Special Report: US IP Attachés Report To US Industry On Activities Abroad

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WASHINGTON, DC – The United States Patent and Trademark Office (USPTO) programme of strategically placed intellectual property lawyers in key locations abroad continues to grow. And the annual report of a lineup of these IP attachés this week at the US Chamber of Commerce showed they are having some success.

IP attachés to the World Trade Organization, United Nations (Geneva), China, India and region, Russia and region, South America, Mexico and region, Middle East, and Southeast Asia, reported on 17 December to industry representatives at an event organised by the US Chamber of Commerce Global IP Center (GIPC).

In general, the attachés sounded somewhat more conciliatory than in earlier years of the programme, appearing to show a degree of patience with developing countries as they move toward stronger IP systems, and offering explanations where they are not making sufficient progress. A number of the speakers mentioned the annual US Trade Representative’s Special 301 process for naming trading partners seen as not adequately protecting US IP rights.

UN in Geneva

Kristine Schlegelmilch, recently arrived IP attaché to the World Intellectual Property Organization and the other UN organisations in Geneva, briefly discussed last week’s extraordinary WIPO General Assembly. She noted the passage of the WIPO budget for 2014-2015, after the suspension of talks in September.

Schlegelmilch reported on the contentious issue of new WIPO external offices, saying that China and Russia were allowed to go forward with receiving new offices in exchange for confirmation that the external offices will engage in no activities relating to the Patent Cooperation Treaty, the lucrative agreement allowing multi-country patent applications managed by WIPO.

The concern about PCT, she said in response to a question from Intellectual Property Watch, is that business confidential information should continue to be managed by WIPO headquarters, where there is proper protection established. “We don’t see why that process should be taken out of Geneva,” she said.

She also mentioned that the office WIPO proposed to create in the US was of secondary importance to the US’s (and other developed countries’) wish to ensure a sound process exists for deciding where and why offices are opened. A number of countries have signalled dissatisfaction with the way China and Russia were identified and deals were signed. There is demand for offices (some 22 countries have made requests) but WIPO’s budget does not have the capacity for all, she said.

The issue of new offices became politicised, so is now delinked from the budget, she added, and members will be working to put together a plan for considering new offices to present to the annual WIPO General Assembly next September.

On a potential WIPO treaty on industrial design, Schlegelmilch acknowledged that the proposed diplomatic conference (final treaty negotiation) was pushed back from May to next December, still to be hosted by Russia.

She noted this week’s meeting at WIPO of the Standing Committee on Copyright and Related Rights (SCCR), which has been looking at a potential broadcasting treaty. She said the committee is under significant pressure from demandeurs to finalise a new instrument.

Also at WIPO, Schlegelmilch said there has been a “resurrection” of the issue of geographical indications, and the US is working to ensure that other kinds of systems (such as trademark) continue to be respected.

Finally, she mentioned the election of a new director general at WIPO, providing some detailed information on the four candidates. The US government is working internally to consider all of the candidates and will continue to do so throughout the period until the member states’ final decision in May, she said. She did not publicly signal which candidate the US is supporting, which another official said later is standard policy for the US in relation to UN elections.

In response to an audience question, Schlelgelmilch said she has “certainly noticed a disconnect” between national foreign affairs offices and national IP offices. USPTO would like to be talking to the IP offices more, she said, and would like that message to “trickle back” to Geneva. In this regard, stakeholder perspectives would be extremely helpful, she told the audience. If companies have partners, subsidiary bodies, or representation, they should stress how important to have strong IP climate, she said, and would hope message makes it back to Geneva.

WTO

Karin Ferriter, IP attaché to the World Trade Organization, highlighted activities in Geneva, with reference to the recent successful outcome of the WTO ministerial in Bali, Indonesia.

She mentioned in particular the extension of the moratorium on use of the WTO non-violation clause in relation to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The non-violation clause allows a WTO member to bring a dispute over a measure taken by another member that causes unexpected economic harm, even if it does not technically violate a WTO agreement.

“We think it is an important argument that we want to be able to make in the future,” Ferriter said. The US will be working to change the moratorium over the next two years, as members agreed to begin discussing it in the spring.

Ferriter also mentioned concern related to TRIPS protection of issues like traditional knowledge and genetic resources, where she said some countries are trying to take information that is in the public domain and put rights on it. In addition, there has been some discussion of environmental technology in the WTO Council on TRIPS, which the US has been using in a positive way, she said. And she mentioned the issue of geographical indications, which she said is not likely to be moving at WTO as it has picked up at neighbouring WIPO.

Ferriter called on industry to help provide information about their transfers of technology to developing countries, as the US is required to report to WTO on activities in this area every year. And she noted that every year, several members are reviewed at WTO, and the US has opportunities to ask questions in TRIPS Council, so industry should feel free to suggest questions in order to improve the dialogue with members on how to improve their work on IP rights.

On a question of what business can do to get its voice at international organisations, Ferriter said she can help make introductions, and that observers are permitted at back of room in many negotiations, usually umbrella organisations that can have different people. She suggested a message that might resonate on the industrial design treaty would be that under such a treaty, a developing country would not need a local attorney in order to file outside their own country.

Finally, Ferriter raised the apparent disconnect between developing country views in Geneva and those on the ground in those countries. She said countries like India tell them IP is not important, but when they are speaking to large and small companies in those countries, they are asked how they can get more protection.

Mexico, Central America, Caribbean

Michael Lewis, regional IP attaché for Mexico, Central America and the Caribbean, spoke about efforts in the region, emphasising, for instance, enforcement in Mexico.

Southeast Asia

Peter Fowler, regional IP attaché for Southeast Asia, pointed first to the overarching effort in Southeast Asia to build the single market of the Association of South-East Asian Nations (ASEAN). He gave data on the size of the market showing its importance to the United States.

Fowler noted that four of the 10 ASEAN members are in the Trans-Pacific Partnership agreement negotiations, and said the US hopes that as those four eventually set a higher standard on intellectual property that there will be a “ripple effect” of other ASEAN countries raising their standards too, in order to compete. Currently, IP protection varies widely throughout the region, he said.

Other top issues going forward include TPP, and working with Burma as it creates an entire IP framework that will at minimum meet TRIPS obligations with recognition that it needs to do more, he said. Burma is considering legislation based on the Malaysian model to set up an IP system and IP courts.

Also, he noted that as internet capacity increases in the region, piracy is expanding not just from Chinese websites but now from the region itself. Legislation is needed to block websites as a way to deal with the problem in a fairly expedited fashion, he said.

As to challenges, Fowler listed issues for TPP members, saying that Brunei is a small market but is going to be a high-quality one, though it still has some piracy issues. Malaysia has seen significant improvement, he said, especially since a copyright law was put in place two years ago. It has a trademark law going into place in a few months, and the country is positioning itself in the biotechnology area.

Ambitious Singapore is the furthest along in the region, and he noted its launch to be a regional “IP hub” last summer. Vietnam has a long way to go, still somewhat overwhelmed with challenges, but he said he thinks they see the advantages of IP protection. The country has taken steps on customs and a big move was creating specialised IP courts, he said. Burma has so many challenges it is overwhelmed, but the US has been working with Australia, Japan and others to help with various pieces. Finally, he mentioned that the political unrest in Thailand has “really put restart button on everything,” and has been “disappointing.”

Middle East

Aisha Salem, IP attaché for Middle East and North Africa, is getting close to being given an office location in the unstable region, and it hopefully will be settled by next summer, she said.

Most recently she was in the United Arab Emirates (UAE), where she addressed, among other things, the problem of re-exportation of counterfeit goods from Dubai. The Dubai municipality does not have destruction or disposal capabilities, so it sends the goods back to Dubai customs, which then sends them back on their way. Furthermore, there is a new draft law for combatting fraud that would legalise this re-exportation, she said, and it has already been approved by one level of government. But she said she has been given assurance the provision will be removed before it is finished. Meanwhile, efforts are focussed on destruction.

Also in the UAE, she said there is a lack of collecting societies as the current copyright law does not permit these, so there is work on new laws. The issue is on the agenda of the upcoming Gulf Cooperation Council, she said, where there is talk of an umbrella collecting society. The local music industry is engaged, among others.

In Kuwait, there is a “desperate need” to update the copyright law. Copyright enforcement gets moved around within government, leading to a lot of confusion, she said. In Morocco, she spent a week in Casablanca with the national patent office, and a number of US software companies have discussed a uniform message to the government about the use of unlicensed software.

Next she heads to Oman, where they will be re-engaging in the training of judges.

China

Joel Blank, IP attaché for Beijing, discussed the magnitude of trade between the two countries. There are three USPTO officers in China alone.

He mentioned the problem of trade secrets, and said there are indications that the Chinese government is showing more interest in the issue, perhaps because there are more reports of theft between Chinese companies. But he said there are concerns, such as the lack of political will to undertake protection. Trade secrets are hard to enforce because of the lack of information about them, among other things making it difficult to understand the competition. Also in China it is difficult to gather enough evidence to prosecute, he said, and in general there is a lack of transparency in litigation processes. The complaint he hears most about China is about lack of transparency.

Another concern is China’s system of encouraging indigenous innovation, providing subsidies for patents. He questioned whether this spurs innovation.

Blank said USPTO is concerned with what seems to be a shift away from criminal to civil enforcement of IP infringement. There have been letters exchanged and draft legislation is still moving around within the government.

Russia and CIS

Donald Townsend, regional IP attaché for Russia and the Commonwealth of Independent States, based in Moscow, said copyright violations via the internet continue to be a serious problem. Copyright law is needed to cover all types of copyright, he said.

A high point has been the gradual decrease in pirated software. And there is a new specialised IP court, which is a significant milestone, he said. There also is a court reorganisation taking place that will shift IP court appeals, but the effect of that is not yet known.

Townsend also mentioned Ukraine, and said the US continues to engage the government on three issues in the Special 301 report: government use of unlicensed software, piracy, and counterfeits from China.

India and South Asia

Kalpana Reddy, regional IP attaché for India and South Asia, noted that USPTO has had a presence in India for more than seven years. There have been positive trends, but also concerns, for instance from the pharmaceutical industry.

On the positive side, she pointed to copyright, with the 2012 passage of a copyright amendment. She discussed an advisory body with representation from different stakeholder groups like the copyright and software industries. Reddy also mentioned a bill on cinematographic camcording, but said it may not make it to Parliament before they go on break.

On concerns, she offered some possible explanations for India’s behaviour, that it is a developing country with challenges that may not be familiar to the US, and having policies designed to promote the national industrial development and create jobs.

India does need an effective enforcement system, Reddy said, and she has been conducting engagement and research programmes. “I can honestly say there is a growing awareness of the importance of protecting IP,” she said, but there is still a long way to go. On the issue of India not accepting the western IP system wholesale, she said a reaction in the United States would help. India has significant resource constraints, but it is looking at the issues, such as specialised courts, judges, or procedures. But it is all going to take time, she said.

In response to a question, Reddy said India last year began considering a utility patent model, and the question is whether and when they will do it. There is concern about additional burden on the IP office, and with national elections pending soon, the focus is on politics.

She also responded on India’s efforts to establish its traditional knowledge digital library, which she said appears to be working, though it is apparently only available to patent offices.

South America

Albert Keyack, regional IP attaché for South America, is based in Brazil and spends most of his time on Brazil issues, he said.

On enforcement, he said that many of the countries of Latin America are on the Special 301 watch list.

Keyack said Brazilian authorities say they find a high percentage of counterfeit goods not from Brazil, but they don’t know where they come from. This led China attaché Blank to raise his hand and submit with a wry grin, “I know where they come from.”

Keyack has been involved in regional training, and said the countries “are really trying.” Brazil is attacking counterfeiting “fairly strongly.”

A positive area is judicial training, including a training held in Peru for the whole region, he said. Other notes were that despite being the fourth oldest patent office in the world, Brazil has long pending times for patents and trademarks. He noted the change in leadership at Brazil’s patent office last week.

He also noted that Brazil has a separate system for pharmaceutical patents, and said that pharma patents submitted through the “mailbox” Brazil set up from 1995 to 1997 (while it developed legislation implementing TRIPS), are near the end of their 20-year life.

There is a bill in Brazilian Congress that would change the scope in the country for patent claims, and would add the India standard that requires a significant advance to be shown in order to be granted a patent, he said.

As for internet and copyright issues, Keyack said there is more downloading as more people get online, so they are trying to figure out how to stop unauthorised downloads. There are two relevant bills, including the marco civil, which includes internet neutrality and freedom of expression. This came up for a vote and then was pulled back, he said, and now has become “a bit of a political football.” He said there is some effort to include criminal liability, that the net neutrality issue seems to be solved, and that as written, the bill would stop short of notice and takedown procedures for removing unauthorised content.

There is also a copyright bill pending, but it is seen as coming after the marco civil, he said.

Q&A

On a question about Chile’s commitment to the TPP, Keyack answered that the country has a strong IP office and he did not think the recent election there would affect its TPP work. He added that countries in the region tend to connect IP rights with innovation, with the exception of Brazil.

This led Townsend to comment that Russia also lacks the connection between innovation and copyright, though it does seem to see the connection with patents.

Finally, attachés in the BRIC countries (Brazil, Russia, India, China) were asked whether they are coordinating their efforts in response to increased coordination among those nations. They responded that they are aware of the BRIC coordination but are not themselves formally coordinating as such, though they exchange information.

Brazil’s draft patent law contains clauses that came from India’s patent law, Keyack said. Aspects of India’s laws appear in other spaces, and government has some concerns, industry may have others, Reddy said. The BRIC countries “don’t share their playbook with us,” she said.

Townsend said what is happening in India is definitely being looked at as an idea in Russia.

There is also some coordination among like-minded countries through the IP5 group, though that also includes China, an official noted afterward.

A Chamber GIPC representative summarised the event by saying, “intellectual property is the lifeblood of our industry.”

IP Delivers Database

Also at the event, Aaron Smethurst, director for international IP at the host GIPC, presented the IP Delivers programme.

“We have launched the international IP education campaign, IP Delivers for a year and a half now,” he said in describing his message to the event. “We have been using the platform to actively relay the importance of intellectual property to policymakers, thought leaders, and the general public. Today, we took these efforts up a notch by launching the IP Delivers Research Database.”

In the database, he said, “we have collected, categorized, and summarized an assortment of studies that show the important impact IP has on our world. Our hope is that policymakers, thought leaders, and businesses will utilize the various dynamic features of the IP Delivers Research Database to educate themselves and be better informed of how IP creates jobs, fosters innovation, and delivers access to new content and technology.”

They also encourage organisations to identify additional studies that could be added to the database and share them.

 

William New may be reached at wnew@ip-watch.ch.

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