WATCH LIST
AZERBAIJAN
Azerbaijan has yet to fully
implement the 1995 U.S.-Azerbaijan Trade Agreement and address deficiencies in
its IPR laws. For example, copyright law in Azerbaijan does not explicitly
provide for the protection of pre-existing works or sounds recordings. The
Criminal Code and Customs Code do not appear to provide for ex officio authority
to commence criminal copyright cases and suspend the release of suspected
infringing material at the border, and there is no explicit provision for civil
ex parte search procedures. As a result of these inadequacies, IPR enforcement
in Azerbaijan remains weak and ineffective. Furthermore, while Azerbaijani law
does provide criminal penalties for IPR violations, U.S. copyright industries
report that there have been no convictions for copyright infringement and that
damage awards are difficult to obtain. We look to Azerbaijan to meet its
obligations under the 1995 U.S.-Azerbaijan Trade Agreement and to improve its
enforcement efforts by providing for ex officio raids and seizures as well as
civil ex parte searches.
BELARUS
Belarus must take several
steps to fulfill its intellectual property commitments under the 1993
U.S.-Belarus Trade Agreement and to address other deficiencies in its IPR
regime. With respect to its copyright laws, Belarus has not provided appropriate
protection for pre-existing works and sound recordings. In addition, it appears
that further amendments are needed to bring Belarusian copyright law into
compliance with the WIPO Copyright Treaty and the WIPO Performances and
Phonograms Treaty. Enforcement of intellectual property laws in Belarus also
remains weak and ineffective. Piracy levels remain high and the potential for
increased piracy remains a concern due to the migration of optical media
production facilities from neighboring countries. While Belarus has amended its
Criminal Code to provide for deterrent penalties for IPR violations, there are
still no provisions authorizing ex officio raids and seizures. Furthermore,
Belarus' Civil Code does not provide for ex parte searches. We are also
concerned that the Armita optical media plant case has not progressed beyond the
initiation of a criminal investigation and that no criminal penalties or
deterrent sentences have resulted. We encourage Belarus to aggressively enforce
its IPR laws and to take actions to deter future illegal operations. In
addition, we urge Belarus to fulfill its obligations under the 1993 Bilateral
Trade Agreement and will continue to monitor its progress.
BELIZE
This is the first time
Belize has been placed on the Watch List in the past fifteen years. While IPR
legislation in Belize is generally in line with international standards, the
Government of Belize has made only minimal efforts at enforcement. This has led
to the availability of counterfeit goods across many sectors, especially in the
pharmaceutical and tobacco sectors. Furthermore, there has been insufficient
cooperation between rights holders and government entities and lackluster
responses to concerns raised by such rights holders. Another concern is the lack
of enforcement of IPR in the Corozal Commercial Free Zone, which has encouraged
infringement and related activities, including criminal activities. We urge
Belize to improve enforcement efforts by promoting increased cooperation in
counterfeiting investigations and implementing enforcement actions in the
Corozal Commercial Free Zone.
BOLIVIA Bolivia's existing legislation for IPR
protection is deficient. Bolivia has failed to provide for ex parte civil search
orders. In addition, damages are inadequate, enforcement efforts have been
sporadic and largely ineffective, and border enforcement remains weak. While the
1992 Copyright Law recognizes copyright infringement as a public offense and the
new Bolivian Criminal Procedures Code began to provide for the criminal
prosecution of IPR violations, enforcement by Bolivian Courts has been
disappointing. Unfortunately, no progress has been made on amending the
copyright law to bring it up to international standards. Furthermore, it appears
that the Bolivian government agencies use unlicensed software. Piracy rates for
videos, sound recordings, and software remain among the highest in Latin
America, according to industry sources. Despite these serious deficiencies in
enforcement, the Mesa Administration has publicly committed itself to
transparency and has demonstrated at multiple levels a desire to work with the
United States on institutionalization, combating corruption, and increasing the
efficiency of the Bolivian Government. We welcome this commitment and urge the
Bolivian Government to continue in its efforts to improve
enforcement.
BULGARIA
Bulgaria is being placed on
the Watch List for the first time in five years following its inclusion on the
Watch List and Priority Watch List from 1996-1999. After a dramatic decline in
domestic production and export of pirated optical disc media in the late 1990's,
there has been a steady resurgence of piracy, mainly in the sale of pirated
optical disc media, in Bulgaria over the past few years. Pirated optical discs,
mass imported finished discs, and illegally burned CD-Rs are prevalent in the
domestic market. Poor enforcement, including ineffective prosecutions, minimal
judicial sentences, shortcomings in current and draft legislation, and lax
border measures have contributed to this resurgence. Further amendments to close
loopholes are still needed to fix the pending optical disc legislation. In
addition, production and smuggling of counterfeiting of U.S. distilled spirits
has grown at an alarming rate. Large public amusement centers use images of
copyrighted cartoon characters. The Government of Bulgaria should take the
necessary administrative actions to stop optical disc piracy and the
counterfeiting of spirits and other goods. We commend Bulgaria for providing
protection for confidential test data in its new drug law and for its commitment
to have government ministries purchase and use only licensed business software.
However, we remain concerned over the growing rate of copyright piracy and
spirits counterfeiting and will continue to monitor Bulgaria's progress on
effectively combating these illegal activities.
CANADA
Canada has again been placed
on the Special 301 Watch List. After making significant progress in improving
its IPR regime in 2001 and 2002, Canada made little headway in addressing
long-standing intellectual property issues related to copyright and patent
reform such as ratification of the WIPO Internet treaties, and implementation of
legislation on patenting of higher life forms. Progress has stalled on resolving
the outstanding issue of national treatment of U.S. artists in the distribution
of proceeds from Canada's private copying levy and its "neighboring rights"
regime. Systemic inadequacies in Canadian administrative and judicial procedures
continue to allow the early and often infringing entry of generic versions of
patented medicines into the marketplace. Enforcement against IP infringement
improved through a concerted government and industry effort to address radio
signal theft, but these renewed efforts did not carry over into other areas of
counterfeiting and piracy. In fact, a recent Canadian court decision has found
peer-to-peer file sharing to be legal under the Canadian copyright law, a
position that underscores the need for Canada to join nearly all other developed
economies in implementation of the WIPO Internet treaties. Canada's border
measures continue to be a serious concern for IP owners, who consider Canada's
border enforcement measures to be inconsistent with its TRIPS obligations. The
United States urges Canada to take effective measures to strengthen border
enforcement, including the enactment of legislation that would allow Canada's
customs officials to conduct ex officio searches of incoming and outgoing
products suspected to be pirate or counterfeit.
CHILE
The U.S.-Chile Free Trade
Agreement (FTA) entered into force on January 1, 2004. The intellectual property
chapter of the FTA provides high levels of protection appropriate for the
digital age, including non-discriminatory treatment for U.S. software, music,
text, and motion pictures. Protections for U.S. patents, trademarks, and
undisclosed information obligate Chile to conform its IP laws and enforcement
practices to advanced standards. The FTA includes important protections for
Chilean writers, singers, and software developers, specifically ensuring that
they will continue to reap the rewards of their creativity in the digital realm.
In late 2003, two sets of amendments were made to the copyright law to implement
TRIPS and the FTA. However, some substantive IPR deficiencies remain, and
enforcement continues to be irregular. Copyright piracy is still quite high and
indeed has increased slightly in recent years, as digital piracy becomes more
prevalent. In addition, the United States was very disappointed with the
registration of several pharmaceutical products that appear to infringe validly
issued Chilean patents. We expect these issues to be resolved through Chile's
implementation of the FTA and look forward to following Chile's progress in
meeting its commitments. Upon full implementation of the U.S.-Chile Free Trade
Agreement, we would expect to re-evaluate Chile's Special 301 status.
COLOMBIA
During 2003, the Government
of Colombia continued to demonstrate a commitment to strengthen IPR protection
including passing a decree to provide data protection for agricultural
chemicals, and increasing enforcement actions. However, high levels of piracy
and lack of successful prosecutions for IPR infringement remain a problem. In
addition, new IP protections such as Decree 2085, which protects confidential
test data for pharmaceutical products remain subject to legal challenge, and
enforcement needs to be more effective. Piracy levels in Colombia amount to
three-quarters of the market for recorded music and motion pictures, and half of
the market for business software; the publishing industry continues to suffer
from piracy, especially photocopying piracy. Piracy of music CDs is on the
increase, threatening to erode legitimate markets altogether, mostly due to
local, cottage-shop CD-R duplication. The recent growth of optical disc piracy
also threatens the new, legitimate DVD market. Efforts to combat piracy through
raids and other enforcement measures are hindered by a judicial system that
fails to actively prosecute cases or issue deterrent penalties. Enforcement of
trademark legislation in Colombia is showing some signs of progress, but
contraband and counterfeiting are widespread and need to be stemmed by the
Government of Colombia. The United States urges Colombia to ensure that its
criminal, administrative, civil and border enforcement procedures meet its
bilateral and multilateral intellectual property enforcement obligations and are
effectively implemented. We look forward to working with Colombia in
strengthening IPR protection and enforcement through the upcoming U.S.--Andean
FTA negotiations. U.S. FTAs are modern, cutting-edge agreements that contain
far-reaching IP provisions and enforcement mechanisms.
COSTA RICA
In January 2004, Costa Rica
joined the Central American Free Trade Agreement, a step that will considerably
upgrade the level of protection in Costa Rica's intellectual property regime.
However, Costa Rica still faces IPR enforcement problems and, as such, shall
remain on the Watch List. While the United States notes Costa Rica's efforts to
ensure that local legislation conforms with the TRIPS Agreement, Costa Rica
still needs to improve its criminal and civil systems of intellectual property
enforcement, including establishing a specialized intellectual property
prosecutor and by increasing resources to bolster enforcement efforts in the
Ministry of Public Safety's Intellectual Property office. Furthermore, the
Government of Costa Rica must make significant modifications and clarifications
in the area of data protection as the CAFTA commitments come into effect. Also,
the Government of Costa Rica must improve protection of new plant varieties and
provide for stronger penalties for infringement. We encourage the Government of
Costa Rica to take action in 2004 to improve the shortcomings in its criminal
and civil systems of intellectual property enforcement by assigning priority and
resources to these areas and to continue its work in ensuring that its local
legislation conforms with CAFTA obligations.
CROATIA
In February 2004, the
Croatian Government ratified the 1998 U.S.-Croatia MOU Concerning Intellectual
Property Rights. Croatia currently is drafting implementing regulations that
will bring the MOU into force. While the ratification of the MOU is a positive
step in improving IPR protection in Croatia, problems still persist. Croatia
remains on the Watch List due to concerns with its patent regime, specifically
its failure to protect confidential data submitted for marketing authorization
as required by TRIPS, lack of coordination between the patent and health
authorities to prevent patent infringement by the grant of marketing approval
for copycat pharmaceuticals, and failure to provide expeditious and timely
judicial remedies to parties seeking to stop infringing activities. Furthermore,
companies seeking to register pharmaceutical products with the Ministry of
Health encounter a lengthy registration period. We will continue to monitor
Croatia's progress in fulfilling its MOU obligations in the near term, including
its prompt implementation of new regulations for data protection. We look to
Croatia to provide adequate data protection, establish linkage for
pharmaceutical products and to improve the registration process for
pharmaceuticals, including by reducing the lengthy registration
period.
DOMINICAN REPUBLIC
In March 2004, the Dominican
Republic concluded an FTA with the United States that will require the Dominican
Republic to upgrade considerably the level of intellectual property protection
in the Dominican Republic. However, concerns still remain regarding the
protection and enforcement of intellectual property, particularly with respect
to copyright piracy and patent protection. As such, the Dominican Republic shall
remain on the Watch List. We remain concerned by the levels of copyright piracy
in the Dominican Republic. While the Telecommunications Authority (Indotel) and
the Copyright Office (ONDA) have taken some positive steps to enforce
intellectual property, such actions have failed to deter infringements. A key
problem has been the delays in obtaining judicial remedies, particularly
criminal remedies, against violators. In addition, U.S. concerns regarding the
patent provisions of the Industrial Property Law and the subsequent Presidential
decrees remain. These concerns include, but are not limited to, issues regarding
the issuance of compulsory licenses, subject matter eligibility for patents, and
data exclusivity. We encourage the Government of the Dominican Republic to take
measures to address these concerns as soon as possible. Furthermore, we look
forward to the increased reporting and improved enforcement from the Government
of the Dominican Republic to effectively address broadcast piracy and deter
other copyright infringements, and its efforts to ensure an expeditious
resolution of pending judicial cases. Finally, we urge the Dominican Republic to
be vigilant in submitting legislation, enhancing enforcement, providing
training, and making other necessary preparations to meet its FTA
obligations.
ECUADOR
Ecuador has shown little
progress in improving IPR protection over the last year, and although it has a
generally adequate IPR law, enforcement of the law remains a significant
problem. Lack of effective protection for innovative pharmaceutical products is
a serious concern. Ecuador does not provide protection of confidential test
data, and the number of copy products granted marketing approval by the health
authority continues to increase, due to the lack of any linkage system between
the health and patent agencies. The United States urges the Government of
Ecuador to protect confidential data from unfair commercial use and to
facilitate an effective linkage system between its health and patent agencies.
Enforcement of copyrights also remains a significant problem, especially with
respect to sound recordings, computer software, and motion pictures, as does
enforcement of trademark rights. As a result, there continues to be an active
local trade in pirated audio and video recordings, computer software, and
counterfeit brand name apparel. Music piracy is rampant in the streets of key
cities, yet the local authorities appear to have made no efforts to prevent the
sale of pirated music, nor have they investigated the duplication and
distribution sources for these products. The Ecuadorian Government has yet to
establish the specialized intellectual property courts required by the 1998 IPR
law. Even though Ecuador's current substantive copyright legislation appears
generally in line with its international obligations, the performance of
Ecuador's judiciary remains deficient, in that the courts appear unwilling to
enforce the law. The United States urges Ecuador to strengthen enforcement of
IPR and will closely monitor Ecuador's efforts to address IP-related concerns.
We look forward to working with Ecuador in strengthening IPR protection and
enforcement through the upcoming U.S.--Andean FTA negotiations. U.S. FTAs are
modern, cutting-edge agreements that contain far-reaching IP provisions and
enforcement mechanisms.
GUATEMALA
The United States commends
Guatemala for implementing data protection last year for pharmaceutical and
agricultural chemical products, which is in line with international standards.
However, legislation was introduced in April 2004 to revoke data exclusivity. If
revocation were to occur, this would be a major step backwards in terms of
fulfilling the TRIPS obligation to protect confidential test data, as well as
one of the key intellectual property obligations in the recently concluded
CAFTA. The United States urges Guatemala to maintain its current data protection
regime and not roll back the progress it has achieved in providing adequate and
effective IP protection for innovative pharmaceutical and agricultural chemical
products. The United States will monitor this situation very closely.
HUNGARY
In recognition of the
ministerial decree providing for protection of confidential test data, Hungary
was moved from Priority Watch List to Watch List last year. Nevertheless, we
remain concerned about the fact that the decree provides retroactive protection
for products that received first marketing authorization in the European Union
or Hungary on or after April 12, 2001, rather than January 1, 2000, as required
by TRIPs. Hungary needs to address this shortcoming in its data exclusivity law,
improve coordination between the regulatory and patent authority to prevent
patent infringement, and improve enforcement against intellectual property
infringement by the Hungarian police, prosecutors and judiciary. We are
encouraged by the advancements that Hungary has made in modernizing its
copyright code, but poor enforcement of these laws has led to a high piracy rate
of optical and auditory media. We urge the Hungarian Government to address the
deficiencies in its data exclusivity law and continue to improve IPR enforcement
efforts in all areas of intellectual property.
ISRAEL
Israel is being maintained
on the Watch List due to continuing serious U.S. concerns regarding its policies
on data protection for proprietary test data and national treatment for U.S.
rights holders in sound recordings. In 2003 Israel was moved from the Priority
Watch List to the Watch List. Last year's move was based primarily on Israel's
improvements in copyrights and trademark enforcement, as well as on senior-level
assurances that OECD-level protection would be implemented for confidential test
data submitted by innovator pharmaceutical and agricultural chemical producers,
i.e., third parties would be prevented from relying on those data to obtain
marketing approval ("data exclusivity"). Israel has also offered assurances in
the past that it would take no action to affect its policy of national treatment
copyright protection for U.S. producers of phonograms. Over the last year,
Israel made further headway in copyright and trademark enforcement. We note that
Israel recently joined the U.S. and ten other countries in the largest single
law enforcement action ever undertaken against Internet piracy. While it remains
to be seen whether Israeli prosecutions will result from this action, we view
Israel's willingness to participate as a positive indication of Israel's
willingness to improve criminal IPR enforcement. However, U.S. industry notes
that the persistence of a significant level of piracy suggests that additional
enforcement resources may be needed.
On the key issue of data
exclusivity, Israel's actions have not met U.S. expectations. In April 2004, the
Israeli Government developed a set of recommendations on data exclusivity that
recognized for the first time the need to provide a minimum five-year period of
protection for confidential test data for innovator firms in Israel. However,
several serious shortcomings in the recommendations would severely compromise
the data protection afforded by Israel, keeping it far short of OECD-level
standards for data exclusivity. The Israeli Government has postponed further
action on its data exclusivity recommendations and provided written assurance
that it will engage with the United States to address U.S. concerns on data
exclusivity. In addition, U.S. biotechnology firms suffer from a lack of
adequate protection for their intellectual property, due to an onerous patent
system that allows competitors to stall the grant of patent rights through
open-ended, pre-grant opposition proceedings, as well as the lack of data
exclusivity. Regarding the national treatment issue with respect to copyrights
in sound recordings, new provisions in Israel's draft copyright bill, coupled
with Israel's failure to provide clarification on the future status of national
treatment, run counter to Israel's previous assurances and have reinforced U.S.
concerns that it could cease national treatment protection for U.S. rights
holders. An out-of-cycle review will be held this summer to assess whether
Israel has made sufficient progress in responding to U.S. concerns on
confidential test data, in ensuring that Israel will continue to provide
national treatment for U.S. rightholders in sound recordings, and to consider
whether Israel's Special 301 status should be changed.
ITALY
Despite the continued
implementation of the 2000 Copyright Law and increased enforcement actions in
2003, piracy and counterfeiting rates in Italy remain among the highest in
Western Europe. Widespread piracy continues in virtually all copyright-based
sectors. Furthermore, although the Italian Society for Authors and Editors
(SIAE) sticker requirement is waived for business software, a burdensome
declaration procedure is necessary. While SIAE does not charge for declaration
processing, companies must bear the internal administrative costs of following
the procedure. In addition, U.S. industry reports that Italian government
actions may adversely affect the prior practice of patent term extension for
pharmaceuticals. Despite greater enforcement efforts by Italian law enforcement
agencies and growing awareness of the economic and criminal implications of
piracy and counterfeiting among some parts of the judicial system, IPR
enforcement remains inadequate. We will continue to work with Italy to raise
awareness regarding intellectual property issues and to improve IPR protection
across all sectors. We urge the Italian Government to address the continued high
piracy and counterfeiting rates, inadequate enforcement against these illegal
activities by the judiciary, and curtailment of patent term extension for
pharmaceuticals.
JAMAICA
In January 2004, the
Jamaican Parliament approved a bill to protect geographical indications. The
Jamaican Government has also made commendable enforcement efforts over the past
year. However, while Jamaica's trademark and copyright laws are generally in
line with international standards, we remain concerned over the continued
failure to enact the Patents and Designs Act to meet Jamaica's obligations under
the TRIPS Agreement and the U.S.-Jamaica bilateral IP Agreement. We urge the
Government of Jamaica to reform its patent law as soon as possible to comply
fully with international standards for patent protection.
KAZAKHSTAN
Kazakhstan has fulfilled a
number of its IPR obligations under the 1992 U.S.-Kazakhstan Trade Agreement.
However, some additional steps are required, particularly with respect to
copyright protection and enforcement Currently, Kazakhstan's copyright law does
not explicitly incorporate protection for pre-existing works or sound
recordings. Although searches and seizures increased in volume and thoroughness
in 2003, enforcement of IPR in Kazakhstan remains weak, particularly criminal
enforcement. Very few defendants are convicted, and those who are convicted
receive only minimal penalties. As a result, piracy is still a major problem.
Industry estimated that out of a total of 17.4 million cassettes and 5.8 million
CDs that were sold in Kazakhstan in 2003, nearly three-quarters of cassettes and
CDs (12.2 million cassettes and 4.1 million CDs) were pirated copies. While new
Criminal Code provisions on IPR violations have been adopted, these provisions
do not serve as an effective deterrent because the burden of proof in criminal
cases is very high and the likelihood of conviction is low. We urge the
Government of Kazakhstan to consider strengthening these provisions. The
Ministry of Justice has developed a plan directed at improving Kazakhstan's IPR
regime that includes amending the Copyright Law to protect pre-existing works
and sound recordings. The announced plan also aims to increase coordination
among law enforcement agencies, public organizations and international
organizations in order to fight piracy. The United States supports these efforts
and will monitor the implementation and effectiveness of these proposed
measures.
LATVIA
Latvia gave high-level
attention to IPR enforcement in 2003, but needs to provide more follow-through
to IPR enforcement in order to improve the results of anti-piracy actions.
Latvia continues to be a significant consumer of and transshipment point for
pirated goods, especially from Russia. Piracy levels for motion pictures,
records and music and entertainment software, in particular, remain high.
Internet piracy is growing, particularly in the areas of music hosting,
entertainment software and pirated video games. Although some progress has been
made in the area of end-user business software piracy, unlicensed use of
business software by government ministries remains a serious concern. The United
States urges the Government of Latvia to implement its IPR action plan to both
amend current laws and enact new laws that will provide stronger IPR protection
and enforcement measures, such as civil ex parte searches. The United States
also encourages Latvia to step up the number of police raids and customs ex
officio seizures of pirate and counterfeit products, as well as prosecutions, to
demonstrate its commitment to improving IPR protection and enforcement.
LITHUANIA
Lithuania continues to make
progress toward improving its legislative framework for protecting IPR and in
combating software piracy. However, optical media piracy levels remain high and
Lithuania is a key transshipment point in the Baltic region for pirated music
CDs and audiocassettes, CD-ROMS, DVDs and video games. The United States urges
Lithuania to implement optical media rules that effectively regulate the
production, distribution, and export of optical media, and to provide for
penalties for the illegal reproduction and distribution of sound recordings. In
addition, Lithuania needs to implement its regulation on government use of
legitimate software. Although the number of customs and police seizures of
pirated and counterfeit products increased during the last year, enforcement
efforts have not made significant headway in stemming these illegal activities.
In particular, Lithuania should step up efforts to counter piracy at the retail
level and stem the inflow of illegal products through Lithuania's eastern
borders. The United States urges Lithuania to improve coordination among
relevant government ministries, police, and customs officials to bolster IPR
enforcement.
MALAYSIA
During 2003, the Malaysian
Government continued to make progress in curtailing domestic retail piracy while
increasing enforcement activities against pirate optical disc production
facilities. However, while Malaysia is publicly committed to strong IPR
protection and enforcement, it remains the world's largest exporter of pirate
entertainment software. Piracy rates remain high for optical media (especially
entertainment software) and books, and the substantial export of illegal goods
continues. Already high levels of software piracy are increasing due to lax
enforcement against infringements that occur in Internet cafes. Trademark
infringement continues to be a serious problem as well, affecting a wide range
of industries and products. The slow progress of cases through the judicial
system and few prosecutions make it difficult to combat counterfeiting and
piracy. Counterfeit pharmaceutical products are a particular concern. In
addition to strengthening patent protection for pharmaceutical products,
Malaysia also needs to protect confidential test data and pharmaceutical
products by linking the marketing approval process to the patent registration
process.
The United States remains
seriously concerned over the continued high rate of production and export of
pirated optical disc media, counterfeiting, lack of effective patent and data
protection for pharmaceutical products, and lax enforcement. USTR will conduct
an out-of-cycle review in the fall to evaluate Malaysia's progress in addressing
these concerns.
MEXICO
During the past year, Mexico
took significant steps to improve IPR protection. The United States commends
Mexico for resolving the "linkage" issue between the Mexican Institute of
Industrial Property and the Ministry of Health by implementing in September 2003
a Presidential decree that requires applicants for safety and health
registrations to show proof of a patent and proof that test data were obtained
in a legitimate manner. In addition, Mexico enacted legislation classifying
piracy as an organized crime, and has created a special IPR prosecutor within
the Office of the Attorney General (PGR). However, lax enforcement at both the
criminal and administrative level, and particularly against copyright piracy and
trademark counterfeiting, remains a serious problem. Companies continue to
report high rates of counterfeiting of trademarked products. Despite continuing
to raise long-standing concerns over these issues, many trademarks owners in
Mexico still have problems with enforcement and case administration. When
counterfeit items are discovered, injunctive relief measures issued against
trademark infringers are often unenforceable.
Copyright piracy remains a
major problem in Mexico, with U.S. industry loss estimates growing each year and
totaling $712 million in 2003 - the second largest level of losses in the
hemisphere Pirated sound recordings and motion pictures are widely available
throughout Mexico, crippling legitimate copyright-related businesses. Strong
concerns remain over the amendments to Mexico's copyright law passed by the
Congress in July 2003 and still in the process of implementation. These
amendments failed to address the comprehensive reforms needed by Mexico to (1)
effectively implement the obligations of the WIPO Copyright Treaty and the WIPO
Performances and Phonograms Treaty (Mexico is a member of both treaties); and
(2) address deficiencies in Mexico's copyright law, such as the failure to
provide for national treatment and inadequate provisions regarding the scope of
exclusive rights. The United States urges Mexico to take the necessary steps to
resolve the current deficiencies.
Enforcement against piracy
and counterfeiting in Mexico remains weak, and the few raids by Mexican
authorities result in convictions of or deterrent penalties against pirates or
counterfeiters. To strengthen enforcement, the United States urges Mexico to
expand anti-piracy and anti-counterfeiting efforts against commercial
distribution, street piracy and counterfeiting in all major cities; impose
strong criminal penalties and destroy seized products, and increase the speed of
administrative and judicial actions. In addition, the recently adopted organized
crime law should be aggressively used to combat IPR infringements. We hope that
previously held bilateral discussions on IPR can be revitalized to provide a
constructive and productive forum to address and resolve these IPR concerns in
an effective manner.
PERU
There are continuing
concerns with respect to Peru's IP regime over the lack of data protection,
weakened patent protection, widespread piracy of copyrighted works, and lack of
effective IPR enforcement. Both the United States Government and U.S. industry
remain concerned with Peru's failure to provide a period of exclusivity for
undisclosed test data submitted for marketing approval of pharmaceutical and
agricultural chemical products. Given the significant commercial damage caused
by this failure, we urge Peru to issue a data protection decree as soon as
possible. Due to Andean Community pressure, Peru continues to deny second-use
patent protection for pharmaceuticals. On copyright protection, the Peruvian
Government issued a software legalization decree in 2003 and took some steps
toward improving enforcement, however, it has yet to approve the guidelines for
software management. Piracy remains extremely high for sound recordings,
textbooks, books, motion pictures, and software. Optical media piracy is on the
rise in all sectors. According to industry sources, piracy of sound recordings
has been on the increase in the last several years and is so severe now (98% of
the market is estimated to be pirated) that it has virtually eliminated any
legitimate market, causing the remaining legitimate sound recording businesses
to shut down. While the government, in coordination with the private sector, has
conducted numerous raids over the last few years on large-scale distributors and
users of pirated goods and has increased enforcement activities, piracy
continues to be a significant problem for copyright owners. Border enforcement
measures also remain inadequate. The United States urges Peru to strengthen IPR
protection and enforcement and will continue to monitor Peru's efforts in
addressing these concerns. We look forward to working with Peru in strengthening
IPR protection and enforcement through the upcoming U.S.--Andean FTA
negotiations. U.S. FTAs are modern, cutting-edge agreements that contain
far-reaching IP provisions and enforcement mechanisms.
POLAND
Poland was elevated to the
Priority Watch List in 2003 for three main reasons: 1) the general level of IPR
protection was not improving, in part because of inadequate border controls and
the rapid growth of domestic optical disc production capacity; 2) lack of
political will to shut down the outdoor market in the Government-owned Warsaw
Stadium, where pirated and counterfeit goods were abundant; and 3) Polish law
did not provide adequate protection for pharmaceutical test data.
After being elevated to the
Priority Watch List, the Polish Government demonstrated its willingness to
address U.S. IP-related concerns, especially regarding copyright protection, and
has made changes over the past year that have provided the foundation for
long-term, sustained improvements. The United States recognizes the steps Poland
took to initiate raids to combat high levels of piracy and counterfeiting at the
Warsaw Stadium, strengthen its copyright law, pass legislation to regulate
optical disc production, and accede to the WIPO Internet Treaties. In
recognition of this progress, we are moving Poland from the Priority Watch List
to the Watch List, and scheduling an out-of-cycle review in the fall to monitor
and ensure Poland's continued efforts.
Given the firm position
taken by the Polish Government in its August 2003 IPR enforcement action plan,
we look forward to significantly increased efforts to combat piracy and
counterfeiting activities at the Warsaw Stadium and elsewhere around the
country. At the same time, serious problems, particularly in the areas of patent
protection for innovative pharmaceuticals and mechanisms for reducing the supply
of pirated and counterfeit goods, require urgent attention.
Measures to ensure effective
protection for innovative pharmaceutical products from patent infringement need
to be implemented. The commercial availability in Poland of generic versions of
patent protected pharmaceutical products is a clear indication of the weak state
of patent protection in Poland and its direct effect on U.S. company interests.
In March 2004, the Polish Government indicated that it would undertake an
initiative to institute formal cooperation between the Polish patent and drug
registration offices, which could prevent future cases of improper registration
and marketing approval. We welcome this positive signal and are awaiting
concrete measures to facilitate linkage between the two relevant agencies and to
strengthen the enforcement of existing patents.
While Polish customs
enforcement has improved over time, pirated and counterfeit goods still cross
Poland's borders far too easily. For example, pirates import large amounts of
unauthorized copies of optical media products, principally from Russia and
Ukraine. Poland should tighten its border controls in response to its new EU
obligations and continuing EU technical assistance, and we will be looking for
demonstrable results this year. At the same time, we remain concerned about the
potential for a sharp rise in locally-produced pirated optical discs. Optical
disc production capacity in Poland is growing rapidly, overshooting local
demand. Thus, we welcome changes to the Copyright Act that will impose new
regulations on optical disc production and look forward to their swift and
effective implementation.
Enforcement efforts are
undermined by weaknesses in the judicial system that include the need to train
judges and prosecutors on IPR issues, the need for better court information
management systems, and the failure to impose penalties severe enough to deter
IPR crime. We urge the Polish Government to expedite action on these points,
which concern tens of thousands of judges, prosecutors, and judicial and
prosecutorial facilities.
The United States will
conduct an out-of-cycle review in the fall to ensure that Poland continues and
even reinforces its efforts to strengthen IPR protection and enforcement and
addresses remaining concerns. Results of the out-of-cycle review will be based
on Poland's taking action in all the following areas: 1) strengthening
anti-piracy and anti-counterfeiting measures at the Warsaw Stadium and
continuing effective raids and prosecutions against piracy and counterfeiting
activities across the country; 2) strengthening the protection of test data
submitted by innovative pharmaceutical companies; 3) taking substantive steps to
implement a coordination mechanism between the Health Ministry and the patent
agency; 4) strengthening border enforcement; 5) signing into law and
implementing new copyright amendments and optical disc regulations; and 6)
taking concrete, effective steps to strengthen domestic enforcement of IPR.
Other significant developments related to IPR will also be considered during the
review.
ROMANIA
IPR enforcement did not
improve in Romania in 2003. High piracy levels continued across all sectors,
optical disc piracy grew, and poor border enforcement led to a surge in imports
of pirated material. The situation appeared to be further exacerbated by the
lack of resources dedicated to enforcement. Prosecutions of IPR violators remain
a rare event, and when cases are brought, deterrent penalties are rarely issued.
In addition, Romania lacks legislation to protect confidential test data
submitted to regulatory authorities for marketing approval. We look to Romania
to strengthen enforcement efforts by increasing raids on illegal operations,
improving and increasing prosecution of IPR violations, providing penalties that
effectively deter criminal behavior, and improving border enforcement by
providing government officials with ex officio authority to inspect and seize
IPR infringing goods. We also look for the Romanian Government to enact a law to
provide protection of confidential test data as required by TRIPS.
SAUDI ARABIA
Although Saudi Arabia is
working to improve its legal protections for intellectual property as part of
its efforts to join the WTO, a number of issues remain to be resolved. Saudi
Arabia's 2003 copyright law fails to provide adequate protection for sound
recordings or ex parte civil search orders and fails to include deterrent
penalties. Although Saudi officials report increased inspections, raids, and
seizures, piracy rates for optical discs, books, and pay television remain high.
Piracy of printed materials and the continued use of illegal software by the
government further exacerbate the problem. Saudi officials report that
enforcement of trademark laws has improved through spot checks and confiscation
of counterfeit goods. However, concerns remain about the failure to take action
at the borders to seize imported pirated and counterfeit goods and the lack of
transparency in Saudi Arabia's enforcement system overall. Saudi Arabia's patent
registration system is seriously deficient, with a backlog of thousands of
applications. While there have been no major incidences of patent infringement,
a recent decision by the Saudi Board of Grievances threatens to undercut
protection of intellectual property related to pharmaceutical products by
failing to provide exclusive patent rights afforded by the registration of
pharmaceutical inventions within a reasonable time. While we commend the
progress that Saudi Arabia has made, we also urge continued efforts to improve
IPR protection through continued sustained raids on copyright piracy sites,
improved border enforcement, improved cooperation between government officials
and rights holders, providing reports on enforcement actions and investigations
to rights holders, and imposing deterrent sentences on IPR
infringers.
SLOVAK REPUBLIC
The Slovak Republic does not
provide adequate protection for confidential pharmaceutical test data submitted
to obtain marketing approval, and the United States remains concerned about this
deficiency. The United States is also concerned about copyright piracy in the
Slovak Republic. Although video piracy has declined, imports of pirated
optical media, primarily from the Ukraine and Russia, have increased. We look to
the Slovak Republic to implement TRIPS-consistent data protection and to
increase and sustain government actions against piracy, particularly at the
border.
TAJIKISTAN
While Tajikistan has taken
steps to fulfill its IPR obligations under the 1993 U.S.-Tajikistan Trade
Agreement, Tajikistan's IPR regime has numerous deficiencies, particularly with
respect to copyright protection. Specifically, Tajikistan has not joined the
Geneva Phonograms Convention, does not provide IPR protection to foreign sound
recordings, and does not explicitly protect pre-existing works or sound
recordings under its copyright law. There are also problems with respect to the
exclusive economic rights provided to authors under the Tajik Copyright Law. In
addition, IPR enforcement in Tajikistan remains weak. Criminal penalties for IPR
violations have not yet been adopted, nor is there proper ex officio authority
to commence criminal cases. In addition, the Tajik Customs Code fails to provide
customs officials with ex officio authority to suspend the release of suspected
infringing materials at the border. The United States urges Tajikistan to
address deficiencies in its IPR laws and strengthen IPR protection and
enforcement.
THAILAND
Thailand has made some
efforts to strengthen its IPR regime through the consideration of draft
legislation and regulations, and the development of initiatives to improve
enforcement, but has achieved only limited progress. The United States continues
to have serious concerns about the Thai Government's failure to effectively
address the growth in optical media piracy, copyright and trademark
infringement, counterfeiting, end user piracy, and cable and signal piracy. We
are also concerned about Thailand's failure to date to enact implementing
regulations for the Trade Secrets Act to provide effective data protection. We
welcomed the stepped-up enforcement efforts that were initiated in the spring
and again in the early fall of 2003 and the reduction in the visibility of
retail piracy during the October APEC meeting, but are disappointed that these
efforts were not sustained and that piracy levels remain high. Enforcement
remains uncoordinated and sporadic, and the transfer of some responsibilities
from police units to the newly formed Department of Special Investigations has
caused some problems in the implementation of enforcement activities. The
production, distribution, sale, and export or transshipment of pirate and
counterfeit products continues to be a serious concern. Counterfeit and pirated
products sold in or exported from Thailand include optical discs video games,
clothing/apparel, watches, leather goods, jewelry, lighters, auto parts, mobile
phone accessories, batteries, and wine. Thailand also has one of the highest
end-user piracy rates in Asia; and book piracy and broadcast piracy are growing
problems. On the legislative side, Thailand enacted a law on geographical
indications that became effective on April 28, 2004. However, the Thai
government has failed to enact an optical disc law, and concerns remain over
deficiencies in the current version of the optical disc bill and its draft
implementing regulations. In addition, while the draft amendments to the
Copyright Act include important improvements, some additional strengthening of
the current draft is needed. These draft amendments have not yet been submitted
to Parliament. The United States will continue to work with Thailand to address
our significant concerns regarding its intellectual property laws and
enforcement, and to urge the Thai Government to take swift action to implement
specific elements of the IPR Action Plan. The Thai Government's prompt and full
implementation of the IPR Action Plan will provide an essential foundation for
the successful conclusion of an FTA between our two governments.
TURKMENISTAN
Turkmenistan has not
satisfied all of its IPR obligations under the 1993 U.S.-Turkmenistan Trade
Agreement. For example, Turkmenistan has not updated its copyright law to
reflect international standards and has not signed the Berne Convention for the
Protection of Literary and Artistic Works or the Geneva Phonograms Convention.
Furthermore, Turkmenistan does not provide explicit protection for sound
recordings or pre-existing works. IPR enforcement is inadequate. Turkmenistan
has not adopted criminal penalties for IPR violations, and the Turkmen Customs
Code does not provide ex officio authority to suspend the release of suspected
infringing material at the border. The United States urges Turkmenistan to adopt
the needed legal reforms and commence activities to strengthen IPR protection
and enforcement.
URUGUAY
The Uruguayan Government has
yet to pass the implementing regulations for its 2002 copyright legislation to
improve and strengthen Uruguayan copyright protection. IPR enforcement remains
ineffective as evidenced by the Uruguayan Supreme Court pardoning of a known
trademark infringer. Furthermore, the Uruguayan Government has not ratified the
WIPO Performances and Phonograms Treaty and the WIPO Copyright Treaty. Uruguay
also fails to provide adequate protection for confidential test data as required
by TRIPS We urge the Uruguayan Government to quickly pass implementing
regulations for the new copyright legislation, ratify the WIPO Internet
Treaties, address its deficiencies in enforcement against piracy and
counterfeiting and provide protection for confidential test data.
UZBEKISTAN
Uzbekistan has recently
announced a plan to amend its IPR laws, improve its IPR enforcement, and join
both the Berne Convention for the Protection of Literary and Artistic Works and
the Geneva Phonograms Convention. Nevertheless, Uzbekistan still appears to be
out of compliance with its intellectual property commitments under the 1994
U.S.-Uzbekistan Trade Agreement, particularly with respect to copyright
protection and enforcement. Uzbekistan does not provide protection for sound
recordings or pre-existing works. IPR enforcement remains very weak, and weak
criminal penalties for IPR violations do not serve as an effective deterrent.
The United States urges Uzbekistan to remedy deficiencies in its IPR laws and to
take measures to improve enforcement.
VENEZUELA
The Venezuelan Government
continues to show signs of decline in its commitment to IPR protection. In 2003,
government policies regarding pharmaceuticals continue to raise concerns because
they undermine patent and data protection for pharmaceutical products. The
Venezuelan Government continues to grant marketing approval for domestic copies
of patented pharmaceutical products and refuses to issue second use patents.
Proposed changes to the new Industrial Property Law currently being debated in
the National Assembly threaten to worsen the legal framework for protection of
intellectual property. Levels of piracy and contraband have grown increasingly
problematic while government efforts toward deterrence and prosecution of these
illegal activities remain minimal. We urge the Venezuelan Government to improve
IPR protection and to take action against the growing problems piracy and
counterfeiting.
VIETNAM
IPR violations remain a
major problem in Vietnam, and enforcement continues to be ineffective despite
improvements in laws and regulations. Judges in Vietnam have been reluctant to
impose penalties or fines at a level sufficient to deter future infringements,
and ex officio raids are sporadic at best. As a result, piracy remains rampant
throughout Vietnam. Nearly 100 percent of sales of music CDs, VCDs and DVDs are
pirated copies. Trademark violations are also prevalent, with unlicensed
clothing and other items bearing famous trademarks available for purchase in
small shops and stands throughout major cities. Patent protection remains
inadequate, despite amendments to Vietnam's civil code extending the term of
protection from 15 years to 20 years. Counterfeit pharmaceuticals are common in
the marketplace. Market access barriers persist, especially with regard to
products classified as "cultural products" that are subject to censorship and
control regulations. Such barriers impede importation of legitimate products.
However, Vietnam has made some efforts to strengthen IPR protection, including
enacting stronger regulations in various sectors that require increased
inspections and raids against suspected infringers. We will work with Vietnam to
ensure full compliance with all of its obligations. We encourage Vietnam to
continue to build upon its strong public commitment to IPR protection by
translating Vietnam's obligations under the U.S.-Vietnam Bilateral Trade
Agreement into strong laws and effective enforcement against piracy and
counterfeiting. |