Some Major Trading Partners Are Biggest IP Violators, USTR Says

The United States Trade Representative’s office yesterday issued its annual report naming countries that it says are the biggest infringers of US intellectual property rights, among them some of the country’s biggest trading partners. Meanwhile, questions were raised about the close adherence to industry views in the report.

In its Special 301 report, in which USTR places countries on lists by degrees of severity of the problem, is used to threaten countries with the loss of unilateral trade benefits if they do not improve.

This year, USTR tied the IP efforts to jobs in the United States. “When trading partners don’t protect IPR, they threaten those critical jobs and exports,” US Trade Representative Ron Kirk said in a release.

This year, the trade office looked at 77 countries and placed 13 on the “priority watch” list, the highest concern. The list suggests a political element as well as containing some of the biggest US trading partners and closest allies: Algeria, Argentina, Canada, Chile, China, India, Indonesia, Israel, Pakistan, Russia, Thailand, Ukraine, and Venezuela. There were 27 countries on the “watch” list.

Russia is notable because it is joining the World Trade Organization this year, meaning it will be held to compliance with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Although being placed on USTR’s unilateral list could eventually lead to sanctions against a country, it mainly represents bilateral talking points for the coming year. Ukraine, a country whose imports into the US actually were sanctioned several years ago for failing to address US concerns, had improved but this year is back on the list. Spain and Malaysia, meanwhile, were praised for getting off the list.

“Malaysia has been removed from the Watch List after making significant strides, including passing copyright amendments that strengthen copyright protection, stepped-up IPR enforcement, and promulgating regulations to protect pharmaceutical test data,” USTR said in the release. “In addition, Spain has been removed from the Watch List because of its adoption of regulations implementing a law to combat piracy over the Internet.”

But, it added, “Ukraine is being moved to the Priority Watch List from the Watch List in light of serious and growing concerns relating to counterfeiting and rampant piracy, including piracy over the Internet.”

The 2012 Special 301 report is here [pdf].

Essential Policy Tool or “Fact-Free” Industry Pap?

In assembling the report, USTR carefully consults US industry, among others, and it is well-established that the report usually reflects many of the industry concerns.

Lobbying groups representing IP-intensive industries issued releases yesterday hailing the report and the importance of protecting IPRs.

“The Special 301 process is an important mechanism for policymakers to assess who is playing by the rules of the global trading system, and more specifically, whether countries are adhering to their intellectual property obligations under trade agreements,” said Mark Elliot, executive vice president of the US Chamber of Commerce Global IP Center. “Strong rules and effective enforcement regimes are an essential measure of the climate for companies small and large who wish to conduct business with foreign countries.”

Elliott signalled that USTR followed much of the Chamber’s advice on the eight countries on which it commented. “We are encouraged that USTR recognizes many of our same concerns in these eight countries,” he said.

Steve Metalitz, counsel to the International Intellectual Property Alliance (a consortium of the nation’s largest IP trade associations), said in a release: “By seeking concrete solutions to piracy and barriers to market entry in those markets most affected by these distortions, USTR’s Report signals strongly the Administration’s commitment to protect one of our nation’s most valuable assets.”

Meanwhile, from the public interest perspective, serious questions were raised about credibility of the report and the US government’s close relationship with industry.

“Once again the US Trade Representative has produced a fact-free report that ignored any point of view except that of big media companies,” Rashmi Rangnath, director of the Global Knowledge Initiative at Public Knowledge, said in a release. “We are distressed that countries which have yet to pass harsh legislation being pushed around the world remain on the watch lists, while countries which give in to US pressure, such as Spain, are removed when they pass punitive legislation.”

“We are particularly distressed that Canada remains on the Priority Watch List, even though Canadian laws provide greater rights to copyright holders than US laws,” Rangnath said. “It appears that these rights are not stringent enough for the special interests pushing for even stronger measures.”

Michael Geist, a University of Ottawa law professor, criticised the report for lacking a legal basis. “While inclusion on the list is designed to generate embarrassment in target countries, this year’s report should elicit outrage,” he said. “Not only is the report lacking in objective analysis, it targets some of the world’s poorest countries with no evidence of legal inadequacies and picks fights with any country that dare adopt a contrary view on intellectual property issues.”