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USTR Announces Results of Special 301 Review of Notorious Markets

12/13/2012

Identifies Marketplaces that Facilitate Global Piracy and Counterfeiting

Washington, D.C. – United States Trade Representative Ron Kirk today announced the results of the Special 301 Out-of-Cycle Review of Notorious Markets. The review lists more than 30 Internet and physical markets that exemplify marketplaces that deal in infringing goods and services, facilitating and sustaining global piracy and counterfeiting. The results identify examples of marketplaces that have been the subject of enforcement actions connected with counterfeiting and piracy, or that may merit further investigation for possible intellectual property rights (IPR) infringements. The review also reflects the removal of eight previously listed markets due to law enforcement actions against those markets, or significant voluntary actions by market operators, aimed at addressing the problems identified. The Notorious Markets Review document can be read here.

“Piracy and counterfeiting, including online sales of pirated and counterfeit goods, is a problem that hurts the U.S. economy, harms some of this nation’s most creative and innovative entrepreneurs and companies and threatens jobs for significant numbers of middle-class American workers. We highlight the notorious markets that have a negative impact on legitimate businesses and industries of all sizes that rely on intellectual property to protect their goods and services,” said Ambassador Kirk. “I applaud the actions that some markets have taken to begin ridding their virtual and physical marketplaces of pirated and counterfeit goods, as well as enforcement actions taken by certain governments that have resulted in the shutdown of several other markets. It is through both voluntary and government actions that we will continue to improve the landscape for IPR owners and companies and their workers here at home that rely on IPR protection.”

The Notorious Markets Review identifies particularly infamous markets, and does not constitute an exhaustive list of all notorious markets around the world. Inclusion in the Notorious Markets List does not reflect a finding of a violation of law. Nor does it reflect the United States Government’s analysis of the general IPR protection and enforcement climate in the country concerned; such analysis is contained in the annual Special 301 Report issued at the end of April. However, the United States urges the responsible authorities to intensify efforts to combat piracy and counterfeiting in these and similar markets, and to use the information contained in the Notorious Markets Review to pursue legal actions where appropriate.

This year’s list also highlights positive developments since the issuance of the previous Notorious Markets Review in December 2011. For example, Chinese site Taobao, has worked with rights holders to significantly decrease the listing of infringing products for sale through its website, and has committed to continue working to streamline its complaint procedures to further reduce listings of counterfeit products. We encourage other Chinese online marketplaces to take similar actions to ensure the timely removal of listings for sales of pirated and counterfeit goods on their sites. Similarly, Chinese website Sogou has been removed from the current list based on reports that it has also made notable efforts to work with rights holders to address the availability of infringing content on its site. In addition, the Philippine Government has taken significant enforcement actions at the Quiapo Shopping District, which has reduced the number of counterfeit and pirated goods available for sale in this marketplace.

This past January, shortly after the release of the previous Notorious Markets Review, the U. S. Department of Justice filed criminal copyright charges against defendants associated with the website MegaUpload, the cyberlocker site that actively promoted the unauthorized distribution of protected content through subscriptions and reward schemes for frequent uploaders. As a result of these actions, several cyberlockers in the past year have changed their business models in ways that reduce or eliminate piracy; others, such as btjunkie, also included in last year’s list, have shut down their operations completely. In addition, the Mexican Government took action to shut down the operations of the previously-listed Bit Torrent Tracker Demonoid. Both Modchip.ca and Consolesource, which were listed for involvement in the marketing of circumvention devices, have also reportedly been shut down before Canada implements its recently enacted Copyright Modernization Act, which includes new provisions against trafficking in circumvention devices. As a result of these actions, these sites are not included in this year’s report.

Notwithstanding the progress made during the past year, there are several markets that continue to operate despite legal rulings or enforcement actions against them. In particular, the vKontakte website continues to operate, via its social media site, a music service that courts in Russia have found to be infringing. And in Ukraine, the website Ex.ua, which offers unauthorized downloading and streaming of various content, was shut down on January 31 by criminal law enforcement authorities, but was back online by February 2. Servers and evidence seized in the raid of Ex.ua’s offices were reportedly returned and the criminal case was reportedly closed in June with no further action. We urge the Governments of Russia and Ukraine to follow through on ensuring that notorious markets are not allowed to continue infringing operations.

BACKGROUND

USTR has identified notorious markets in the Special 301 Report since 2006. In 2010, USTR announced that it would begin to publish the Notorious Markets list separately from the Special 301 Report, in order to increase public awareness and guide related trade enforcement actions. USTR published the first stand-alone Notorious Markets list in February 2011, as an “Out-of-Cycle Review of Notorious Markets,” and the second such report in December 2011.

Today’s announcement concludes the process launched on August 14, 2012. The Special 301 Subcommittee received and reviewed written submissions from the public concerning potential examples of Internet and physical notorious markets. The Notorious Markets Review released today is the result of this effort. Public submissions may be viewed online at www.regulations.gov, Docket number USTR-2012-0011.