USTR Keeps China, India on Priority Watch List for IP Violations

China and India will remain among the 13 countries on the U.S. Trade Representative’s priority watch list this year for copyright and other IP rights violations, the USTR office said Thursday in its annual special 301 report. China and India have improved their IP policies, but other new policies have become a cause for concern, said Deputy U.S. Trade Representative Robert Holleyman on a conference call with reporters. Other nations on the priority watch list are Algeria, Argentina, Chile, Ecuador, Indonesia, Kuwait, Pakistan, Russia, Thailand, Ukraine and Venezuela. The report placed another 24 countries on the USTR’s lower-tier watch list: Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, the Dominican Republic, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Paraguay, Peru, Romania, Tajikistan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan and Vietnam. The 2014 special 301 report included 10 countries on the priority watch list and 27 on the regular watch list (see 1405020082).

China’s government issued planning documents last year and earlier this year that committed to protecting and enforcing IP rights, allowing industry and entrepreneurs a bigger voice in policy development and allowing market forces to play a bigger role in research and development, the special 301 report said. China is continuing to overhaul its IP laws, the report said. These positive developments were tempered by two other recent anti-IP rights measures that impose restrictive requirements on information and communications technology products and services, though neither measure is currently in effect, the report said. The measures are “only the latest example of measures that China has used over time to condition market access or eligibility for preferences on use of Chinese indigenous” IP and research, Holleyman told reporters. “We felt it was critical to call this out” along with other reports from U.S. stakeholders about encountering other serious obstacles to effective IP protections in China, he said.

The administration of India Prime Minister Narendra Modi showed it’s “engaged” on IP issues and is re-examining its IP policies, particularly as a result of U.S.-India bilateral engagement, the special 301 report said. India established a domestic IP rights experts group, issued favorable domestic IP policy statements and continues to engage with the U.S. on IP issues via the U.S.-India Trade Policy Forum’s IP Rights Working Group, the report said. But the U.S. is still waiting for India’s positive engagement to “translate into substantive and measurable action,” it said. “We’ve been clear that we expect the channels of engagement created in the past year to bring about substantive and measurable improvements” in India’s IP rights regime, Holleyman said. Some stakeholders have continued to highlight IP challenges in India that require further government action, including strengthening domestic IP rights enforcement, the report said. The USTR did an out of cycle review of India in 2014 amid the start of the U.S.-India bilateral engagement. The USTR doesn’t plan to do another review now, “but will monitor progress over the coming months, and are prepared to take further action, if necessary,” Holleyman said.

The USTR elevated Ecuador onto the priority watch list from the regular watch list. The change in Ecuador’s status reflects the government’s 2014 repeal of its criminal IP violations laws, which “invites transnational organized crime groups that engage in copyright piracy and trademark counterfeiting to view Ecuador as a safe haven,” the report said. The USTR will move Ecuador back to the regular watch list after an out-of-cycle review if Ecuador’s government reinstates the laws by Dec. 30, the report said. The USTR said it also plans out-of-cycle reviews on Honduras, Paraguay, Tajikistan, Turkmenistan and Spain based on current IP issues.

The USTR elevated Kuwait to the priority watch list in November after an out-of-cycle review after Kuwait’s National Assembly failed to introduce legislation that would institute copyright laws consistent with international standards. Kuwait failed to resume “effective” enforcement of copyright and trademark infringement, the report said.

MPAA CEO Chris Dodd praised the report, saying in a statement that it’s “an important tool for promoting economic growth and our global competitiveness.” The report “remains one of our nation’s key trade tools to promote adequate and effective protection for U.S. intellectual property and fair and equitable market access for the U.S. businesses that depend upon it,” said International Intellectual Property Alliance Counsel Steven Metalitz in a news release. “As online and mobile networks grow, so do the opportunities -- but also the challenges -- for the American creative community. These challenges are found not only in major emerging markets, such as China, India and Brazil, but also elsewhere, such as Switzerland.”