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USTR Releases Annual Special 301 Report on Intellectual Property Rights

Washington, D.C. – The Office of the United States Trade Representative (USTR) has released its annual “Special 301” Report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of intellectual property rights (IPR). 

“Made-in-America exports are an essential source of economic growth and well-paying, Middle Class jobs in the United States,” said U.S. Trade Representative Michael Froman. “American innovation and creativity are a cornerstone of our economic strength and competitiveness.  U.S. companies and workers generate many of the innovative breakthroughs that have saved and enriched lives in the United States and abroad. The content produced by America’s creative industries is enjoyed worldwide, and U.S. brands are among the most valued and trusted internationally.”

“Tens of millions of Americans owe their jobs to intellectual property-intensive industries.  Strong and balanced protection and enforcement of intellectual property are critical for promoting exports of U.S. innovative and creative goods and services, and sustaining those jobs here at home.  The Special 301 Report is an important tool – and a demonstration of this Administration’s resolve – to ensure that Americans can bring their inventions and creations to people all over the world without their work being infringed or misappropriated.”

Significant elements of the 2015 Special 301 Report include the following:

  • China remains on the Priority Watch List.  The Report draws attention to China’s wide-ranging intellectual property law reform effort and certain positive enforcement initiatives, but also to new and longstanding concerns about IPR protection and enforcement, including with respect to trade secret misappropriation and technology localization. Such new measures include conditioning market access on use of Chinese indigenous IPR, R&D being conducted in China, and the provision of source code to the Chinese Government.
     
  • The Report draws attention to the increased bilateral engagement in 2015 between the United States and India on IPR concerns, following the 2014 Out-of-Cycle Review of India on this issue.  India will remain on the Priority Watch List in 2015, but with the full expectation that the new channels for engagement created in the past year will bring about substantive and measurable improvements in India’s IPR regime for the benefit of a broad range of innovative and creative industries.  The United States has offered to work with India to achieve these goals.  We are not announcing another OCR at this time, but will monitor progress over the coming months, and are prepared to take further action, if necessary.
     
  • USTR also highlights serious and ongoing concerns with respect to the environment for IPR protection and enforcement in Turkey, Indonesia, Russia, Argentina and other markets. 
     
  • USTR announces that it will conduct Out-of-Cycle reviews to promote engagement and progress on IPR challenges identified in this year’s reviews of Honduras, Ecuador, Paraguay, Tajikistan, Turkmenistan, and Spain.

The report also highlights progress made by our trading partners to resolve and address IPR issues of concern to the United States:

  • Italy implemented new regulations in 2014 to combat copyright piracy over the Internet, including by providing notice-and-takedown procedures that incorporate due process safeguards and establish a mechanism for addressing large-scale piracy. 
     
  • The Philippines carried out administrative enforcement reforms that have resulted in streamlined procedures, enhanced inter-agency cooperation, and more enforcement action, including increased seizures of pirated and counterfeit goods.
     
  • Denmark established a unit to be housed under the Danish Patent and Trademark Office that will assist in enforcement efforts by serving those consumers and businesses that have allegedly been the victims of patent, design, and trademark infringement.
     
  • Paraguay and the Philippines have committed to a whole-of-government approach to IPR enforcement that has been critical to enhancing the effectiveness of IPR enforcement and resulted in positive reports from a number of affected stakeholder groups. 
     

BACKGROUND   

The “Special 301” Report is an annual review of the global state of IPR protection and enforcement.  USTR conducts this review pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act.

USTR reviewed seventy-two (72) trading partners for this year’s Special 301 Report, and placed thirty-seven (37) of them on the Priority Watch List or Watch List.  

In this year’s Report, trading partners on the Priority Watch List present the most significant concerns this year regarding insufficient IPR protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection.  Thirteen countries — Algeria, Argentina, Chile, China, Ecuador, India, Indonesia, Kuwait, Pakistan, Russia, Thailand, Ukraine, and Venezuela — are on the Priority Watch List.  These countries will be the subject of particularly intense bilateral engagement during the coming year.   

Twenty-four trading partners are on the Watch List, and also merit bilateral attention to address underlying IPR problems:  Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Dominican Republic, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Paraguay, Peru, Romania, Tajikistan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan, and Vietnam.   

USTR also announces that it will launch several Out-of-Cycle Reviews to enhance engagement with trading partners and encourage progress on IPR issues of concern.  USTR will conduct an OCR of Watch List countries Paraguay, Tajikistan, and Turkmenistan as well as of two countries not currently listed, Honduras and Spain.  Details appear in Section II of the Report.  USTR may conduct additional OCRs of other trading partners as circumstances warrant, such as in Ecuador, or as requested by the trading partner. 
 

PUBLIC ENGAGEMENT

USTR continued its enhanced approach to public engagement activities in this year’s Special 301 process.  USTR requested written submissions from the public through a notice published in the

Federal Register on December 29, 2014.  On February 24, 2015, USTR hosted a public hearing at which interested persons testified before the interagency Special 301 subcommittee about issues relevant to the review.  The hearing featured testimony from witnesses representing foreign governments, industry, and non-governmental organizations.  Continuing a practice initiated during the prior year, USTR recorded the hearing testimony, made it publicly available, and offered a post-hearing comment period during which hearing participants and interested parties could submit additional information in support of, or in response to, hearing testimony. 

The December 2014 notice in the Federal Register — and post-hearing comment period — drew submissions from 55 interested parties, including 21 trading partner governments.  The submissions that USTR received are available to the public online at www.regulations.gov, docket number USTR-2014-00425.  The public can access both the video and transcript of the hearing at www.ustr.gov.