China Remains High on USTR IP Priority Watch List, Saudi Arabia Upgraded
The Office of the U.S. Trade Representative included China for the 15th straight year on its priority watch list for intellectual property violations. USTR also elevated Saudi Arabia from the second-tier watch list and downgraded Canada and Colombia from priority to watch, in the annual special 301 report Thursday (see 1902080063).
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USTR said there’s an “urgent need” for China to make fundamental structural IP enforcement and protection changes. It cited “trade secret theft, online piracy and counterfeiting, the high volume manufacture and export of counterfeit goods, and impediments to pharmaceutical innovation.”
China’s No. 3 e-commerce website Pinduoduo.com was added to notorious markets list, which targets markets that facilitate, ignore or benefit from copyright piracy and trademark counterfeiting. China’s largest e-commerce site, Alibaba Group’s taobao.com, was already on the notorious list.
Placed on the watch list in 2018, Saudi Arabia was elevated to priority for continued “deterioration” of IP protection “for innovative pharmaceutical products” and domestic concerns “regarding enforcement against counterfeit and pirated goods.” USTR cited “rampant” satellite and online piracy and stakeholders having difficulty getting status updates on enforcement and investigations.
Officials plan to craft action plans for longstanding offenders (see 1904250021). They said they could bring Section 301 enforcement -- such as the tariffs on Chinese goods levied this year -- or bring cases at the World Trade Organization.
Despite progress, global IP laws “remain under-developed,” which denies U.S. industry “a return of fair value,” said U.S. Chamber Senior Vice President-Global Innovation Policy Center Patrick Kilbride Thursday. He cited lack of enforcement to protect rightsholders, misuse of competition enforcement, price controls and compulsory licenses. The chamber included China and Canada as countries to monitor.
In Canada’s downgrade from the priority list, USTR cited IP commitments in the U.S.-Mexico-Canada Agreement. It listed: “enforcement against counterfeits, inspection of goods in transit, transparency with respect to new geographical indications, national treatment, and copyright term.”
The office cited “meaningful progress” from Colombia in its downgrade from the priority list. That included enactment of 2018 copyright revision legislation related to U.S.-Colombia Trade Promotion Agreement obligations. Colombia also took steps to “clarify and resolve concerns about Articles 70 and 72” of the National Development Plan, the report said.
Paraguay returned to the watch list, four years after removal. Paraguay is failing to live up to commitments in its 2015 IP memorandum of understanding with the U.S., USTR said. Those failures include: “adopting and enforcing penalties such as imprisonment and monetary fines sufficient to deter future acts of infringement, establishing an interagency ‘Coordination Center’ to provide a unified government response to IP violations, and ensuring that government institutions use computer software with a corresponding license.”
Tajikistan was removed from the watch list. The Central Asian nation mandated ex officio authority for customs officials and issued a presidential decree to facilitate the “use of licensed software in government agencies.” USTR cited those positive developments.