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Schwab Announces Results of Chile IPR Review, Cites Deteriorating Performance

WASHINGTON - United States Trade Representative Susan C. Schwab today announced a determination to elevate Chile from "Watch List" to "Priority Watch List" status following a Special 301 Review that examined in detail the adequacy and effectiveness of intellectual property rights (IPR) protection in Chile.  This determination is the result of an "Out-of-Cycle Review" (OCR) announced in the April 2006 Special 301 Report. 

"Chile's importance as a U.S. trading partner continues to grow, due in no small part to our Free Trade Agreement," said Ambassador Schwab.  "As such, our expectations for Chile's respect of intellectual property rights are quite high.  This review reflects our concern that Chile is not protecting sufficiently intellectual property.  Chile has a tremendous interest in improving its IPR track record, and we look forward to working with Chile to bring that about." 

The OCR concluded, in part, that Chile remains unwilling to address the concerns of patent holders, who report that Chile has authorized the marketing of patent-infringing pharmaceutical products and has failed to provide an appropriate and effective mechanism through which patent holders may seek to prevent marketing in such cases.

The United States remains concerned, as well, by reports that Chile has relied inappropriately on undisclosed test and other data submitted in connection with the approval of innovative drug products in order to approve generic versions of these drugs.  In addition, Chile's commitment to the vigorous enforcement and prosecution of intellectual property theft of copyrighted goods appears to be diminishing significantly. 

The OCR revealed increased rates of pirated sound recordings, software and films, as well as an expansion of internet-based piracy.  While some Chilean government officials are attempting to address specific aspects of these problems, the political will and a comprehensive government strategy for reversing recent trends towards higher levels of infringement appear to be lacking.  The concerns highlighted in this OCR are further reinforced because Chile is overdue in enacting legislation to implement certain intellectual property-related obligations reflected in the U.S.-Chile Free Trade Agreement (FTA). 

The United States will continue to seek constructive engagement with Chile on the issues raised in this OCR.  

Background

Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994), under Special 301 provisions, USTR must identify those countries that deny adequate and effective protection for IPR or deny fair and equitable market access for persons that rely on intellectual property protection.  Countries that have the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products must be designated as "Priority Foreign Countries."

USTR has created a "Priority Watch List" and "Watch List" under the Special 301 provisions.   Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on intellectual property.  Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.