Executive summary:
A top trade priority for the Administration is
to use all possible sources of leverage to encourage other countries to open
their markets to U.S. exports of goods and services and provide adequate and
effective protection and enforcement of U.S. intellectual property (IP) rights.
Toward this end, a key objective of the Administration’s trade policy is
ensuring that U.S. owners of IP have a full and fair opportunity to use and
profit from their IP around the globe.
The Special 301 Report (Report) is the result
of an annual review of the state of IP protection and enforcement in U.S.
trading partners around the world, which the Office of the United States Trade
Representative (USTR) conducts pursuant to Section 182 of the Trade Act of
1974, as amended by the Omnibus Trade and Competitiveness Act of 1988, the
Uruguay Round Agreements Act, and the Trade Facilitation and Trade Enforcement
Act of 2015 (19 U.S.C. § 2242).
The Report reflects the resolve of this
Administration to call out foreign countries and expose the laws, policies, and
practices that fail to provide adequate and effective IP protection and
enforcement for U.S. inventors, creators, brands, manufacturers, and service
providers. The identification of the countries and IP-related market access
barriers in this Report and of steps necessary to address those barriers are a
critical component of the Administration’s aggressive efforts to defend
Americans from harmful IP-related trade barriers.
The Report identifies foreign trading partners
where IP protection and enforcement has deteriorated or remained at inadequate
levels and where U.S. persons who rely on IP protection have difficulty with
fair and equitable market access. For example:
• USTR continues to place China on the Priority Watch List (and, as
before, Section 306 monitoring remains in effect). China’s placement on the
Priority Watch list reflects the urgent need to remediate a range of IP-related
concerns, including as to trade secret theft, online piracy and counterfeiting,
the high-volume manufacture and export of counterfeit goods, technology
transfer requirements imposed as a condition to access the Chinese market, the
mandatory application of adverse terms to foreign IP licensors, and IP ownership
and research and development localization requirements. Structural impediments
to administrative, civil, and criminal IP enforcement are also problematic, as
are impediments to pharmaceutical innovation.
• USTR identifies India
on the Priority Watch List for lack of sufficient measurable improvements to
its IP framework on longstanding and new challenges that have negatively
affected U.S. right holders over the past year. Longstanding IP challenges
facing U.S. businesses in India include those which make it difficult for
innovators to receive and maintain patents in India, particularly for
pharmaceuticals, enforcement action and policies that are insufficient to curb
the problem, copyright policies that do not properly incentivize the creation
and commercialization of content, and an outdated and insufficient trade
secrets legal framework. New and growing concerns, including with respect to
reductions in transparency by India’s pharmaceutical regulator through the
removal of a requirement that applicants submit information about a product’s
patent status, as well as positions that India supports and voices in
multilateral fora on IP issues, continue to 6 generate skepticism about whether
India is serious about pursuing pro-innovation and - creativity growth
policies.
• USTR identifies Indonesia
on the Priority Watch List due to the lack of adequate and effective IP
protection and enforcement. For example, revisions to Indonesia’s patent law
have raised serious concerns, including with respect to patentability criteria
and local manufacturing and use requirements.
• USTR identifies Colombia
on the Priority Watch List with an Out-of-Cycle Review focused on certain
provisions of the United States-Colombia Trade Promotion Agreement (CTPA) and
monitoring the implementation of Colombia’s National Development Plan. In 2017,
USTR conducted an Out-of-Cycle Review of Colombia focused on certain provisions
of the CTPA and monitoring the implementation of Colombia’s National
Development Plan. Colombia’s lack of meaningful progress warrants its elevation
to the Priority Watch List. In 2018, Colombia will be subject to an
Out-of-Cycle Review on the same issues to determine whether a change in status
to Watch List is warranted.
• The Report also highlights trading partners
such as Chile
that have not delivered on IP commitments made to the United States.
The Report also identifies significant
cross-cutting IP issues with regard to adequate and effective IP protection and
enforcement worldwide. For example:
• USTR has been engaging with trading partners,
including Algeria, Argentina, Canada, China, Korea, India, Indonesia, Japan,
Malaysia, Saudi Arabia, and the United Arab Emirates (UAE), to address concerns
related to IP protection and enforcement and market access barriers with
respect to pharmaceuticals
and medical devices so that trading partners contribute their fair
share to research and development of new treatments and cures.
• In virtually all countries identified in this
Report, IP enforcement
is lacking. Many of the listed trading partners, including Canada, Egypt,
Indonesia, Mexico, Turkey, Turkmenistan, UAE, and Uzbekistan, do not provide
adequate or effective border enforcement against counterfeit and pirated goods;
in addition, many listed countries’ customs officials lack authority to take ex
officio action to seize and destroy such goods at the border or to take such
action for goods in-transit.
• Several countries, including China, Mexico,
Russia, Ukraine and Vietnam, have not addressed the continuing and emerging
challenges of copyright
piracy. Countries such as Argentina, Greece, Tajikistan,
Turkmenistan, Uzbekistan, and Venezuela do not have in place effective policies
and procedures to ensure their own government agencies do not use unlicensed
software.
• Online piracy remains a challenging copyright enforcement
issue in many trading partner markets, including Canada, China, India, the
Netherlands, Romania, Russia, Switzerland, Taiwan, Ukraine, and elsewhere.
• U.S. innovators face challenges including restrictive patentability
criteria that undermine opportunities for export growth in countries
such as Argentina, India, and Indonesia. Innovators also face—for example in
Argentina, China, India, Indonesia, Saudi Arabia, Thailand, and Russia—a lack
of adequate and effective protection for regulatory test or other data
submitted by pharmaceutical and agricultural chemical producers.
• Inadequate protection for trade secrets in a number of countries,
notably in China and India, also puts U.S. trade secrets at unnecessary risk.
• The Report highlights negative market access
effects of the approach of the European Union (EU) to the protection of geographical indications
(GIs) in the EU and third-country markets on U.S. producers and traders,
particularly those with prior trademark rights or who rely on the use of common
names.
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