USTR Announces “Notorious” Markets For Counterfeiting, Piracy In 2013

The Office of the United States Trade Representative today published its annual list of online and physical marketplaces worldwide that are most engaged in sales and trafficking of counterfeit and pirated goods.

The list [pdf] does not target countries, but rather specific markets, and is based on reports from industry and elsewhere.

For the online marketplaces, many of the worst appear to be operated out of top developed countries such as the United Kingdom, Canada, Sweden, the Netherlands and France. These are joined by websites based in China or Russia, and other developing countries. The report notes that websites are moved around in order to avoid detection, though it also details recent successful takedowns of infringing sites.

The persistence of the Pirate Bay, originally from Sweden, gives an indication of the difficulty in controlling online activity.

“Despite the criminal conviction of its founders, Sweden-based The Pirate Bay continues to navigate the globe and the country code top level domain (ccTLD) system to facilitate user downloading of unauthorized copyright-protected content,” the report says.

In December 2013, alone, the Pirate Bay changed ccTLDs five times, it says. “According to press reports, the operators have registered dozens of domain names and continue to search for a permanent home after being swiftly shut down by government authorities in several countries, most recently in Peru, Chile, and Guyana. At last report, the operators have returned the site registration to Sweden.”

“In addition,” it adds, “the site released its own web browser designed to evade network controls and reportedly has plans to offer software to circumvent conventional methods of enforcement. Network security experts have criticized The Pirate Bay for failing to follow security best practices in the development of their software.”

As to physical markets, the report gives a matter-of-fact explanation that many of the well-known largest and most-offending markets have been able to carry on operations for up to a decade or more with little interruption. China is named prominently for physical markets, but also several in Latin America (e.g., Argentina, Colombia, Ecuador, Mexico, Paraguay), as well as India, Indonesia, Spain, Thailand and Ukraine.

As an example of the haplessness of enforcement efforts, the report says the Ciudad del Este market in Paraguay has been on USTR lists for over 15 years, despite international attention and some actions by the national authorities.

“The city’s economy is reportedly sustained in large part by trafficking of counterfeit and copyright-infringing goods by regional organized crime groups,” the report said. “The situation in Ciudad del Este has not improved over the past year or even the past decade.”

But the list also cites a number of positive developments, including the removal of some markets from the list. These include Canada-based IsoHunt.com, which shut down and paid a large fine, and several sites in China like GouGou.com that closed the infringing part of the online business in order to keep operating legitimately, or like Baidu.com, for which USTR received no recommendations to place it on the list.

About the list, USTR offers a caveat that, “The Notorious Markets List does not purport to reflect findings of legal violations, nor does it reflect the United States Government’s analysis of the general IPR protection and enforcement climate in the country concerned,” the report states.

Rather, the list “identifies marketplaces that have been the subject of enforcement actions or that may merit further investigation for possible intellectual property rights (“IPR”) infringements,” the report says. “These markets have been selected for inclusion both because they exemplify concerns about trademark counterfeiting and copyright piracy on a global basis and because the scale and popularity of these marketplaces can cause economic harm to U.S. and other IPR holders. They may also pose health and safety risks to consumers.”

The list is not exhaustive, but rather represents examples of some of the worst offenders, the report says. It was begun in 2010, as a separate “out-of-cycle” review from the annual Special 301 review that names countries seen as inadequately protecting US IP rights.