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Administration Pledges Aggressive Efforts to Combat IPR-Related Trade Barriers

Monday, April 30, 2018
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative’s annual Special 301 report on the adequacy and effectiveness of U.S. trading partners’ intellectual property rights protection and enforcement lists 36 trading partners as meriting particular concern. This year’s report reiterates the Trump administration’s emphasis on using “all possible sources of leverage” to encourage other countries to “provide adequate and effective protection and enforcement of U.S. intellectual property rights.”

Priority Watch List. Trading partners on the PWL present the most significant concerns regarding insufficient IPR protection or enforcement or actions that otherwise limit market access for persons relying on IPR protection. Twelve countries – Algeria, Argentina, Canada, Chile, China, Colombia, India, Indonesia, Kuwait, Russia, Ukraine, and Venezuela – have been placed on the PWL and will be the subject of intense bilateral engagement during the coming year. 

Canada was moved up from the Watch List for “failing to make progress on overcoming important IP enforcement challenges,” including poor border enforcement, lack of customs authority to inspect or detain suspected counterfeit or pirated goods shipped through Canada, deficient copyright protection, and inadequate transparency and due process regarding the protection of geographical indications. Colombia was elevated from the Watch List for “its longstanding failure to make meaningful progress in fulfilling obligations under the United States-Colombia Trade Promotion Agreement, such as obligations to amend its copyright law.” 

Watch List. Twenty-four trading partners are on the WL and merit bilateral attention to address underlying IPR problems: Barbados, Bolivia, Brazil, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Peru, Romania, Saudi Arabia, Switzerland, Tajikistan, Thailand, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan, and Vietnam. 

Saudi Arabia is being added due to “concerns regarding recent deteriorations in IP protection for pharmaceutical products, in addition to outstanding concerns regarding IP enforcement and the continued use of unlicensed software by the government.” The UAE has been placed on the WL “in response to longstanding concerns about the sale and transshipment of counterfeit goods and the establishment of collecting management organizations, as well as recent policy changes that may not provide adequate and effective IP protection for pharmaceutical products.” Tajikistan was added after an out-of-cycle review because it “failed to address unlicensed software use by government agencies during the OCR.” Bulgaria was removed from the WL after taking steps to improve IPR enforcement and Thailand was moved down from the PWL in light of various improvements.

Out-of-Cycle Reviews. OCRs focus on identified challenges in specific markets. Successful resolu­tion of these issues can lead to a positive change in a trading partner’s Special 301 status outside of the typical timeframe for the annual review, while failure to address these concerns or further deterioration within the specified timeframe can lead to an adverse change in status.

In 2018 USTR will conduct OCRs of Colombia, focusing on commitment to the IP provisions of the U.S.-Colombia TPA and implementation of the National Development Plan; Kuwait, focusing on improving the copyright regime to meet international commitments; and Malaysia, focusing on the extent to which there is adequate and effective IPR protection and enforcement, including with respect to patents.

In 2017 USTR closed OCRs of (a) Thailand, after bilateral engagement resulted in resolving concerns across a range of issues, including enforcement, patents and pharmaceuticals, trademarks, and copyright; (b) Colombia, which dealt with the same issues that will be examined in 2018; (c) Kuwait, although implementing regulations for the 2016 copyright and related rights law fell short of addressing all outstanding issues; and (d) Tajikistan, which was reinstated to the WL this year after failing to successfully resolve the previously identified software issues during the period of the review.

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