WATCH LIST
AZERBAIJAN
Azerbaijan needs to take
several remaining steps in order to fulfill its intellectual property rights
commitments under the 1995 U.S.-Azerbaijan Trade Agreement. Specifically,
Azerbaijan is not providing any protection to U.S. and other foreign sound
recordings, and Azerbaijan does not clearly provide retroactive protection for
works or sound recordings under its copyright law. In addition, there is weak
enforcement of intellectual property rights in Azerbaijan. While criminal
penalties for intellectual property rights violations have been adopted, there
are still major shortcomings in Azerbaijan's legal regime. For instance, the
provisions under the Azerbaijani Criminal Code are minimal and contain a high
threshold for the imposition of criminal penalties and they do not provide ex
officio authority. Moreover, they are limited to copyright and patent
violations, completely excluding neighboring rights violations. The Customs Code
does not appear to provide the proper authority for Customs to seize material at
the border as required by the TRIPS Agreement. Lastly, it is not clear that
Azerbaijan has civil ex parte search provisions as required by
TRIPS.
BELARUS
Belarus needs to take
several remaining steps in order to fulfill its intellectual property rights
commitments under the 1993 U.S.-Belarus Trade Agreement. Enforcement of
intellectual property rights in Belarus also is very weak and sales of pirated
material are extremely high. In fact, while Belarus has amended its Criminal
Code to adopt deterrent penalties for intellectual property rights violations,
the Criminal Code still does not contain the proper authority for officials to
initiate criminal copyright cases. Although the government of Belarus recently
announced that the Convention for the Protection of Producers of Phonograms
Against Unauthorized Duplication of their Phonograms (Geneva Phonograms
Convention) has now entered into force in Belarus, there still is no retroactive
protection for works or sound recordings under Belarus' copyright law. Moreover,
the Interior Ministry has made very discouraging statements that it does not
intend to take action to end retail piracy of optical media. Belarus also has
become a transshipment point for pirate materials throughout the region. The
United States, however, is gratified to see that Belarus has made some progress
this year, in particular, shutting down the large Armita optical media plant. It
remains important that the criminal investigation involving Armita proceed to a
successful conclusion, and that positive enforcement actions be taken to prevent
the relocation of other optical media facilities to Belarus. The United States
believes that Belarus' application for WTO membership offers an important
opportunity to address these legal and enforcement deficiencies.
BOLIVIA
The Bolivian Government has taken
several positive administrative steps with respect to enforcement of
intellectual property rights, such as the creation of a special prosecutor for
intellectual property rights. However, enforcement continues to be sporadic and
ineffective in reining in rampant piracy, especially that of CDs, videos, and
software. Also, the government has not taken significant steps toward legalizing
the use of its own software. The Government of Bolivia is long overdue in
enacting intellectual property legislation to implement its TRIPS obligations.
In fact, efforts to amend its copyright law have languished. Significantly,
Bolivia also does not adequately protect against the improper use of undisclosed
proprietary data that is submitted for marketing approval, as required under
Article 39.3 of the TRIPS Agreement. We urge Bolivia to take strong actions to
protect intellectual property rights, including by issuing a data protection
decree. We will monitor Bolivia's actions in this respect, and will review any
progress in the Fall.
CANADA
Canada continues to make
progress in improving its IPR regime. In December 2002, the Government of Canada
(GOC) revised its Copyright Act (Bill C-11) so that internet retransmission is,
in effect, excluded from its compulsory licensing regime -- that is, unless
licensed by the Canadian Radio-television & Telecommunications Commission
(the "CRTC") and the CRTC has determined not to so license internet
retransmissions. This follows amendments made to Canada's patent law in 2001 to
provide 20 year patents that were filed before October 1, 1989. Despite these
positive developments, the problems that originally caused Canada to be placed
on the Watch List in 1995 remain largely unresolved. For example, although
Canada continues to make some limited progress on resolving the outstanding
issue of national treatment of U.S. artists in the distribution of proceeds from
Canada's private copying levy and its "neighboring rights" regime, it still does
not provide full national treatment. In addition, Canada does not provide
effective data exclusivity protections, and systematic inadequacies in Canadian
administrative and judicial procedures allow entry of infringing generic
versions of patented medicines into the marketplace. Further, this is the third
consecutive year that Canada's border measures have been the target of severe
criticism by IP owners, who consider Canada's border enforcement measures to be
inconsistent with its TRIPS obligations.
CHILE
We look forward to seeing
Chile implement the provisions of the recently negotiated intellectual property
chapter of the U.S. Chile Free Trade Agreement, which provides high levels of
protection of appropriate for the digital age, including non-discriminatory
treatment for U.S. software, music, text, and motion pictures. Protections for
U.S. patents, trademarks and undisclosed information exceed past trade
agreements (e.g. NAFTA and the U.S.-Jordan FTA), and obligate Chile to make its
IP laws and enforcement practices conform to the most advanced standards. This
is a good agreement for both the United States and Chile. The protection of
intellectual property is important for economic development because it promotes
the creation of knowledge industries and provides incentives for increased
investment. The agreement includes important new protections for Chilean
writers, singers, and software developers, specifically ensuring that they will
continue to reap the rewards of their creativity in the digital realm. The
Agreement also will make Chile an attractive location for clinical trials for
pharmaceuticals.
However, to date, Chile's
IPR laws are not yet fully TRIPS-consistent. Shortcomings with respect to
enforcement remain and we are concerned with Chile's large backlog of pending
patent applications. In addition, the United States was very disappointed with
the registration of several pharmaceutical products that appear to infringe
validly issued Chilean patents. We expect these issues to be resolved through
Chile's implementation of the U.S.-Chile FTA and look forward to following
Chile's progress with respect to meeting its commitments under this and the
TRIPS agreement. Upon full implementation of the U.S. – Chile Free Trade
Agreement, we would expect to re-evaluate Chile's status in the Special 301
review.
COLOMBIA
In 2002, Colombia took an
important step by passing Decree 2085 to implement fully Article 39.3 of the
TRIPS Agreement. The U.S. Government is monitoring implementation of this decree
closely in the context of Colombia's ATPA eligibility. Piracy levels in Colombia
continue to be high. The home video market is 90 percent pirate, and the U.S.
industry is working hard to keep cable piracy from escalating. Pirated sound
recordings can be found easily in flea markets and on streets in major cities,
and the growth of illegitimate CD-R replication continues to undermine what is
left of the legitimate music market. Illegal use of business software in small
and medium-sized businesses is widespread, with rates higher in areas outside
the major cities. Pirating of video game software on all platforms and illegal
photocopying of books are widespread. However, Colombia's progress on the data
protection issue is exemplary. Therefore, we are moving Colombia from the
Priority Watch List to the Watch List and will monitor further progress in the
copyright area.
COSTA RICA
At the beginning of 2002,
the Costa Rican Government (GOCR) announced steps to improve intellectual
property protection through a government strategy for improving the enforcement
of intellectual property rights it began in 2001. The United States recognized
progress under this strategy by moving Costa Rica from the Priority Watch List
to the Watch List in 2002. However, there remain deficiencies in Costa Rican
intellectual property law that have not been addressed. In addition, significant
barriers to effective enforcement remain. Two amendments to improve penalties
and enforcement infrastructures in Costa Rica's intellectual property laws are
pending and an executive decree on data exclusivity has yet to be signed.
Additionally, significant delays in judicial proceedings and a lack of official
investigators, public prosecutors and criminal and civil judges specializing in
intellectual property continue to hamper effective enforcement. We look to the
GOCR to enact necessary IP legislation and decrees and to improve enforcement in
the near term.
CROATIA
Croatia's otherwise strong
protection and enforcement of intellectual property rights – particularly
concerning copyright and trademarks – is undermined by inadequate protections in
the patent area and delayed judicial decision-making. The absence of
confidential data protection; the lack of linkage between the national patent
authority and the central health regulatory authority; and the failure of
Croatian courts to rule on intellectual property cases in a timely manner
prevent rights holders from effectively protecting their intellectual property
against infringement. Long delays in granting of health registration further
erode the benefits of intellectual property protection. We look to the Croatian
Government to ratify and implement the 1998 bilateral Memorandum of
Understanding Concerning Intellectual Property Rights in the near term, and to
bring provisions such as those on data protection fully into force. In addition,
we encourage Croatia to maintain criminal copyright enforcement.
DOMINICAN REPUBLIC
Levels of copyright piracy
in the Dominican Republic remain high, over 60 percent in almost all copyright
sectors. The Government of the Dominican Republic (GODR) has taken some
commendable steps in 2002, however, to improve copyright protection and
enforcement. Enforcement of the 2000 copyright law remains critical to continued
success. During 2002, television piracy worsened. Recently, the GODR has taken
important and encouraging steps where there had been no previous action against
violators of broadcast piracy. The GODR initiated inspections of two television
stations and submitted evidence of piracy to the Attorney General for
prosecution, and initiated action against a third station. It is imperative that
the Dominican Republic sustain effective enforcement against broadcast
piracy.
Under the auspices of the
United States-Dominican Republic Trade and Investment Council (TIC), the GODR
has demonstrated renewed commitment to addressing U.S. concerns. Between October
2002 and March 2003 meetings of the TIC, the GODR appointed an intellectual
property rights committee to complete a review of the patent law to bring it
into compliance with TRIPS. The changes to the patent law recommended by the
committee now are reflected in an executive decree. We look to the Dominican
Government to implement a decree that is fully consistent with international
standards in the near term. In 2002, ONDA, the Dominican Copyright Office,
continued its aggressive campaign of inspections, raids and seizures against
pirates, but requires further GODR support and resources to sustain this
campaign.
ECUADOR
In 2002, there was a
lessening of intellectual property protection in Ecuador, with a decrease in
enforcement efforts. The Ecuadorian Institute for Intellectual Property (IEPI)
canceled a patent for a major U.S. pharmaceutical product. Copycat manufacturers
succeeded in obtaining sanitary registrations for medicines protected by patent.
Industry concerns about a poorly worded provision in the Education Law (which
has been interpreted as guaranteeing free software to educational institutions)
were not addressed fully. For all of these reasons, we are placing Ecuador back
on the Watch List this year. In addition, we will monitor Ecuador's progress on
the protection of intellectual property, especially with respect to the data
protection issue, and will review progress on these issues in the Fall.
EGYPT
Egypt made significant
progress in strengthening its IPR protections through improvements in its
domestic legal and enforcement regimes in 2002. The major development in 2002
was Egypt's passage of a new comprehensive IPR law which represents an
improvement in all major facets of Egypt's IPR regime, although apparent
TRIPS-inconsistencies are found throughout. Egypt did meet certain key TRIPS
requirements, including providing data exclusivity (Article 39.3) and exclusive
marketing rights, and enacting a patent mailbox. The Egyptian Government
continues to advance its effort to ensure the use of legitimate software in all
government offices. In addition, Egypt's parliament ratified the WIPO Patent
Cooperation Treaty, a step that the Egyptian Government intends to follow up
with changes in its domestic regulations necessary to come into compliance with
the treaty. Egypt also made some progress in combating piracy of records and
music, books, and business software applications.
In order to maintain forward
movement in IPR protection in the coming year, it is essential that Egypt
address the TRIPS-inconsistencies in its IPR law, particularly in the areas of
copyrights, trademarks, and patents, as well as take steps to further strengthen
protection of confidential test data. Egypt has acknowledged that its IPR law is
not fully TRIPS-consistent, and the U.S. Government welcomes Egypt's commitment
to address deficiencies in its IPR law, in large part through implementing
regulations. Improved enforcement must also be a priority. Much work remains to
be done in countering photocopy and reprint piracy, retail piracy, corporate
end-user software piracy, piracy of console-based and PC- based video game
platforms and increasing efforts to end pirate distribution on the basis of
false licenses. Continuing improvements in IPR protection will be a key factor
in advancing Egypt's efforts to further expand its trade and investment ties
with the United States.
GUATEMALA
Although intellectual
property rights enforcement has improved since the creation of the Special
Prosecutor=s Office for intellectual property crimes last year, Guatemala
continues to experience high piracy levels. In November 2002, the Guatemalan
Congress effectively suspended the processing of pharmaceutical and chemical
patents through 2004 and eliminated the protection of test data provided in
support of applications to introduce these products in the local market. The
executive branch of the Government of Guatemala worked to submit a new bill to
the Guatemalan Congress to reinitiate immediately the processing of
pharmaceutical and chemical patents. This legislation, which recently passed,
also will provide a term of protection of five years of data protection for
pharmaceuticals and ten years of data protection for agrochemicals for data
provided in support of the application to bring these products to market.
Other problems in Guatemala
include substantially decreased criminal penalties as a result of the amendments
to the copyright law passed in 2001; lack of a statutory damages provision for
civil copyright infringement; and ineffective legal remedies in civil actions.
We are encouraged that Guatemala recently deposited its instruments of accession
to the WIPO Copyright Treaty and the WIPO Performances and Phonogram
Treaty.
HUNGARY
Hungary has undertaken some
positive steps towards more complete implementation of its international
obligations by putting into effect a ministerial decree providing for data
exclusivity protection on January 1, 2003. However, unfortunately, the decree
provides retroactive protection for products that received first marketing
authorization in the EU or Hungary on or after April 12, 2001, rather than
January 1, 2000, as required by TRIPS. We are concerned by this, as well as by
the fact that the data protection term is linked to the existence of a patent.
We urge Hungary to resolve these issues in an expeditious manner. At the same
time, we recognize that Hungary has made important strides in modernizing its
legal regime for copyright over the past several years, including extensive
revisions to its criminal code. Enforcement, however, remains problematic and
piracy remains high considering Hungary's well-developed legal
system.
ISRAEL
In 2002 Israel maintained
the momentum it began to build in 2001 in the enforcement of copyrights and
trademarks, accordingly, we are moving Israel from the Priority Watch List to
the Watch List. Israel has increased its budgetary, educational, police and
judicial resources devoted to these enforcement efforts yielding concrete
results in terms of raids, prosecutions and convictions, and contributing to a
drop in the piracy level with regard to U.S. rightholders. Israel took an
additional important step in protecting intellectual property in 2002 with its
passage of the Amendment to the Copyright Ordinance, which increased criminal
penalties for piracy in general and strengthened the ability of Israeli
authorities and courts to prosecute and punish copyright crimes.
Despite these important
developments, several key issues still need to be addressed. It is essential
that progress continue to be made in copyright and trademark enforcement, such
as providing the Israeli police, prosecutors and courts with sufficient
resources to fully meet enforcement requirements. While the United States
welcomes Israel's passage of the Amendment to the Copyright Ordinance, it is
concerned that the new law excludes corporate end-user piracy from criminal
liability, a step that may lead to weaker protection for business software. A
2001 opinion by the Ministry of Justice concluding that payment for the
broadcasting and public performance of U.S. sound recordings is no longer
necessary remains a concern, and the U.S. Government continues to seek
clarification regarding the bearing of this opinion on Israel's bilateral
obligations to the United States. And, most significantly, although Israel has
been obligated since January 1, 2000 to provide data exclusivity, it has failed
to do so. This policy places it at odds with other OECD-level economies and many
of its neighbors that have met their TRIPS Article 39.3 obligations. The U.S.
government urges the Israeli Government and the Knesset to enact quickly
TRIPS-consistent legislation that will provide a reasonable period of
non-reliance on confidential data similar to that granted in OECD and many
neighboring countries. On the outskirts of the recent OECD meeting in Paris,
Ambassador Zoellick and Vice Prime Minister and Minister of Industry, Trade and
Labor, Ehud Olmert agreed that the two countries would engage in an intensive
dialogue to attempt to resolve all outstanding intellectual property
issues.
ITALY
Despite continued
implementation of its recent Anti-Piracy Law, and increased enforcement actions
in 2002, Italy continues to possess one of the highest piracy rates in Western
Europe – affecting all copyright-based sectors. Widespread piracy of business
applications software remains a particular U.S. concern. Notwithstanding new
government procedures to exempt business software that were enacted on January
25,2003, when the Italian Government changed the implementing regulations to the
2000 Copyright Law to permit exemptions from the SIAE sticker for business
software, Italy continues to enforce a problematic program requiring copyright
owners to pay for and apply a government-approved sticker on genuine copyrighted
works. In addition, U.S. pharmaceutical manufacturers assert that Italian
government actions in 2002 may unfairly curtail patent protection for drugs by
changing the criteria relating to patent term restoration.
JAMAICA
Jamaica's trademark and
copyright regimes are generally consistent with international standards and
enforcement efforts over the past year have been commendable. However, lack of
parliamentary action to bring Jamaica's patent, industrial design, and plant
variety laws into conformity with its international obligations remains the
primary motivation for Jamaica remaining on the Watch List. The United States
urges Jamaica to complete the process of enacting the necessary legislation and
intends to engage the Government of Jamaica over the coming months to assess the
status of that effort.
KAZAKHSTAN
Kazakhstan needs to take
several remaining steps in order to fulfill its intellectual property rights
commitments under the 1992 U.S.-Kazakhstan Trade Agreement. In particular,
Kazakhstan does not clearly provide full retroactive protection for works or
sound recordings under its Copyright Law. In addition, there is weak enforcement
of intellectual property rights in Kazakhstan, and as a result, piracy and
counterfeiting rates are growing problems. Criminal penalties for intellectual
property rights violations were adopted in 2001, but the United States remains
concerned about the effectiveness of these Criminal Code provisions in deterring
piracy and counterfeiting, due to the high burden of proof. It remains unclear
whether new criminal penalties for IPR violations will be effectively enforced
and deter piracy.
KOREA
The United States continues
to have serious concerns regarding adequate protection and enforcement of
intellectual property in Korea. In 2002, in reliance on Korea fulfilling
specific pledges the Korean Government made to the U.S. Government to improve
IPR protection and enforcement, Korea was moved from the Priority Watch List to
the Watch List. While Korea has taken some steps to fulfill its spring 2002
commitments, such as drafting legislation to provide the Standing Inspection
Team with police powers, these steps fall far short of what Korea pledged to do.
In addition, since the last Special 301 report, new and significant IPR issues
emerged that have required strenuous efforts by the U.S. Government to resolve:
one related to alleged infringement of a U.S. industry's IP in the
creation/promulgation of a new telecommunications standard ("WIPI") and the
other concerning pirates' ability to obtain rights to register and distribute
U.S. films in the Korean market. The U.S. Government appreciates the efforts of
the Korean government in resolving the intellectual property issues regarding
the WIPI standard and will carefully monitor the situation to ensure the
agreement with US industry is being implemented fully. Regarding film
registration, while the U.S. Government recognizes Korea's cooperation in
devising and implementing an interim resolution of this problem, a permanent
solution has not yet been implemented. This issue is of serious concern to U.S.
rights holders who already have lost millions of dollars in revenues as a result
of this lack of adequate IP protection.
The U.S. Government also notes
that Korea has not taken sufficient new steps since last year to address U.S.
concerns, outlined in the 2002 Special 301 Report, related to the protection of
temporary copies, reciprocity provisions regarding database protection, ex parte
relief and the lack of full retroactive protection for pre-existing copyrighted
works.
As a result of incomplete
follow through on key April 2002 commitments, the emergence of serious new IP
issues, and the failure by Korea to make progress on other issues of priority
raises concerns about adequate and effective protection for intellectual
property rights in Korea. As a result, USTR has decided to conduct an
out-of-cycle review in the fall.
The United States' decision
on whether Korea should remain on the Watch List or be moved to Priority Watch
List will be based on Korea's taking action in all of the following areas. As it
agreed in 2002, the Government of Korea should: 1) Take all actions necessary to
ensure that the Standing Inspection Team (SIT) is granted police powers at the
earliest opportunity; 2) Draft and submit legislation to the National Assembly
that establishes the exclusive right of transmission for sound recordings,
including both the full right of making available and the full right of
communication to the public, and seek its enactment by the end of 2003; 3)
Provide additional, new data on the ROKG's enforcement efforts that is
sufficient to more fully evaluate the full range of its enforcement activities,
including the imposition of deterrent penalties, and sufficient to allow right
holders to have the opportunity to take action against infringers who are not
convicted. In addition, in order to resolve the film distribution issues, the
Government of Korea should: 4) Draft and submit legislation to the National
Assembly to grant the Korea Media Review Board (KMRB) all authority necessary to
stop film piracy. This legislation and/or the implementing regulations must: a)
clearly provide the KMRB the authority to reject false applications; b) clearly
provide the KMRB the authority to cancel existing ratings which were approved on
the basis of a false application; and c) not place undue burdens on legitimate
rights holders to prove their rightful ownership; 5) Fully and faithfully
implement its agreement on the "WIPI" intellectual property issue.
KUWAIT
The United States supports
the steps Kuwait has taken to improve enforcement and protection of intellectual
property rights over the past year. However, copyright violations continue to
pose a serious problem, and the piracy rate in Kuwait remains the highest in the
region. The United States looks to Kuwait to intensify the depth and breadth of
its efforts. Recognizing that Kuwait stands at a critical juncture in its fight
against piracy, we will continue to work with the Kuwait to meet its
international obligations and commitments. Steps that are needed include working
with the National Assembly to pass long-promised amendments to Kuwait's 1999
copyright law, increasing the effectiveness of enforcement procedures,
strengthening an existing interagency process, and improving judicial capacity
to penalize present offenders and deter future ones.
LATVIA
While there were some
positive developments in 2002, with some major raids on sellers of pirated
optical media and while Latvia has improved its intellectual property rights
regime in order to meet the obligations under the TRIPS Agreement, there remains
concern over its weak enforcement regime. Large volumes of pirated products,
including pirate optical media products are transshipped through Latvia from
Russia and Ukraine. Latvia's record on combating transshipment of pirate goods
has been mixed. The police, customs officials, prosecutors and judicial
authorities have not placed sufficient emphasis on combating piracy. Industry
and government efforts are underway to educate these authorities and improve
enforcement.
LITHUANIA
The most persistent problem
in Lithuania regarding copyright protection is a lack of adequate and effective
enforcement, which undermines legislative progress that Lithuania has made in
recent years. Lithuania appears to remain a major transshipment country for
pirated optical media products in the East and consumers in the West. An
important development in the last year was the Lithuania's enactment of
regulations to provide protection for confidential test data submitted by
pharmaceutical firms.
MALAYSIA
The Malaysian government
intensified its efforts to eliminate the use, sale and production of pirated
products over the past year. It effectively has used the Optical Disk Act of
2000 (enacted in September 2001), which established a licensing and regulatory
framework for manufacturing copyrighted works, and has increased the number of
enforcement officers to implement this Act. These enforcement officers have
energetically raided vendors, users and manufacturers of pirated goods and
sealed licensed optical disc factories for violating the Optical Disk Act. These
stepped up enforcement efforts have led some unlicensed manufacturers to cease
operations in Malaysia. Despite this noteworthy progress, optical media piracy,
including of music, entertainment, and business software remains widespread and
the products of sophisticated Malaysian pirates are marketed worldwide. In
addition, U.S. industry has raised concerns about trademark counterfeiting of
such products as office machines, apparel, and other goods. Prosecution is a
weak link in the enforcement chain, and the judicial process remains slow. We
urge the Malaysian government to address these concerns, to step up the
prosecution of IPR cases and follow through with plans to provide deterrent
sentencing for IPR violators.
MEXICO
This is the first time that
Mexico has been placed on the Watch List since 1999. Despite some sings of
progress, the United States remains concerned that several TRIPS and NAFTA
issues, including lax enforcement against copyright piracy and trademark
counterfeiting, remain serious problems. In addition, a new matter that arose
over the last year that generated concerns by U.S. pharmaceutical companies: the
lack of coordination between Mexican health officials and the Mexican Institute
of Industrial Property (IMPI) with regard to the granting of marketing approval
for their products. The Ministry of Health have allowed Mexican companies to
rely on the confidential test data submitted by U.S. companies without
authorization from the U.S. companies. Therefore the Government of Mexico (GOM)
has improperly granted marketing approval to Mexican companies copies of U.S.
products. More importantly, the Ministry of Health's actions have undermined
validly granted patents that were issued by IMPI. We are aware of GOM efforts to
remedy this situation and will await the outcome of these efforts. If those
efforts are not successful, we will analyze the situation to determine what
recourse may be available under international agreements, including NAFTA. We
also remain concerned that many firms complain about the difficulty they face in
enforcing their trademark rights in Mexico. We note that the complaints seem
almost uniformly to involve issues of process or administration, resulting, for
example, some companies failing to secure their rights in well-known marks in
Mexico for as many as 14 years. We hope that this situation will be properly
resolved in the near term and that Mexico will provide a systematic and
effective means for right holders to protect their well-known marks.
In addition, the United
States has longstanding concerns that raids rarely lead to prosecutions and
convictions. While we are encouraged that in the last few months Mexico has been
developing legislation to classify piracy as an organized crime, and has created
a special IPR prosecutor within the Mexican Department of Justice (Procuraduria
General de la Republica - PGR), we are still concerned by the lack of progress
in making effective use of such provisions. The copyright industries estimate
losses of $731 million in 2002. We are also concerned about recent copyright
amendments which were proposed which did not appear to meet international
obligations, nor address implementation of the WIPO Internet Treaties. We urge
the Mexican Government to: ensure that marketing approvals are not granted to
infringing copies of patented products; expand its anti-piracy program to all
major cities; improve investigations and raids against pirates at both levels of
commercial distribution and street piracy; and encourage prosecutors to bring
cases swiftly and press for deterrent sentences. We will monitor Mexico's
progress on these issues in the coming months.
PAKISTAN
In 2002, Pakistan was the
fourth largest source of counterfeit and piratical goods seized by the U.S.
Customs Service as they were entering the United States. The vast majority of
these goods were either apparel items with counterfeit trademarks or optical
media products. Moreover, production of pirated optical media has grown
substantially in 2002. With respect to patents, Pakistan's 2002 ordinance
undermines improvements that the Government of Pakistan made to its patent law
in 2000 to comply with its TRIPS obligations. In addition, there is no
protection for confidential test data. The United States calls on the Government
of Pakistan to improve its civil and criminal enforcement of intellectual
property rights, including judicial and prosecutorial measures to address
counterfeiting and piracy, expeditiously close pirate optical media production
facilities and enact an optical media licensing regime to impede the growth of
pirate enterprises and deter future potential pirates. We also call on the
government of Pakistan to reinstate patent protection, and implement the
protection of undisclosed test data in the near term.
PERU
The Government of Peru
issued a software legalization decree and recently took some steps to destroy
pirated and counterfeit products. However, piracy rates for all copyright
industries remained high, in particular for sound recordings, where, according
to industry, piracy has devastated the legitimate market. Of concern
specifically is the fact that few prosecutions and deterrent sentences are
issued. In the patent area, Peru recently rescinded second-use patent protection
for pharmaceuticals in the face of Andean Community pressure. In addition, Peru
is failing to protect confidential proprietary test data that is submitted for
marketing approval of pharmaceutical and agricultural chemical products. This is
a growing, and glaring problem and U.S. industry reported that it has caused
significant commercial damage. The industry is particularly concerned that
infringing copies take market share away while rights holders are forced to
expend resources and time seeking redress in local courts. We urge Peru to take
strong actions to protect intellectual property rights, including by issuing a
data protection decree. We will monitor Peru's actions in this respect, and will
review any progress in the Fall.
ROMANIA
Ongoing piracy problems
overshadow the real progress Romania has made in developing its intellectual
property regime. Although Romania increased raids and seizures of infringing
materials in 2002, poor border enforcement, the low priority level given to
piracy by regional and local authorities, prosecutors and courts, and the lack
of resources dedicated to the issue, all combine to make intellectual property
protection a continuing challenge in Romania. We urge the Romanian government to
make enforcement against piracy a priority and set goals for tough anti-piracy
sanctions; encourage the police to increase the number of anti-piracy raids;
encourage the prosecutors to actively pursue more cases; provide a clear basis
for civil ex parte searches; and improve border enforcement by providing customs
officials with ex officio authority to make inspections and seizures.
SAUDI ARABIA
Saudi Arabia has made great
strides in fighting copyright piracy and trademark counterfeiting over the past
year. Patent protection also received a boost when the recently established
judicial Patent Committee, issued its first decision, found in favor of the
patent holder against an infringer. Saudi Arabia is also working to revise its
intellectual property laws, issuing amendments to the trademark law last August
and working to issue new copyright and patent legislation. However, the United
States remains concerned about continued high losses experienced by U.S.
copyright and trademark-based industries. The lack of deterrent penalties and
lack of transparency in the enforcement, prosecutorial, and judicial processes
severely undermine the protection of intellectual property rights in Saudi
Arabia. We look to Saudi Arabia to continue its enforcement efforts; ensure that
the judicial system reinforces these actions with serious and consistent
sentencing, including deterrent fines and penalties; and to improve transparency
in the enforcement, prosecutorial, and judicial processes.
SLOVAK REPUBLIC
The Slovak Republic was
added to the Watch List in 2001 because it lacks protection for confidential
pharmaceutical test data submitted to obtain marketing approval. There is no
evidence that the situation has improved. The United States remains concerned
about the lack of this important protection, which is a TRIPS requirement. In
the area of copyright piracy, home CD-burning is on the rise and pirate CDs
continue to be available on the public market in Eastern Slovakia.
TAJIKISTAN
Tajikistan has yet to
fulfill all of its intellectual property rights commitments under the 1993
U.S.-Tajikistan Trade Agreement. Specifically, Tajikistan is not yet a party to
the Geneva Phonograms Convention, nor does it provide any protection to U.S. and
other foreign sound recordings, or retroactive protection for works or sound
recordings under its Copyright Law. Criminal penalties for intellectual property
rights violations have not yet been adopted as required by the bilateral trade
agreement. In addition, Tajikistan also does not provide ex officio authority to
commence criminal cases. We call on Tajikistan to make improvements and
enforcement of its existing laws an immediate priority.
THAILAND
A public education campaign,
and a recent coordination of its IPR agencies provide some hope for the coming
year with respect to the protection of intellectual property in Thailand. It
passed a Trade Secrets law, which it is preparing to implement. The Royal Thai
Government organized the 13 agencies responsible for IPR issues to develop a
more coordinated campaign against piracy, which began in early April 2003.
However, we are concerned with the explosion of copyright piracy within its
borders. U.S. industry continues to raise concerns about the overall environment
for production, sale, and export of a wide range of infringing products and the
impunity accorded well-connected figures involved in infringement. Optical media
piracy, including business and entertainment software, and increasing production
and export of pirate CDs remains a particularly acute problem. Signal
theft/cable piracy continues to be widespread. The United States urges Thailand
to continue to strengthen its IPR regime and will provide Thailand with specific
recommendations on judicial, legislative/regulatory, and enforcement issues. Key
among these will be swift enactment of a strong optical media bill in the near
term, which will help ensure the effectiveness of Thailand's stepped-up
enforcement efforts concerning piracy counterfeiting.
TURKEY
Although there has been some
positive movement concerning protection of copyrights in Turkey, the situation
regarding data exclusivity shows little sign of improvement. Turkey still has
not adopted any administrative or legal mechanism to protect proprietary
commercial data and lags far behind other EU aspirant countries in its
protection of commercially valuable data for pharmaceuticals. With respect to
trademarks, U.S. companies complain that Turkey has become a source of
significant counterfeit production for the domestic market and export to Western
Europe. On the copyright front, the judiciary's failure to treat piracy as a
serious criminal matter and continued procedural hurdles in enforcing copyright
owners' rights make for a mixed record overall. Although the Ministry of Culture
has taken some positive steps to thwart copyright infringement regarding DVDs
and other optical media products, serious problems still remain. In order to
facilitate adequate protection of copyrighted materials, Turkey's judiciary
needs to hand down deterrent penalties for intellectual property infringement,
and customs needs to make greater efforts to tighten border
controls.
TURKMENISTAN
Turkmenistan needs to take
several remaining steps in order to fulfill its intellectual property rights
commitments under the 1993 U.S.-Turkmenistan Trade Agreement. Specifically,
Turkmenistan is not yet a party to the Berne Convention for the Protection of
Literary and Artistics Works (Berne Convention) or the Geneva Phonograms
Convention. Turkmenistan is not providing any protection to U.S. and other
foreign sound recordings, nor does it clearly provide retroactive protection for
works or sound recordings under its Copyright Law. In addition, criminal
penalties for intellectual property rights violations have yet to be adopted as
required by the U.S.-Turkmenistan Trade Agreement. Furthermore, the Customs Code
does not provide the proper authority to seize material at the border, as is
necessary to conduct effective border enforcement.
URUGUAY
In 2002 Uruguay amended its
65-year old copyright law. The new amendments entered into effect in January
2003 and represent an improvement over the prior 1937 Law and contain many
provisions that upgrade the prior Uruguayan copyright scheme. In recent years,
however, the major obstacle to copyright owners in Uruguay has been lack of
effective enforcement against widespread piracy. Enforcement at the borders
needs to be improved significantly, especially given the growth of optical media
piracy throughout the Mercosur region and Uruguay's role in the transshipment of
pirate and counterfeit goods into other countries in Latin America. While we are
pleased with progress on copyright protection, we remain concerned about the
inadequacies of Uruguay's patent law. We will continue to discuss intellectual
property issues in the context of the U.S. - Uruguay Joint Commission on Trade
and Investment. In addition, we urge Uruguay to ratify the two WIPO Internet
Treaties.
UZBEKISTAN
Uzbekistan needs to take
numerous remaining steps in order to fulfill its intellectual property
commitments under the 1994 U.S.-Uzbekistan Trade Agreement. Specifically,
Uzbekistan is not yet a member of the Berne Convention or the Geneva Phonograms
Convention; is not providing any protection or rights to U.S. and other foreign
sound recordings; and does not clearly provide protection for pre-existing works
or sound recordings under its copyright law. In addition, criminal penalties for
IPR violations have yet to be adopted as required by the bilateral agreement.
Furthermore, the Customs Code does not appear to provide the proper authority to
seize material at the border, as is necessary to conduct effective border
enforcement, we are encouraged that a new draft customs law is due for
consideration in Uzbekistan's parliament on August 28, 2003. We urge the
Government of Uzbekistan to enact this legislation expeditiously.
VENEZUELA
In 2002, Venezuela's
commitment to the protection of intellectual property rights appeared to be
decreasing. Venezuela began issuing approval for drugs by relying on
confidential test data of bio-equivalents that were already on the market, and
reversed course on the issuance of second use patents to U.S. interests and
revoking several which were already issued. Piracy and counterfeiting were
increasingly problematic, and deterrence and prosecution levels remain low. We
urge the Government of Venezuela to take strong actions to protect intellectual
property rights, including by issuing a data protection decree. We will monitor
Venezuela's actions in this respect, and will review any progress in the Fall.
VIETNAM
Enforcement of intellectual
property in Vietnam remains weak, and violations are rampant. While Vietnam has
increased the number of administrative and law enforcement actions against IPR
violations over the past year, effective enforcement remains the exception
rather than the norm. Market access barriers, especially with regard to
"cultural products," continue to impede the availability of legitimate product,
further complicating efforts to combat piracy. In most cities, according to
industry estimates, up to 100 percent of the music CDs, VCDs, and DVDs on sale
are pirated. Trademark violations also are prevalent, with all types of clothing
and other items carrying unlicensed versions of famous trademarks available
throughout major cities. In spite of this continuing bleak portrait, progress is
being made to implement the major IPR provisions of the U.S. - Vietnam Bilateral
Trade Agreement (BTA), which entered into force on December 10, 2001. As part of
the BTA, Vietnam committed to make its IPR regime, including enforcement,
TRIPS-consistent by December 10, 2003. In 2002 and early 2003 Vietnam improved
its IPR legal and enforcement structures, including implementing new
regulations; mandating increased inspections and raids; making further progress
on acceding to several WIPO conventions; and establishing penalties for
violating rules for the protection of plant species. The United States
encourages Vietnam to build upon its strong public commitment to IPR protection
by effectively implementing and enforcing its new laws and regulations to reduce
the pervasive piracy and counterfeiting that continue to exist.