US Highlights China, India on IP Priority Watch List as USTR Also Mentions Amazon

China, India, Indonesia and Chile are among the top countries the U.S. is targeting for weak intellectual property protections, the Office of the U.S. Trade Representative said Wednesday in its annual special 301 report (see 1904250052). In a controversial move, the administration singled out Amazon. President Donald Trump and the company have been at loggerheads over some issues.

Ensuring U.S. IP owners have full and fair opportunity worldwide is a key administration objective, USTR said: The report is an attempt to expose foreign laws and policies that “fail to provide adequate and effective IP protection and enforcement” for Americans. USTR threatened Section 301 enforcement or trade agreement dispute resolution through bodies like the World Trade Organization.

The report included China for the 16th straight year on its priority watch list for IP violations. USTR cited China’s “system of pressuring and coercing technology transfer” and its need for fundamental structural change. Among issues listed in China were “trade secret theft, obstacles to protecting trademarks, online piracy and counterfeiting, the high-volume manufacturing and export of counterfeit goods, and impediments to pharmaceutical innovation.”

USTR initiated WTO dispute settlement proceedings to address “discriminatory licensing practices” in China. However, USTR noted the progress in signing the U.S.-China Economic and Trade Agreement in January, which requires structural and other changes.

In India, long-standing IP challenges make it difficult for American companies to receive, maintain and enforce patents, the report said. Copyright policies that “fail to incentivize creation and commercialization of content” and an “outdated and insufficient trade secrets legal framework” were among concerns.

Chile was targeted for not delivering on several IP commitments, including ratification of the 1991 Act of the International Union for the Protection of New Varieties of Plants Convention. The U.S. urged Chile to establish protections against the unlawful circumvention of technological protection measures.

Indonesia’s patent law remains a serious issue, the document said, citing challenges with patentability criteria and compulsory licensing. Counterfeiting and piracy continue to be issues in Indonesia, where IP enforcement is “weak,” the agency said.

China, India, Indonesia and Chile were among the 10 countries on the priority watch list, which also included Russia. “The overall IP situation in Russia remains extremely challenging,” the agency said, citing ineffective protections against online piracy and a lack of transparency for royalty collection by collective management organizations. Russia also is a “thriving market” for counterfeit goods sourced from China, USTR said, and there are concerns Russia isn’t implementing WTO commitments on protection against unfair commercial use.

Another 23 countries were included on the watch list, for a total of 33 on both lists. That’s down three from the 36 on both lists in the 2019 report. Costa Rica, Greece, Jamaica and Switzerland were dropped entirely now. Trinidad and Tobago was added to the watch list for lack of enforcement against unauthorized cable and satellite channel broadcasts, which the country committed to addressing when it was removed from the watch list in 2016. Kuwait was downgraded to the watch list.

USTR included Amazon’s foreign domains in its notorious markets report. The document listed concerns from rights holders about alleged high levels of counterfeit goods on amazon.ca in Canada, amazon.de in Germany, amazon.fr in France, amazon.in in India, and amazon.co.uk in the U.K. The Computer & Communications Industry Association called Amazon’s inclusion discouraging. “Comparing a U.S. business with industry-leading practices to rogue offshore operators undermines the legitimacy of the report,” said President Matt Schruers.

“We strongly disagree with the characterization of Amazon in this USTR report,” an Amazon spokeswoman said. “This purely political act is another example of the Administration using the U.S. government to advance a personal vendetta against Amazon.”

The notorious markets report rightfully emphasized the link between “piracy and malware, which can be linked to identity theft and other nefarious schemes,” Motion Picture Association CEO Charles Rivkin said. BSA|The Software Alliance praised USTR’s attention to unlicensed software, which BSA said has a market value around $50 billion. There’s an urgent need for increased attention to “innovation-related cross-border data restrictions, which disproportionately impact” heavy IP industries, like the U.S. software industry, it said.