USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of Notorious Markets for Piracy and Counterfeiting

A top trade priority for the Administration is to use all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and provide adequate and effective protection and enforcement of U.S. intellectual property (IP) rights. Toward this end, a key objective of the Administration’s trade policy is ensuring that U.S. owners of IP have a full and fair opportunity to use and profit from their IP around the globe.

The Special 301 Report (Report) is the result of an annual review of the state of IP protection and enforcement in U.S. trading partners around the world…The Report identifies foreign trading partners where IP protection and enforcement has deteriorated or remained at inadequate levels and where U.S. persons who rely on IP protection have difficulty with fair and equitable market access. For example:

• USTR continues to place China on the Priority Watch List and, as before, Section 306 monitoring remains in effect. China’s placement on the Priority Watch List reflects the urgent need for fundamental structural changes to strengthen IP protection and  enforcement, including as to trade secret theft, online piracy and counterfeiting, the highvolume manufacture and export of counterfeit goods, and impediments to pharmaceutical innovation. Under Section 301 of the Trade Act of 1974, USTR has taken action to address a range of unfair and harmful conduct, including technology transfer requirements imposed as a condition to access the Chinese market. USTR also initiated dispute settlement proceedings at the World Trade Organization (WTO) to address discriminatory licensing practices. Structural impediments to administrative, civil, and criminal enforcement continue to undermine IP protections, as do certain information communications technology (ICT), IP-ownership, and research and development localization requirements.
• USTR identifies India on the Priority Watch List for lack of sufficient measurable improvements to its IP framework on long-standing and new challenges that have negatively affected U.S. right holders over the past year. Long-standing IP challenges facing U.S. businesses in India include those which make it difficult for innovators to receive and maintain patents in India, particularly for pharmaceuticals, insufficient enforcement actions, copyright policies that do not properly incentivize the creation and commercialization of content, and an outdated and insufficient trade secrets legal framework. In addition to these long-standing concerns, India also further restricted the transparency of information provided on state-issued pharmaceutical manufacturing licenses, expanded the application of patentability exceptions to reject pharmaceutical patents, and missed an opportunity to establish an effective system for protecting against the unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for certain agricultural chemical products.
• USTR identifies Indonesia on the Priority Watch List due to the reported lack of adequate and effective IP protection and enforcement. Indonesia’s patent law continues to raise serious concerns, including with respect to patentability criteria, local manufacturing and use requirements, and compulsory licensing.
• USTR identifies Saudi Arabia on the Priority Watch List for failing to address longstanding IP concerns and further deteriorating IP protection and enforcement within its borders. Specifically, concerns remain regarding the lack of IP protection for innovative pharmaceutical products, including the lack of adequate and effective protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval. Further, Saudi Arabia has not taken action against the rampant satellite and online piracy made available by illicit pirate service BeoutQ.
• The Report also highlights trading partners such as Chile that have not delivered on IP commitments made to the United States.

To view the official report, click here.