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China and Russia still very special - April 25, 2008

China and Russia once again top the charts in the annual listing of countries deemed to have inadequate or ineffective enforcement of intellectual property rights by the Office of the U.S. Trade Representative released Friday, on the eve of World Intellectual Property Day. The two former pillars of the International Communist Conspiracy held onto their spots on the USTR's Priority Watch list for the third straight year, singling them out for heightened IP scrutiny under bilateral trade agreements with the U.S., and potentially subjecting them to sanctions if they fail to address U.S. trade officials' concerns.

Joining China and Russia on the worst-of-the-worst list this year are Argentina, Chile, India, Israel, Pakistan, Thailand and Venezuela.

The list is published each year as part of the USTR's Special 301 Report, named for the section of U.S. trade law that created the process.

In addition to the nine countries on the Priority Watch list, the report lists 30 countries on the lower-level Watch List, among them Canada, Mexico, Korea, Taiwan and Saudi Arabia.

"We continue to work with our Chinese and Russian colleagues to ensure that they deliver on their commitments to improve intellectual property protection and enforcement," USTR Susan Schwab said in a statement accompanying the release. "Our bilateral engagement with China and Russia and other trading partners complement our efforts to enforce our rights through the [World Trade Organization]. The Administration will continue to defend vigorously American innovation."

Prompted in part by the urging of the entertainment industry, The U.S. filed a formal complaint with the WTO last year against China over its alleged failure to take more aggressive steps to protect U.S. intellectual property. In a conference call with reporters Friday, assistant USTR for intellectual property and innovation Stan McCoy said a decision from the trade body could be reached by the fall.

This year's report took special note of Internet piracy in other countries, citing Canada, China, Sweden, Spain and Russia as particularly egregious offenders.

Also getting attention was piracy involving new storage and display technologies, such as mobile phones, palm devices, flash drives and other portable media. Countries cited as having "significant problem of piracy using new technologies," included China, India, Indonesia and Malaysia.

Regular readers of Media Wonk will appreciate the following section, on IP rights and interoperability in Europe, which I reproduce here in full:

During recent years, a number of countries, mostly in Western Europe, have devoted increasing attention to the relationship between intellectual property rights, digital rights management technologies, and interoperability of consumer products and other devices. This emerging set of issues represents potential new challenges in the area of effective protection of IPR. In France, for example, copyright legislation enacted in August 2006 contains provisions enabling a government entity to mandate the disclosure of IP-protected digital rights management information in the interest of promoting interoperability. The United States has expressed concern that this legislation may, depending on its implementation, impinge upon IPR of both the creators of the digital rights management technologies and of creative works protected by those technologies. Similar approaches reportedly are being considered in other European countries, including Belgium, Germany, Norway, and Sweden. In addition, these issues are receiving attention within the European Commission. In some cases, consumer protection laws and regulatory authorities have been engaged to pursue interoperability at the potential expense of IP right holders. This complex intersection of issues will continue to receive U.S. policy attention in the coming year.

There was some good news to report, according to the report. For instance, "Russia has increased penalties for copyright crimes and stepped up action against unlicensed optical disc plants." China and Australia also "joined the two key World Intellectual Property Organization treaties for copyright protection."

In the U.S., Copyright Alliance executive director Patrick Ross praised the report. “Enforcing the intellectual property rights of creators – large and small – on a global scale is daunting but is also critical for a strong and vibrant U.S. economy," Ross said in a statement.

Added Eric H. Smith of the International Intellectual Property Alliance, "Special 301 is an important tool by which the U.S. government has been able to secure improved protection and enforcement in our key markets around the world. This success has been due to the hard work of U.S. government agencies, led by the USTR, to implement Congress’ mandate to effect real improvement in copyright protection and enforcement and fair and equitable market access for the copyright industries."

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