USTR Report Lays Out IP Trade Agenda For 2007

By Tove Iren S. Gerhardsen
The United States will pursue stronger intellectual property rights and enforcement in multilateral forums such as the World Trade Organization (WTO) as well as in free trade agreements and regional agreements, and is considering dispute settlement cases against several countries on IP.

The 467-page President’s 2007 Trade Policy Agenda and 2006 Trade Barriers Report were released on 1 March and are available on the website of the Office of the US Trade Representative (USTR), www.ustr.gov.

The United States will place particular attention on perennial countries of concern such as China and Russia, will closely monitor major trading partners such as Canada and the European Union, and will place additional focus on countries like Argentina, Chile, Paraguay and Turkey. Stronger IP rights and enforcement is a major priority in all US multilateral and bilateral trade talks in 2007, but in some regions such as the Asia-Pacific Economic Cooperation (APEC) countries, the focus also will be particularly extensive in 2007, the report said.

“In addition to our ongoing efforts with China, USTR will also devote considerable energy to ensuring that Russia improves its IPR regime, building on the commitments negotiated bilaterally with Russia as that country moves into the multilateral phase of negotiations for its accession to the WTO,” the report said.

The report covers discussions at the WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS), but also bilateral and regional trade talks and the annual US Special 301 review of countries deemed lacking in their protection of US intellectual property rights. The Special 301 report is typically published in April each year.

“The administration will be intensifying its efforts in constructive engagement with the trading partners listed in the annual Special 301 report with the goal of helping these trading partners to achieve stronger IPR regimes,” the report said.

For TRIPS, the US objectives are to: resolve differences through consultations and use of dispute settlement procedures; continue efforts to ensure developing countries fully implement the agreement; continue to encourage a “fact-based” discussion within the TRIPS Council on the TRIPS enforcement provisions; and ensure that TRIPS provisions are not weakened.

The United States will continue to argue that an amendment to the TRIPS agreement to bring it into line with the Convention on Biological Diversity (CBD) is neither necessary nor appropriate, the report said.

Also in the TRIPS context, the United States said it will continue to fight efforts by the European Union and others to create a mandatory, legally binding register of geographical indications (GIs), names derived from geographical origins, such as Scottish whiskey. The US strategy will be to “aggressively pursue” garnering additional support for a proposal to make the register voluntary. It also will continue opposition to extending GI protection to products other than wines and spirits and a “clawback” proposal get new GI protections as part of the WTO agricultural talks.

A general IP concern for the USTR in many developing countries is data protection for pharmaceuticals, meaning “protecting confidential data submitted by pharmaceutical firms to government health authorities to obtain marketing approval,” the report said. The number of years such data is protected depends on countries’ legislation.

Emphasis on Enforcement

The report noted that in 2006, the United States and other countries pushed for enforcement of the TRIPS agreement to be considered in the TRIPS Council. It also said the United States “continued to press for full implementation of the TRIPS agreement by developing country members and participated actively during the reviews of legislation by highlighting specific concerns regarding individual member’s implementation of the agreement’s obligations, particularly with regard to China’s efforts.”

USTR said the US also “continued to seek satisfactory responses” to a formal request submitted to China in October 2005 seeking additional enforcement-related information pursuant to Article 63.3 of the TRIPS agreement” (IPW, WTO/TRIPS, 25 January 2006).

On China, the report said that counterfeiting and piracy “remain at unacceptably high levels and cause serious economic harm to US businesses in virtually every sector of the economy.” It said that the US is allocating extra staff to this issue in the US and China and remains ready to take appropriate action, including WTO dispute settlement measures, if necessary.

US Preparing Dispute Settlement Cases on TRIPS

USTR is preparing to take action against other WTO member countries for failure to implement the TRIPS agreement, it said. “There are a number of other members that appear not to be in full compliance with their TRIPS obligations. The United States, for this reason, is still considering initiating dispute settlement procedures against several members,” the report said.

“We will continue to consult informally with these members in an effort to encourage them to resolve outstanding TRIPS compliance concerns as soon as possible. We will also gather data on these and other members’ enforcement of their TRIPS obligations and assess the best cases for further action if consultations prove unsuccessful,” it said. USTR also continues to press the European Union on amendment of its GI regulation, which it said was found out of compliance with WTO rules.

The United States and Chile have also since 1999 been involved in a dispute settlement case regarding patents and medicines, test data protection and implementation of TRIPS, but as eight of the 10 issues were settled in 2002, “The United States reserved its rights with respect to the remaining issues, and the dispute remains in the consultation phase with respect to these issues,” the report said.

IP Requirements in US FTAs

The report also discussed IP issues in the implementation of already-signed bilateral free trade agreements (FTAs) as well as language in upcoming ones. For instance, in 2006, USTR particularly followed Australia’s implementation of copyright laws, and provided comments to the Australian government on its draft legislation. USTR praised amendments made to the Australian Copyright Act.

As for Chile, with whom the US signed an FTA in 2004, the issue of IP protection and especially data protection was high on the list in 2006. USTR initiated a Special 301 “out-of-cycle” review of Chile. As a result, Chile was elevated from a Watch List country to a Priority Watch List country. “The United States will continue to work with the Chilean government in this area,” the report said.

On the 2001 US-Jordan agreement, the US will continue to monitor implementation related to IP in the coming year, the report said. The report also noted the FTA with Central America and the Dominican Republic from August 2004 “offers state-of-the-art protections for digital products such as software, music, text and video. Protection for patents and trade secrets meets or exceeds obligations under WTO TRIPS.”

Strengthening IP protection and enforcement is also on the agenda of the current discussions on an FTA with the United Arab Emirates, the report said, as is the case in the FTA with Oman signed in January 2006. Five rounds of negotiations have also been held with Malaysia on an FTA, but the report stated that, “While Malaysia already has taken some steps to strengthen its IPR and customs regimes, the United States will seek to include in this FTA provisions that bring Malaysia’s intellectual property and customs regimes up to the standards set in other recent free trade agreements.”

Russia and Beyond

The report said that US industry, as well as a number of members of Congress who have written to USTR, are concerned about the lack of IP protection in Russia. Criminal investigations are also underway, it said.

As part of the binding November 2006 bilateral market access WTO agreement, Russia has promised to: “fight optical disc and Internet piracy, protect pharmaceutical test data, deter piracy and counterfeiting through criminal penalties, strengthen border enforcement and bring Russian laws into compliance with WTO and international IPR norms.” The report said that Russia has “pledged” that its IP regulation will be fully TRIPS compliant upon joining the WTO. “Poor enforcement of IPR is a pervasive problem,” the report said.

USTR views APEC as a key way to reach regional problems on IP protection and enforcement. The United States will work with Australia, the APEC Chair in 2007, to develop concrete actions in each of these areas, it said.

Building on the 2005 APEC Anti-Counterfeiting and Piracy Initiative, APEC economies endorsed two new IP guidelines in 2006, the report said, in close cooperation with Korea, Hong Kong and Japan: “One, to better inform citizens about the importance of IPR protection and enforcement, and another to help secure business supply chains against counterfeit and pirated goods.” These were added to three earlier, similar guidelines, the report said. “In addition, the United States obtained APEC agreement to pursue further work in 2007 on IPR protection and enforcement in close consultation with the private sector,” it said.

USTR also will further its focus on the regional subset, the Association of Southeast Asian Nations (ASEAN). The report highlighted ASEAN’s “support for the development of harmonized standards for pharmaceutical registration and approval to speed the introduction of innovative medicines to markets and patients in ASEAN countries.”

Other Possible WTO Violations

On Canada, the report said that the United States is concerned about copyright and digital content protection, since it has not ratified all World Intellectual Property Organization treaties it signed up to. Concerns also centre on Canada’s border enforcement to prevent trans-shipment of infringing products. “Canada’s border measures and general enforcement raise concerns about Canada’s implementation of the requirements of the WTO TRIPS Agreement,” it warned.

The US did, however, hold bilateral talks with Canada in October 2006 on the need for a new copyright legislation, and it said Canada has now published new regulation on the protection of pharmaceutical test data, for eight years.

Argentina is also being watched: “Concerns remain as to whether Argentina’s IPR regime meets certain TRIPS standards, such as obligations concerning the protection of data submitted to support the approval of pharmaceuticals. Failure to provide adequate protection for copyright and patents has led to Argentina’s placement on the Special 301 Priority Watch List.” US trade benefits under the US Generalised System of Preferences (GSP) programme remain suspended for certain products, the report said.

Brazil appeared to pass US scrutiny last year in terms of copyright enforcement after intensive engagement, the report said. A review was conducted of Brazil’s US trade benefits under the GSP programme, and benefits were continued after the establishment of a public-private National Anti-Piracy Council, the development of a national action plan to combat piracy and increased police actions. Meanwhile, Paraguay, which has in the past received careful scrutiny for its IP protection, was praised for measures it took, including steps to implement a bilateral memorandum of understanding, the report said.

For the European Union, the report refers to a 2005 agreement on US-EU cooperation against global piracy and counterfeiting. Intellectual property rights protection also is among the 11 main areas in the two areas’ plans for the future.

Turkey also has IP issues for the US. “Turkey does not have a patent linkage system in place to prevent generic drugs that infringe the Turkish patents of US pharmaceutical companies from receiving marketing approval in Turkey,” the report said. “Turkey has a registration regulation for protecting confidential test data which provides a six-year term of data exclusivity protection for pharmaceutical test data, however the regulation contains several provisions that may not be consistent with TRIPS requirements. The US is addressing these issues with the Turkish government. Improving enforcement against copyright piracy and trademark infringement in Turkey also remains an issue,” the report said.

Also for the EU newcomers, the USTR was concerned about IP and its 2006 priorities seem to continue in 2007: “USTR has worked to encourage Bulgaria to re-establish strong IP protection after piracy and counterfeiting problems began growing in recent years,” it said. “A top USTR priority in 2006 remained protecting the confidential data submitted by pharmaceutical firms to government health authorities to obtain marketing approval.”

William New and intern Stephen Flug contributed to this report.

Tove Gerhardsen may be reached at tgerhardsen@ip-watch.ch.