite as practical to games. In this regard, a Report privately calls out SlySoft, “a association headquartered and handling in Antigua, that grown and sells a module called ‘Any DVD HD’ enabling a user to better a encryption record embedded in Blu-ray Discs that prevents unapproved facsimile and distribution,” handling notwithstanding an Antiguan law prohibiting “manufacture or import for sale or let any such circumvention device.” As a outcome of team-work between a Antiguan supervision and a “consortium of electronic manufacturers, module companies, and suit design studios that grown these technological insurance measures,” a owners (and operator) of SlySoft was fined $30,000 after an Apr 2014 trial, though either a Antiguan supervision shuts down a site now deemed bootleg underneath their law is during benefaction misleading according to a Report.
Somewhat surprisingly, a “system of online copyright insurance and coercion in Switzerland” is also remarkable as an area of “serious concern.”
The Report asserts that a U.S. “encourages trade partners to adopt suitable measures where indispensable to residence a unapproved camcording of suit cinema in theaters.” Losses of $1.1 billion are reported in India from such practices, and “[t]he effects of [such] control are not always singular to a marketplace in that unapproved recording occurs” due to chain over a Internet. Specific measures comprising a U.S. government’s “encouragement” opposite this form of robbery embody “establishing halt penalties opposite camcording; strengthening coercion opposite critical channels of robbery over a Internet, including with honour to scandalous markets; and formulating specialized, lerned coercion units and endeavour special initiatives opposite Internet piracy.” These new avenues for copyright transgression exist corresponding with comparison forms, such as CD and visual hoop piracy; supervision actions in Czech Republic, Poland, Romania, and Russia have “made progress” while China, India, Paraguay, and Vietnam are cited as countries still wanting to urge their efforts with courtesy to “physical” robbery of copyrighted materials. Finally, a Report contains a new subsection destined to copyright transgression in Caribbean countries (including Anguilla, Antigua and Barbuda, Barbados, Belize, a Cayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, Saint Maarten, St. Vincent, Trinidad and Tobago, a Turks and Caicos Islands, and a Grenadines).
As it has for a past few years, a Report contains a subsection on “Intellectual Property and Health Policy,” again privately mentioning a 2001 Doha Declaration on a TRIPS Agreement. The Report states that a Declaration “recognized a sobriety of a open health problems afflicting many building and least-developed countries, generally those ensuing from HIV/AIDS, tuberculosis, malaria, and other epidemics,” and that a U.S. “respects a trade partner’s right to strengthen open health and, in particular, to foster entrance to medicines for all, and supports a vicious purpose of a obvious complement in compelling a expansion and origination of new and innovative lifesaving medicines.” Accordingly, a Report states that a U.S. “respects a trade partners’ rights to extend mandatory licenses in a demeanour unchanging with a supplies of a TRIPS Agreement, and encourages a trade partners to cruise ways to residence their open health hurdles while progressing egghead skill systems that foster investment, research, and innovation.” The U.S. “strongly supports” a WTO General Council Decision on a Implementation of Paragraph 6 of a Doha Declaration on a TRIPS Agreement and Public Health. The Report, in a subsection relating to “pharmaceutical and medical device innovation” cites “the policies of several grown trade partners, including Finland, Germany, Greece, Hungary, Italy, Korea, New Zealand, Poland, Portugal, Romania, Spain, Turkey, and Taiwan, on issues associated to origination in a curative zone and other aspects of health caring products and services,” privately job out “serious” (with honour to New Zealand’s Pharmaceutical government agency) and “significant” (concerning Turkey’s “lack of integrity and a delayed gait of curative prolongation inspections”) concerns. The U.S. is “seeking to settle or continue dialogues with applicable trade partners to residence these and other concerns, and inspire a common bargain on questions associated to origination in a curative and medical device sectors,” privately per China and India in this regard.
The Report contains additional subsections including a examination of U.S. activities in a WTO to solve disputes with countries such as China and a EU over trade issues and a investiture of a Interagency Trade Enforcement Center by Executive Order, to “take a whole-of-the-government proceed to monitoring and enforcing Americans’ trade rights around a world.
Section II of a Report is a detailed, country-by-country contention for any nation on a Priority Watch List and a Watch List, relating to a activities (or miss thereof) of any nation that formula in chain of that nation on these lists.
As it has for a past several years (and opposite differently really opposite Administrations), a U.S. Trade Representative Report provides insights into both a concerns of U.S. IP rights holders and a Administration’s intentions to work with, cajole, coerce, or bluster other countries to boost insurance for IP rights of U.S. IP rights holders. The Report seems to return to progressing attempts, generally no some-more than partially successful, by a U.S. and other Western governments to exercise general trade treaties designed to boost IP rights protection. But by including subsections on a significance of IPR for a environment, and a disastrous effects of robbery in a curative and other areas, a Report seems reduction focused on small threats of coercion and some-more on building a tellurian accord that insurance of IPR is an critical member of universe mercantile swell for all.
For additional information per this and other associated topics, greatfully see:
• “U.S. Trade Representative Issues 2013 Special 301 Report,” May 30, 2013
• “U.S. Trade Representative Issues 2012 Special 301 Report,” May 1, 2012
• “U.S. Trade Representative Releases Special 301 Report on Global IPR,” May 4, 2011
• “U.S. Trade Representative Releases Special 301 Report on Global IPR,” May 19, 2010
• “New Administration, Same Result: U.S. Trade Representative’s Section 301 Report,” May 6, 2009
• “Congressmen Criticize U.S. Trade Representative over Special 301 Report,” Jul 1, 2008
• “U.S. Continues Efforts to Protect Patent Rights Abroad,” Apr 29, 2008