The United States Trade Representative (USTR) is removing Czech Republic, Hungary, and Poland from its Special 301 Watch List of countries that dont do enough to protect intellectual property, but remains concerned about Chinas implementation of ‘indigenous innovation policies that may unfairly disadvantage U.S. IPR holders, according a “Special 301” Report released last week.  


However, USTRs Special 301 Report again highlights the prominence of IPR concerns with respect to China.  


We are seriously concerned about Chinas implementation of ‘indigenous innovation policies that may unfairly disadvantage U.S. IPR holders. Procurement preferences and other measures favoring ‘indigenous innovation could severely restrict market access for American technology and products, said Ambassador Kirk. Creating an environment that nurtures innovation and entrepreneurship is a worthy goal, but China must maintain a level playing field.  


The Report identifies a wide range of other serious concerns, ranging from the severe problems of piracy and counterfeiting in China, to the challenge of Internet piracy in other countries, to ongoing systemic IPR enforcement shortcomings in many trading partners.  


As noted above, key significant developments in this years Special 301 Report include the following:  



  • Czech Republic-The Czech Republic is being removed from the Special 301 Watch List because of significant progress made over the past two years to control effectively its border markets. Moreover, a new criminal code raising the maximum penalties for IPR related crimes from 2 to 8 years imprisonment and criminalizing the manufacture and storage of counterfeit items came into effect January 1, 2010. The United States will continue to monitor whether the new law results in the imposition of deterrent penalties.
  • Hungary-Hungary is being removed from the Special 301 Watch List in recognition of the significant improvements on enforcement and other actions taken during the past year. Hungary has taken proactive steps to address the growing threat of Internet piracy, and its customs and police officials have developed their ability to effectively identify infringing products. Through effective and consistent enforcement actions, Hungary has closed its notorious Verseny street market, which was home to an array of illegitimate products. Furthermore, Hungary has taken effective measures to protect IPR, including numerous public awareness-raising campaigns, and training and educational seminars for police, prosecutors, and judges. The United States will continue to monitor Hungarys progress to ensure that IPR protection and enforcement improvements are ongoing.
  • Poland-Poland is being removed from the Special 301 Watch list in recognition of a significant reduction in the availability of pirated and counterfeit goods at border markets, increased and improved enforcement efforts, and strong cooperation between rights holders and enforcement officials. The government has also taken initial steps to address Internet piracy concerns. The United States will continue to monitor Polands progress to ensure that IPR protection and enforcement improvements are ongoing.

USTR also announced that it will conduct Out-of-Cycle Reviews for the Philippines and Thailand to monitor progress on specific IPR issues, which will allow us to deepen our IPR dialogue and cooperation with two key trading partners.  


BACKGROUND  


USTR reviewed 77 trading partners for this years Special 301 Report, and placed 41 countries on the Priority Watch List, Watch List, or the Section 306 monitoring list.  


The Special 301 designations and actions announced in the Special 301 Report are the result of close consultations with affected stakeholders, interested parties, foreign governments, and Congress, as well as discussions between interested federal agencies.  


This year USTR enhanced its public engagement activities, which yielded 571 written comments from interested parties, a significant increase from 2009. USTR made the submissions it received available to the public online at www.regulations.gov, docket number USTR-2010-0003. In addition, on March 3, 2010, USTR conducted a public hearing to let interested persons inform the interagency Special 301 Subcommittee of issues relevant to the review. The hearing included testimony from 23 witnesses, ranging from foreign governments to industry representatives to non-governmental organizations. A transcript of the hearing is available at http://www.ustr.gov/webfm_send/1726.  


Trading partners on the Priority Watch List do not provide an adequate level of IPR protection or enforcement, or market access for persons relying on intellectual property protection. China, Russia, Algeria, Argentina, Canada, Chile, India, Indonesia, Pakistan, Thailand, and Venezuela are on the Priority Watch List. These countries will be the subject of particularly intense engagement through bilateral discussion during the coming year.  


Twenty-nine trading partners are on the lower-level Watch List, meriting bilateral attention to address underlying IPR problems: Belarus, Bolivia, Brazil, Brunei, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, Romania, Spain, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam.  


Paraguay will continue to be subject to Section 306 monitoring under a bilateral Memorandum of Understanding that establishes objectives and actions for addressing IPR concerns in that country.  


Our process of broad consultations is designed to ensure that Special 301 decisions are based on a robust understanding of often complex intellectual property issues and to help facilitate sound, well-balanced assessments of developments in particular countries. USTR necessarily conducts this assessment on a case-by-case basis, based on the particular facts and circumstances that shape IPR protection and enforcement regimes in specific countries. As discussed in the Report, USTR will continue to work closely with the governments of listed countries.