USTR Maintains 2016 Special 301 IP Infringement Watch Lists' Designees for 2017

The Office of the U.S. Trade Representative maintained the 11 countries included on its 2016 mid-tier priority watch list for copyright and other IP rights violations and 23 countries on that year’s lower-tier watch list (see 1604270049) in the same rankings for USTR’s 2017 Special 301 report on the global status of IP rights enforcement. On the 2017 priority watch list: China and India, which perennially appear on that list because of ongoing IP rights enforcement problems. The office again didn't include any countries on its top-tier priority foreign country list.

“In virtually all countries identified in this Report, IP enforcement is lacking,” USTR reported: Some “do not provide adequate or effective border enforcement against counterfeit and pirated goods; in addition, many listed countries’ customs officials lack authority to take ex officio action to seize and destroy such goods at the border or to take such action for goods in-transit.” China and several other listed countries “have not addressed the continuing and emerging challenges of copyright piracy,” and others “do not have in place effective policies and procedures to ensure their own government agencies do not use unauthorized software,” USTR said.

Others on the 2017 priority watch list: Algeria, Argentina, Chile, Indonesia, Kuwait, Russia, Thailand, Ukraine and Venezuela. On the watch list: Barbados, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, the Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Peru, Romania, Switzerland, Turkey, Turkmenistan, Uzbekistan and Vietnam.

USTR said China remained on the priority watch list “because longstanding and new IP concerns strongly merit attention.” That country remains a haven for “widespread infringing activity, including trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports to markets around the globe,” USTR said. “China imposes requirements that U.S. firms develop their IP in China or transfer their IP to Chinese entities as a condition to accessing the Chinese market.”

India remains on the priority watch list because of a “lack of sufficient measurable improvements to its IP framework on longstanding and new challenges that have negatively affected U.S. right holders over the past year,” USTR said. It said hurdles include barriers that “make it difficult for innovators to receive and maintain patents in India,” and “copyright policies that do not properly incentivize the creation and commercialization of content, and an outdated and insufficient trade secrets legal framework.”

Russia's IP rights enforcement landscape “remains extremely challenging” despite some positive developments, USTR said. “Lack of enforcement of intellectual property crimes is a persistent problem, with the overall number of raids, criminal charges, and convictions continuing to decline,” USTR said. “Burdensome procedural requirements hinder right holders’ ability to bring civil actions.” Inadequate protections against online piracy remain “a significant problem," the office said.

USTR plans to do off-cycle reviews for Colombia, Kuwait and Tajikistan to evaluate progress on IP rights. The Colombia review is an extension of the OCR that USTR began last year to evaluate how the country's implementation of its pro-IP national development plan is progressing and will assess Colombia's commitment to the U.S.-Colombia Trade Promotion Agreement. The Kuwait review will focus on improving the country’s “copyright regime to meet international standards by fall 2017,” USTR said. The Tajikistan review, begun in 2015, focuses on software licensing rules.

USTR repeated the concerns it raised in its December Special 301 out-of-cycle review on IP infringement (see 1612210068) about the increasing importance of stream ripping as an IP infringement issue, saying it “presents unique enforcement challenges for right holders in countries where copyright laws have not been able to adapt or keep pace with these innovations in piracy.” It’s concerned about the proliferation of improved illicit camcording technology that makes it “easy for a surreptitious recording in a movie theater to result in a clean digital copy of a movie with perfect audio that can be quickly distributed online.” The issue “is magnified by the fact that movies may be released in different markets at different times,” USTR said. U.S.-based copyright stakeholders urged USTR in February to focus on stream-ripping in the Special 301 report (see 1702090071).

IP officials lauded the USTR in statements. MPAA CEO Chris Dodd said the report shows “creators still face serious challenges protecting and enforcing their intellectual property rights in foreign markets.” The report also “reflects” President Donald Trump’s “commitment to intellectual property and our nation’s global competitiveness,” Dodd said. U.S. Chamber of Commerce Vice President-Global Intellectual Property Center Mark Elliot said “IP enforcement is not a concession that countries make to one another; rather, it is an investment in economic development and growth." Others reacting favorably: BSA | The Software Alliance, Entertainment Software Association and International Intellectual Property Alliance.