The Annual "2007 special 301 report" was released by the United States Trade Representative (USTR) on the 30th April 2007. This report was the result of a review of the sufficiency and effectiveness of intellectual property (IP) rights protection and enforcement in approximately 79 countries.
This report is produced and published annually based on the provisions of the US Trade Act of 1974, as amended, which requires the USTR to identify foreign countries that deny adequate and effective protection of intellectual property rights or fair and equitable market access for US persons that rely on intellectual property protection. Practicably, this means that US companies or individuals are encouraged or discouraged to invest in a particular country.
The USTR designates 43 countries in this year's Special 301 Report in the categories of Priority Watch List, Watch List and/or Section 306 monitoring status. Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement or market access for persons relying on intellectual property. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas. Additionally, under Section 306, USTR monitors a country's compliance with bilateral intellectual property agreements that are the basis for resolving an investigation under Section 301. USTR may apply sanctions if a country fails to satisfactorily implement an agreement.
The report stressed the importance of the Free Trade Agreements (FTA) that have been signed by the United States with its trading partners which contain intellectual property chapters that establish strong protection for copyrights, patents, and trademarks as well as rules for enforcement. Free Trade Agreements concluded recently include Bahrain FTA, Oman FTA & Morocco FTA. Also, the United States has used an increasing number of Trade and Investment Framework Agreement (TIFA) negotiations to enhance intellectual property protection and enforcement in the Middle East.
The following is a summary of the published highlighting the findings of some Middle East countries:
Priority Watch List
The following countries were listed:
Argentina, Chile, China, Egypt, India, Israel, Lebanon, Russia, Thailand, Turkey, Ukraine, and Venezuela. The reasons for listing each country are stated in the report.
In addition to China & Russia, which remain a top intellectual property enforcement and TRIPS compliance priority for the United Sates, the Special 301 Reports sets out significant concerns with respect to such trading partners as Egypt, Lebanon & Turkey.
The report notes that the United States will consider all options, including, but not limited to, initiation of dispute settlement consultations in cases where countries do not appear to have implemented fully their obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). In addition, the USTR continues to focus on other critically important issues, including Internet piracy, counterfeit pharmaceuticals and transshipment of pirated and counterfeit goods amongst many other things.
The USTR will continue to review IPR practices in countries such as Lebanon under ongoing Generalized System of Preferences (GSP) Review.
Egypt is placed on the Priority Watch List in 2007. Although the USTR recognises Egypt's efforts to improve IP protection and enforcement by modernising its infrastructure and training key personnel such as judges and civil inspectors, the USTR is concerned about the continuing deficiencies in Egypt's IPR enforcement regime, problems with its judicial system, a backlog of pending patent applications, the lack of protection against unfair commercial use of data generated to obtain marketing approval, and the lack of an effective coordination system between its health and patent authorities to prevent the issuance of marketing approvals for patent infringing pharmaceuticals.
Lebanon was commended for the setting up of an IPR task force against copyright piracy. However, the USTR is concerned about Lebanon's inadequate IPR protection, cable piracy, unfair commercial use of data generated to obtain marketing approval, retail piracy of copyrighted works.
Turkey is placed on the Priority Watch list in 2007. Although USTR recognized the progress Turkey made on copyright enforcement, including an increased number of raids against copyright pirates and seizures of pirated goods, impositions of stronger penalties by the courts, and cooperation between law enforcement authorities and the private industry, it wants Turkey to strengthen protection against unfair commercial use of pharmaceutical data generated to obtain marketing approval, continue to address copyright piracy, including book piracy, business software piracy in the private sector, and government use of legal software, as well as increase judicial efficiency and reduce backlogs of court cases by allocating sufficient resources to the Judiciary.
Watch List
The following countries were listed: Belarus, Belize, Bolivia, Brazil, Canada, Ecuador, Hungary, Indonesia, Italy, Jamaica, Kuwait, Lithuania, Malaysia, Mexico, Pakistan, Philippines, Poland, Romania, Saudi Arabia, Taiwan, Tajikistan, Turkmenistan, Uzbekistan & Vietnam.
Although Kuwait was commended for recent government efforts to take enforcement actions against IPR piracy and counterfeiting, including sustained raids on an ex officio basis against retail outlets, street vendors, and pirate cable operators, with subsequent referrals of criminal cases for prosecutions, the USTR wants Kuwait to continue to improve its IPR regime by issuing sentencing guidelines with strong penalties to encourage judicial authorities to impose deterrent penalties for IPR violations and that it ratifies and implements the WIPO Internet Treaties. The USTR is concerned that several key IPR legislations have been pending for many years, and hopes that Kuwait will expeditiously enact and implement these legislations. The United States will continue to address these issues under the United States - Kuwait Trade and Investment Framework Agreement.
As far as Saudi Arabia is concerned, the United States has been monitoring Saudi Arabia's progress on IPR issues since its accession to the WTO in 2005. While progress has been notable in several areas, including an increased number of IPR raids and a strengthening of IPR legal regime through IPR amendments in connection with its WTO accession, Saudi Arabia should complete several IPR actions that it has initiated e.g. increase transparency of its IPR enforcement regime including its judicial system, continue sustained raids and inspections to combat piracy and counterfeiting, ensure that courts impose deterrent sentences (including jail terms for serious offenses) against criminal IPR infringers, improve border enforcement measures. The United States will work closely with Saudi Arabia to address the numerous outstanding IPR issues during the coming year.
Section 306
USTR identified Paraguay as a Priority Foreign Country in January 1998 as part of a Special 301 Out-of-Cycle Review.
The report states that Paraguay has made efforts to improve the protection of intellectual property, particularly by increasing the number of raids and seizures of pirated and counterfeit goods. Paraguay continues, however, to have problems providing effective IPR protection due to porous borders, ineffective prosecutions for IPR infringements, and the lack of consistent deterrent sentences, including imprisonment, in court cases.
Others
Other countries were reviewed for transshipment and transit of goods but not placed on the Watch List. The report states that the transshipped goods and in transit goods enter the customs territory of a country intended to be sent to another destination, such goods are sometimes diverted for consumption in the customs territory through which they are shipped. The report urges these countries to establish stronger border enforcement of intellectual property rights to stop this practice.
In this years' review, USTR devotes special attention to the need for significantly improved enforcement against counterfeiting and piracy. In addition, USTR continues to focus on other critically important issues including Internet piracy, counterfeit pharmaceuticals, transshipment of pirated and counterfeit goods, requiring authorised use of legal software by government ministries, proper implementation of the TRIPS agreement by developed and developing countries.
By Hoda Barakat
© Al Tamimi & Company 2007
