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E-Commerce Platforms See Scrutiny in USTR Notorious Markets Report

Friday, May 01, 2020
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative has released its 2019 report on notorious markets, which identifies 38 online markets and 34 physical markets around the world that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting. USTR notes that this list does not reflect findings of legal violations or the U.S. government’s analysis of the general IPR protection and enforcement climate in the country concerned.

According to USTR, this year’s report has an expanded discussion of the challenges related to counterfeit and pirated goods on e-commerce platforms and third-party marketplaces. USTR is considering seeking more information regarding e-commerce platforms, including those based in the U.S., in future reports. In the meantime, USTR states that e-commerce platforms “need to take additional actions to combat trafficking in counterfeit and pirated goods and reduce the availability of such goods on their platforms.”

More broadly, the report finds that there have been some positive developments regarding notorious markets over the past year. Some online markets (including in Ukraine, Uruguay, Indonesia, Thailand, and Brazil) have been the subject of successful enforcement efforts. Several countries have significantly stepped up enforcement with respect to physical marketplaces as well, including Argentina, Brazil, Romania, the United Arab Emirates, and Vietnam.

On the other hand, a report from the Organization for Economic Cooperation and Development based on data from 2016 found that trade in counterfeit and pirated physical goods has risen steadily in the last few years and now stands at 3.3 percent of global trade ($509 billion). Some industries are significantly more affected than others, including footwear (22 percent of global trade), clothing (15 percent), leather goods (13 percent), and electrical equipment (12 percent). The OECD report identified corruption, poor IPR enforcement, free-trade zones, China’s role as a top producer of counterfeit and pirated goods, and the use of post or courier services to send small shipments as key factors behind this growth.

For more information on IPR-related trade issues, please contact customs and trade attorney Lee Sandler at (305) 894-1000.

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