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USTR Releases Annual Special 301 Report on Intellectual Property Rights

To support American jobs that depend on innovation and creativity, USTR offers to develop Action Plans with trading partners to address IPR issues of concern

Washington, D.C. – Today, the Office of the United States Trade Representative (USTR) released its annual Special 301 Report on the adequacy and effectiveness of U.S. trading partners’ protection of intellectual property rights (IPR). Fighting IPR theft in overseas markets is critical to the livelihoods of the estimated 18 million Americans who work in intellectual property-intensive industries. The Special 301 Report provides a means for the United States to promote the protection and enforcement of IPR. This year, for the first time, USTR has issued an open invitation to all trading partners listed in the report to cooperatively develop action plans to resolve IPR issues of concern.

“This year’s Special 301 Report comes with a call to action for our trading partners. We are ready to work intensively with you to stop intellectual property theft that threatens IP-related jobs in the United States and other countries,” said Ambassador Ron Kirk. “Today’s report is a springboard for ambitious and collaborative partnerships in the coming year to strengthen protection for the innovation and creativity that drive jobs and exports for the United States and our partners around the world.”

In the report, USTR announced that in 2011 it will conduct an out-of-cycle review of Italy to monitor progress on IPR protection and enforcement, in particular in the area of piracy over the Internet. Today’s report also recognizes important examples of progress made by several countries, including through the enactment of significant IPR legislation in Mexico, the Philippines, Russia, and Spain. However, no trading partners are being removed from the two main categories in the report, the Priority Watch List and the Watch List.

America’s two largest trading partners, Canada and China, remain on the Priority Watch List. The report notes the failure of Canadian efforts in 2010 to enact long-awaited copyright legislation and to strengthen border enforcement. It highlights ongoing concerns about the prevalence of piracy and counterfeiting in China, and China’s implementation of “indigenous innovation” and other industrial policies that discriminate against or otherwise disadvantage U.S. exports and U.S. investors. Russia remains on the Priority Watch List as well. While Russia has taken significant steps to improve IPR protection by enacting important legislation, the report urges Russia to take additional steps to address Internet piracy concerns and enforcement more generally.

A copy of the report can be found here.

BACKGROUND

USTR reviewed 77 trading partners for this year’s Special 301 Report, and placed 42 countries on the Priority Watch List, Watch List, or the Section 306 monitoring list.

Trading partners on the Priority Watch List present the most significant concerns regarding insufficient IPR protection or enforcement, or otherwise limited market access for persons relying on intellectual property protection. Twelve countries – China, Russia, Algeria, Argentina, Canada, Chile, India, Indonesia, Israel, Pakistan, Thailand, and Venezuela – are on the Priority Watch List. These countries will be the subject of particularly intense bilateral engagement during the coming year.

Twenty-nine trading partners are on the Watch List, also meriting bilateral attention to address underlying IPR problems: Belarus, Bolivia, Brazil, Brunei, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, Romania, Spain, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam.

Action Plans

The United States develops action plans and similar programs to address IPR issues in various contexts, including the Special 301 process. These plans and programs establish benchmarks, such as legislative, policy, or regulatory action by which to measure progress. Additionally, these plans can serve as tools to encourage our trading partners to make improvements to their IPR regimes, thereby increasing the likelihood that they may be removed from the Special 301 Watch or Priority Watch lists.

The Administration’s 2010 Joint Strategic Plan on IPR Enforcement called for USTR, in coordination with the Office of the United States Intellectual Property Enforcement Coordinator (IPEC), to initiate an interagency process focused on improving the effectiveness and implementation of Special 301 action plans. As a result, USTR is announcing that it invites any country appearing on the Special 301 Priority Watch List or Watch List to negotiate a mutually agreed action plan designed to lead to that country’s removal from the relevant list. Agreement on such a plan will not by itself change a trading partner’s status. However, in the past, successful completion of action plans has led to the removal of trading partners such as Saudi Arabia, Taiwan, and many others from Special 301 lists.

Public Engagement

USTR continued its enhanced approach to public engagement activities in this year’s Special 301 process. USTR requested written submissions from the public through a notice published in the Federal Register on December 30, 2010. This year’s review yielded 49 comments from interested parties. The submissions received by USTR were made available to the public online at www.regulations.gov, docket number USTR-2010-0037. Further, on March 2, 2011, USTR conducted a public hearing that permitted interested persons to testify before the interagency Special 301 subcommittee about issues relevant to the review. The hearing included testimony from seventeen witnesses, who included representatives of foreign governments, industry, and non-governmental organizations. A transcript of the hearing is available at www.ustr.gov.