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USTR “Special 301” Report Highlights Intellectual Property Rights Abuses

Posted May 03, 2017

China once again ranked at the top of the U.S. government’s annual list of countries with the worst records of protecting copyrighted material and other intellectual property.

Although the U.S. Trade Representative’s “Special 301” report that was released last week did not add or remove any countries from the “priority watch list” or the “watch list,” the 74-page document employed noticeably more pointed language that White House officials said clearly reflects President Trump’s stamp and demonstrates the “resolve of this administration to call out foreign countries and expose the laws, policies and practices that fail to provide adequate and effective IP protection and enforcement.”

The executive summary of the report states it is a priority of the Trump administration “to use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property rights.”

“Toward this end, a key objective for the Administration’s trade policy will be ensuring that U.S. owners of IP have a full and fair opportunity to use and profit from their IP around the globe,” the report says, adding that it will “aggressively defend Americans from harmful IP-related trade barriers.”

Despite an easing of tensions following the recent Mar-a-Lago summit between President Trump and Chinese President Xi Jinping, the report was unsparing in its criticisms of China, which remained at the forefront of the U.S. government’s “priority watch list.”

“USTR continues to place China on the priority watch list because long-standing and new IP concerns strongly merit attention,” the report said. “China is home to widespread infringing activity, including trade secret theft, rampant online piracy and counterfeiting and high levels of physical pirated and counterfeit exports to markets around the world.”

While acknowledging the judicial reform efforts China has made over the last year, the report notes that “the substantive content and results of those efforts are mixed” and that despite having provided formal comments and engaged closely with China on a wide range of measures “major U.S. concerns have gone unaddressed.”

“Serious challenges in China continue to confront U.S. intellectual property right holders with respect to adequate and effective protection of IP, as well as fair and equitable market access for U.S. persons that rely upon IP protection,” the report said. “China must enact new measures and policies that provide stronger and more effective protection for IP; allow market access for IP-intensive products, services, and technologies; and enhance the effectiveness of civil enforcement in Chinese courts.”

India and Indonesia were also included on the “priority watch list,” along with Algeria, Argentina, Chile, Kuwait, Russia, Thailand, Ukraine and Venezuela. Like China, many of those countries have been on the list for years.  The USTR provided a litany of reasons for keeping India on the priority watch list, including the difficulty that pharmaceutical companies have in receiving and maintaining patents. It also complained about the “positions that India supports in multilateral forums on IP issues, [which] continue to generate skepticism about whether India is serious about pursuing pro-innovation creativity growth policies.”

Twenty-three countries were placed on a lower-level watch list: Those were Barbados, Bolivia, Brazil, Bulgaria, Canada*, Colombia*, Costa Rica*, Dominican Republic*, Ecuador, Egypt, Greece, Guatemala*, Jamaica, Lebanon, Mexico*, Pakistan, Peru*, Romania, Switzerland, Turkey, Turkmenistan, Uzbekistan and Vietnam. The asterisks indicate countries the U.S. has free trade agreements with.