USTR Publishes 2011 National Trade Estimate Report on Foreign Trade Barriers

USTR today published the NTE Report, which describes barriers to trade in 60 nations, the European Union, and the Arab League. The report contains (very brief) descriptions of the IP landscape in each of the countries covered, and often notes “concerns” about perceived weakness in enforcement. The introduction describes the report as a statutorily required “inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons, and protection of intellectual property rights.”

Click here for the complete 2011 National Trade Estimate Report on Foreign Trade Barriers.

Excerpts from the report follow:

ANGOLA

Angola is a party to the World Intellectual Property Organization (WIPO) Convention, the Paris Convention for the Protection of Industrial Property, and the WIPO Patent Cooperation Treaty. Intellectual property is protected by Law 3/92 for industrial property and Law 4/90 for the attribution and protection of copyrights. Intellectual property rights are administered by the Ministry of Industry (trademarks, patents, and designs) and by the Ministry of Culture (authorship, literary, and artistic rights).

Although Angolan law provides basic protection for intellectual property rights and the National Assembly is working to strengthen existing legislation, IPR protection remains weak in practice due to a lack of enforcement capacity. However, government officials have made efforts to confiscate and destroy pirated goods. On September 18, 2008 Angola‘s Economic Police burned 2.5 tons of counterfeited medicines, and pirated CDs and DVDs in a public event aimed at curbing the sales of pirated merchandise in Angola. According to Angola‘s National Department for the Protection of Intellectual Property Rights, the owners of the pirated goods were sentenced to up to six months in jail or fined approximately 110,000 Kwanza (approximately $1,500). However, there are no reports of the authorities’ conducting similar destructions of pirated material in 2009 or 2010. The government has also worked with international computer companies on anti-piracy measures. No suits involving U.S. intellectual property are known to have been filed in Angola.

ARGENTINA

Argentina was listed on the Priority Watch List in the 2010 Special 301 report. Key concerns cited in the report relate to the need to strengthen IPR enforcement to combat the widespread availability of pirated and counterfeit products. Although cooperation continues between Argentina‘s enforcement authorities and U.S. industry, stronger IPR enforcement actions to combat the widespread availability of pirated and counterfeit products are needed. Problems persist in the civil and criminal enforcement areas, including civil damages that have not proven to be a deterrent to piracy and counterfeiting. In criminal cases, delays in the adjudication of IPR infringement cases are common, and there is a reluctance to impose stronger penalties, such as ncarceration, for repeated and/or serious violations. Argentina also ontinues to face a backlog of patent applications and does not provide adequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. In addition, Argentina lacks an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products.

AUSTRALIA

Australia generally provides for strong IPR protection and enforcement. It has legislation criminalizing copyright piracy and trademark counterfeiting. Penalties (including imprisonment) can be combined with confiscation of roceeds of the crime, the infringing goods, and the equipment used to make those goods. The Australian Notice of Objection Scheme provides Customs with the power to seize imported goods which infringe notified trademarks and copyright.

IPR rights holders can also prevent the importation and exportation of infringing products through court injunctions. Under the FTA, Australia must notify the holder of a pharmaceutical patent of a request for marketing approval by a third party for a product claimed by that patent. However, U.S. and Australian pharmaceutical industry representatives have raised concerns that unnecessary delays in this notification process restrict their options for action against third parties that would infringe their patents if granted marketing approval by the Australian Therapeutic Goods Administration.

Australia was an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist the parties to the agreement in their efforts to effectively combat IPR infringement, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade.

BAHRAIN

In the FTA, Bahrain committed to provide strong IPR protection and enforcement. Bahrain has launched public awareness campaigns that equate IP piracy with theft to combat television satellite cable piracy. In October 2009, the Telecommunication Regulatory Authority (TRA) blocked all the IP addresses used in cable piracy and the Ministry of Industry and Commerce banned the sale of decoding devices.

In order to implement its FTA obligations, Bahrain passed several key pieces of IPR legislation. These laws improve protection and enforcement in the areas of copyrights, trademarks, and patents. Implementing regulations supporting these laws have also been enacted. Bahrain joined the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty in December 2005.

As part of the GCC Customs Union, the six Member States are preparing a draft common trademark law, as well as a draft common unfair competition law to protect companies from unfair commercial use of undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to help ensure that the trademark law and unfair competition law will facilitate Member States‘ implementation of international and bilateral obligations.

BOLIVIA

Bolivia was listed on the Watch List in the 2010 Special 301 report. Key concerns cited in the report relate to rampant piracy and counterfeiting, including counterfeiting of medicines, that persist in Bolivia. The report noted a need for significant improvements to the Bolivian IPR regime, including with respect to the Bolivian copyright law. Despite one notable pharmaceutical-related success, the report noted that substantial additional resources and a greater commitment by enforcement and judicial authorities were necessary to improve enforcement actions against piracy and counterfeiting.

BRAZIL

Brazil was listed on the Watch List in the 2010 Special 301 report. While Brazil has continued to make important progress in enhancing the effectiveness of intellectual property enforcement, particularly with respect to pirated audiovisual goods, some areas of IPR protection and enforcement continue to represent barriers to U.S. exports and investment. Key issues cited in the report include concerns regarding IPR enforcement, including the need to increase raids and seizures of pirated and counterfeit products and to increase actions against book and Internet piracy. Concerns also remain with respect to border enforcement and the lack of expeditious and deterrent sentences. The United States has also raised concerns regarding long delays in receiving patent protection for new innovations in the patent application process, and inadequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for human-use pharmaceutical products. In January 2011, the Federal Attorney General reissued an opinion that the Brazilian Ministry of Health‘s National Health Vigilance Agency (ANVISA) does not have the authority to review patentability requirements when analyzing pharmaceutical patent applications. The United States will continue to monitor how the Attorney General decision is implemented by ANVISA and any changes affecting patent processing in Brazil.

BRUNEI

Brunei was listed on the Watch List in the 2010 Special 301 report. While Brunei has made notable progress on enforcement in 2009, including coordinated efforts to remove pirated music from stores and some improvements in prosecuting IPR infringers, there are areas of IPR protection and enforcement that continue to represent barriers to U.S. exports and investment. Key issues cited in the report include high copyright piracy rates, including the open sale of pirated goods, such as optical discs and unlicensed software in retail stores, and inadequate deterrent penalties for those convicted. The United States also continues to urge Brunei to pass long pending legislation to amend its copyright law.

CAMBODIA

While Cambodia has made progress in implementing the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), there are areas of IPR protection and enforcement that continue to represent barriers to U.S. exports and investment. Specifically, Cambodia‘s IPR enforcement has been ineffective at addressing continued widespread copyright piracy and trademark counterfeiting. Pirated CDs, videos, software, and other copyrighted materials as well as a vast array of counterfeit goods, including counterfeit pharmaceuticals, are widely available in Cambodia‘s markets. Additionally, while the 1996 United States-Cambodia Bilateral Trade Agreement contained a broad range of IPR commitments that were to be phased in, Cambodia has not yet enacted legislation regarding, for example, protection of encrypted satellite signals or for semiconductor layout designs. Work also remains ongoing on draft legislation to implement commitments with respect to the protection of trade secrets. The lack of strong laws on unfair competition and franchising also hamper civil enforcement efforts to protect IPR.

CANADA

Canada was listed on the Priority Watch List in the 2010 Special 301 report. Concerns listed in the report relate to Canada‘s failure to implement key copyright reforms, its weak border enforcement system, and its failure to implement the World Intellectual Property Organization Internet Treaties, which Canada signed in 1997. The United States continues to urge Canada to enact legislation to strengthen its copyright laws and implement these treaties.

The United States also urges Canada to enact legislation to give customs officers the authority, without the need for a court order, to seize products suspected of being pirated or counterfeit. Canada‘s IPR enforcement regime would also benefit from the provision of increased resources and training to customs officers and domestic law enforcement personnel. Canada and the United States are working together on enhanced training.

In addition, the U.S. pharmaceutical industry has expressed concerns related to Canada‘s 2010 pharmaceutical pricing guidelines, specifically with respect to the regulatory burden placed on pharmaceutical manufacturers.

Canada has been an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist Parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

CHILE

Chile was listed on the Priority Watch List in the 2010 Special 301 Report. Although the report noted positive steps taken by the Chilean government in 2009 and early 2010, including the creation of the National Institute for Industrial Property to oversee industrial property registration and protection, the United States continues to have concerns regarding the implementation of Chile‘s IPR commitments under the FTA. In May 2010, the Chilean government implemented a new intellectual property law, which includes language amending its copyright law. However, the legislation falls short of fully addressing Chile‘s commitments. For example, the legislation does not include protections against the circumvention of technological protection measures.

Key concerns highlighted in the report also included inadequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products, as well as the lack of an effective system to address patent issues expeditiously in connection with applications to market pharmaceutical products. The report also noted the need to enact legislation to ratify the 1991 Act of the International Convention for the Protection of New Varieties of Plants and the Trademark Law Treaty. The Chilean Congress ratified the Trademark Law Treaty in September 2010, but implementation is still pending. In addition, the rate of prosecutions and the tendency to apply minimum sentences for counterfeiting and piracy remain a concern, as they may not effectively deter future infringement.

The Chilean government is making an effort to promote publicly the value of protecting IPR, emphasizing the benefits this can bring to innovation, investment, and economic growth. In 2010, the United States and Chile held several meetings to exchange information and review implementation of the IPR provisions of the FTA IPR Chapter.

CHINA

China was listed on the Priority Watch List in the 2010 Special 301 report. Persistent inadequacies in the protection and enforcement of IPR represent barriers to U.S. exports and investment. Key concerns listed in the report included unacceptable levels of retail and wholesale counterfeiting, as well as persistently high-levels of book and journal piracy, end-user piracy of business software and copyright piracy over the Internet. The report describes these enforcement-related concerns and summarizes the legal difficulties rights holders face when attempting to assert their IPR rights in China. The lack of deterrent penalties and other policies, such as barriers to the market for legitimate products, contribute to the poor record on reducing IPR crime in China.
The report also recognizes industry concerns about the possibility that laws or policies in a variety of fields might be used to unfairly favor domestic intellectual property (IP) over foreign IP, including procurement preferences for products with domestically developed IP and the treatment of IPR in setting standards.

With respect to copyright piracy and trademark counterfeiting, weaknesses in China‘s enforcement system – criminal, civil and administrative – contribute to China‘s poor IPR enforcement record. There are also a number of other obstacles to effective enforcement. High value and volume thresholds must be met in order to initiate criminal prosecution of IPR infringement. U.S. trademark and copyright industries also report that administrative fines are too low, and imposed too infrequently, to be a deterrent. Consequently, infringers view administrative seizures and fines merely as a cost of doing business. Civil damages for infringement are likewise inadequate.

The United States sought to resolve specific concerns about China‘s high legal thresholds for criminal enforcement, along with other concerns regarding weaknesses in China‘s laws concerning border enforcement and the denial of copyright protection and enforcement to creative works that are awaiting or have not received Chinese censorship approval. When bilateral attempts to address these concerns did not succeed, the United States requested WTO dispute settlement consultations in April 2007, and the WTO panel composed to hear the case circulated its decision in January 2009, finding for the United States on two out of three claims, and clarifying important legal principles related to the third claim. China did not appeal the panel‘s rulings and subsequently modified the measures at issue, effective March 2010.

An exacerbating factor contributing to China‘s poor IPR protection has been China‘s maintenance of restrictions on the right to import and distribute legitimate copyright-intensive products, such as theatrical films, DVDs, music, books, newspapers and journals. These restrictions impose burdens on legitimate, IPR-protected goods and delay their introduction into the market. These burdens and delays faced by legitimate products create advantages for infringing products and help to ensure that those infringing products continue to dominate markets within China. As discussed above in the sections on Trading Rights and Distribution Services, the United States challenged these restrictions in a WTO dispute filed in April 2007. A WTO panel ruled in favor of the United States on all significant issues in August 2009, and the WTO‘s Appellate Body rejected China‘s subsequent appeal on all counts in December 2009. China subsequently agreed to comply with these rulings by March 2011.

On October 1, 2009, the Third Amendment to China‘s Patent Law, passed in December 2008, went into effect. While many areas of the Patent Law were clarified and improved, rights holders have raised a number of concerns about the new law and its implementing regulations, including concerns about disclosure requirements for genetic resources, inventor remuneration and the scope of, and procedures related to, compulsory licensing, among other matters. The United States will be closely following implementation of these measures in 2011.

The United States and China continued to engage in bilateral efforts to address a variety of IPR issues. JCCT IPR Working Group meetings held in April and November 2010 allowed for constructive dialogue on the intellectual property regimes of both countries. Subsequently, at the December 2010 JCCT meeting, the United States secured a series of commitments from China that will have systemic consequences for the protection of IPR in China. In addition to announcing a six-month campaign to step up enforcement against a range of IPR infringements, China agreed to expand and enhance its software legalization program, to take steps to eradicate the piracy of electronic journals, to work intensively toward adopting more effective rules for addressing Internet piracy and to crack down on landlords who rent space to counterfeiters.

Meanwhile, a troubling trend that emerged more conspicuously in 2009, and continued in 2010, was
China‘s willingness to encourage domestic or ?indigenous? innovation at the cost of foreign innovation and technologies. One example, discussed below in the Government Procurement section, involves the Circular Launching the 2009 National Indigenous Innovation Product Accreditation Work, which aimed to improve ?indigenous? innovation in computer and other technology equipment by imposing qualifying criteria for government procurement preferences such as the ownership or development of a product‘s intellectual property in China.

Another example of problematic Chinese indigenous innovation policies is the draft Regulations for the Administration of the Formulation and Revision of Patent-Involving National Standards, which the Standardization Administration of China (SAC) released for public comment in November 2009. These proposed regulations generated concerns because of their expansive scope, questions about the feasibility of certain patent disclosure requirements and the undermining of IP rights through possible compulsory licensing of essential patents included in national standards. If adopted in their current form, these regulations may have the unintended effect of undermining incentives for innovation and, by discouraging rights holders from participating in the development of standards in China, depriving the standards-setting process of potentially superior technology. The United States provided comments to SAC on the proposed regulations and requested that SAC not move forward with the finalization of the regulations and instead consult with stakeholders. SAC reportedly received comments from 300 other interested parties as well. A draft measure with similar provisions was issued by the China National Institute for Standards (CNIS) in February 2010, and the United States subsequently provided comments to CNIS. Throughout 2010, the United States also raised its concerns in meetings with China‘s regulators, and as of December 2010 neither SAC nor CNIS had moved forward to finalize their draft measures.

COLOMBIA

Colombia was listed on the Watch List in the 2010 Special 301 Report. Colombia continued to improve its efforts against IPR violators through enforcement action. However, there remains a need for further IPR improvements, particularly the need for additional training and resources for agencies involved in enforcing IPR. A key concern cited is the lack of deterrent sentences. Actions are still needed to reduce book and optical media piracy, combat Internet piracy, and to address the need for an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products. While improvements in enforcement remain necessary, the Colombian government has made a concerted effort in recent years to combat IPR violations, including through conducting raids to seize counterfeit and pirated products and deter the counterfeiting of pharmaceuticals.

COSTA RICA

Costa Rica was again listed on the Watch List in the 2010 Special 301 report. Recent improvements include passage of legislation to strengthen IPR protection and enforcement in Costa Rica, and the publication of regulations to provide for the protection of undisclosed information submitted in support of the registration of new agricultural chemical products. Key concerns cited in the report included the need to assign higher priority to, and allocate greater resources for, combating piracy and counterfeiting, and the need to seek deterrent penalties. Additionally, strengthened enforcement efforts are needed.

During 2010, the U.S. Government continued to address these concerns with the Costa Rican government by providing IPR training both to members of the judiciary and staff of the National Property Registry and by continuing an IPR dialogue through the Judicial Branch‘s training department (?The Judicial School?).

The United States will continue to monitor Costa Rica‘s implementation of its IPR obligations under the CAFTA-DR.

DOMINICAN REPUBLIC

The Dominican Republic remained on the Watch List in the 2010 Special 301 report. The Dominican Republic continued its efforts to implement its obligations under the CAFTA-DR, including by improving its government use of licensed software and addressing TV broadcast piracy. However, key concerns cited in the report included the widespread availability of pirated goods and excessive delays in the issuance of patents. The United States also will continue to monitor the Dominican Republic‘s implementation of its bilateral and multilateral obligations to provide an effective system for protecting against the unfair commercial use and unauthorized disclosure of undisclosed test or other data generated to obtain marketing approvals for pharmaceutical and agrochemical products. In 2010, the United States provided technical assistance to the Ministry of Public Health in implementing a new system that significantly reduced the pharmaceutical marketing approval processing time.

The United States will continue to monitor the Dominican Republic‘s implementation of its IPR obligations under the CAFTA-DR.

DEMOCRATIC REPUBLIC OF THE CONGO

Although the 2006 Constitution provides for protection of intellectual property rights (IPR), enforcement of IPR is weak. Pirated books, sound recordings, and visual media are readily available. Privately owned television stations in Kinshasa routinely broadcast U.S. films, apparently without securing exhibition rights from the owners. The government is also unable to prevent most pirated goods from being imported into the country, or to prevent their subsequent distribution and sale. However, the government is considering IPR-related legislation that will improve its enforcement capacity. Additionally, DRC officials have participated in several U.S. government-sponsored training programs organized by the U.S. Patent and Trademark Office.

ECUADOR

Ecuador was listed on the Watch List in the 2010 Special 301 Report. Ecuador continued to make progress, as cited in the report, by reducing its backlog of applications to register trademarks and for patent adjudication. However, key concerns remain, including: weak enforcement of intellectual property rights; lack of effective protection against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products; and lack of an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products. Although Ecuador has established special IPR units that conduct investigations and execute seizures of pirated and counterfeit products, overall IPR enforcement in Ecuador remains seriously inadequate, resulting in high piracy levels in the software, publishing, recording, and film industries.

In 2009, President Correa signed two presidential decrees establishing a compulsory license policy for patented pharmaceutical products and agricultural chemical products. On April 14, 2010, Ecuador‘s Intellectual Property Institute (IEPI) granted a compulsory license for a patented drug used in the treatment of HIV/AIDS that is manufactured by a U.S. company. The Ecuadorian company awarded the license has used it to win a government tender to supply imported copies of the patented drug. Two other compulsory license petitions for the same drug were submitted to IEPI; the first petition was never completed, and IEPI is reviewing the other petition, which was filed by the state pharmaceutical company Enfarma. To date, no other compulsory license petitions have been filed with IEPI for either patented pharmaceutical or agricultural chemical products.

EGYPT

Egypt remained on the Watch List in the 2010 Special 301 Report. Egypt undertook positive efforts, including acceding to various international IPR treaties, such as the Patent Cooperation Treaty, the Madrid Protocol, and the Nice Classification Agreement. Egypt also increased enforcement actions and conducted successful public awareness and training campaigns in 2010, including several operations that resulted in the seizure of large amounts of counterfeit goods.

However, piracy and counterfeiting were noted in the Special 301 Report as continuing to be serious problems. Online music piracy has increased, and book and entertainment software piracy remain a concern. The United States continues to urge the Ministry of Health to clarify its commitment to take steps to protect undisclosed test or other data generated to obtain marketing approvals for pharmaceutical products against unfair commercial use and unauthorized disclosure. The United States also continues to seek clarification of the Ministry of Health‘s commitment to provide an effective system to address patent infringement concerns expeditiously in connection with applications to market pharmaceutical products.

EL SALVADOR

To implement its CAFTA-DR IPR obligations, El Salvador undertook legislative reforms providing for stronger IPR protection and enforcement. Despite these efforts, the piracy of optical media, both music and video, in El Salvador remains a concern. In addition, the business software industry continues to report very high piracy rates for El Salvador. Optical media imported from the United States into El Salvador are being used as duplication masters for unauthorized copies of copyrighted works. The United States has expressed concern to the Salvadoran government about inadequate enforcement of cable broadcast rights and the competitive disadvantage it places on legitimate providers of this service.

The United States will continue to monitor El Salvador‘s implementation of its IPR obligations under the CAFTA-DR.

EITHIOPIA

Although Ethiopia has enacted laws regarding copyright and related rights, plant varieties, and trademarks, the Ethiopian Intellectual Property Office (EIPO), which is responsible for all those areas, focuses mainly on protecting Ethiopian copyrighted materials software. EIPO has taken virtually no action to confiscate pirated foreign works in Ethiopia, or to impede the sale of pirated goods. Trademark infringement of major international brands appears to be widespread in Ethiopia.

E.U. AND MEMBER STATES

The EU and its Member States generally provide strong protection for intellectual property rights (IPR). However, U.S. industry has concerns regarding the implementation of key provisions of EU IPR directives and overall IPR protection in some Member States. In recent years, the European Commission issued communications on strengthening the criminal law framework to combat intellectual property infringement and undertook a renewed effort to introduce an EU-wide patent regime. Despite the fact that patent filing costs have decreased in the EU, patent filing and maintenance fees in the EU and its Member States remain significantly higher than in other countries, including the United States.

The United States continues to have concerns about the EU‘s system for the protection of Geographical Indications (GIs), which raises issues of national treatment and adversely impacts trademarks and widely accepted generic terms for food products. The EU adopted its current GI regulation for food products, Council Regulation (EC) 510/06, in response to findings by the WTO Dispute Settlement Body that the EU GI system impermissibly discriminated against non-EU products and persons. The Dispute Settlement Body also agreed with the United States that the EU could not create broad exceptions to trademark rights guaranteed by the TRIPS Agreement. The United States continues to have some concerns about this amended regulation, and intends to monitor carefully current initiatives to modify it. These concerns extend equally to Council Regulation (EC) 479/08, which relates to wines, and to Commission Regulation (EC) 607/09, which relates, inter alia, to GIs and traditional terms of wine sector products, whose implementation the United States is also carefully monitoring.

With respect to the impact of GIs on generic terms, the United States, along with several other interested WTO Members, was given the opportunity to provide input into a number of recently proposed GIs that threatened to undercut the general use of certain generic terms. The resulting approvals, issued in fall 2010, appear to contain provisions intended to preserve the general use of those terms.
The United States will monitor how these GIs are enforced and whether, in fact, the generic terms are preserved. Certain other recently proposed GIs may also provide relevant information on the possible negative impact of EU GIs on generic terms.

The EU and its Member States were active participants in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which concluded in November 2010. When it enters into force, ACTA will establish an international framework that will assist Parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

Member State Measures

The United States continues to have concerns about IPR protection and enforcement in several Member States. The United States actively engages with the relevant authorities in these countries and will continue to monitor the adequacy and effectiveness of IPR protection and enforcement, including through the annual Special 301 review process.

Austria: U.S. copyright holders report that while legal protections are strong in principle, procedural roadblocks prevent copyright holders from blocking online access to pirated works and prevent effective prosecution.

Bulgaria: U.S. industry reports growing IPR concerns, particularly with respect to increased Internet piracy; inefficient cooperation between Bulgarian IPR officials and the private sector; delays and conflicts of interest in enforcing patent protection; and difficulties obtaining information from ISPs in Bulgaria to combat piracy on the Internet.

Czech Republic: The Czech Republic made significant progress in increasing enforcement in the approximately 50 open air markets that line the Czech borders with Germany and Austria and was removed from the Special 301 Watch List in April 2010. Despite this progress, industry remains concerned about the sustainability of these enforcement efforts. Industry is also concerned that the IPR penalties that have been imposed are not sufficient to deter violations.

Finland: Finland was included in the Watch List in the 2010 Special 301 Report. The key concern cited in the report was the lack of product patent protection for certain pharmaceutical products and a regulatory framework that denied adequate protection for some process patents filed before 1995, and those that were pending in 1996. Affected products include many of the top-selling U.S. pharmaceutical products currently on the Finnish market.

Greece: Greece was included in the Watch List in the 2010 Special 301 Report. The United States acknowledges some improvements in IPR enforcement in Greece, including actions taken against Internet piracy. However, inadequate IPR protection continues to pose barriers to U.S. exports and investment. Key issues cited in the 2010 report include weak and inconsistent IPR enforcement and a failure to follow through on initiatives begun in 2008 and 2009, including effective implementation of the National Action Plan on IPR.

Italy: Italy was included in the Watch List in the 2010 Special 301 Report. The United States welcomes signs of the government‘s renewed commitment to tackling IPR issues, especially with respect to Internet piracy, including by ratifying the WIPO Internet Treaties along with the other EU Member States. Other problems related to IPR protection and enforcement continue to represent barriers to U.S. exports and investment, however. Key concerns cited in the 2010 report include continued widespread copyright piracy and trademark counterfeiting, growing online piracy of books and journals, the lack of an expeditious legal mechanism for right holders to address piracy on the Internet, and the imposition of sentences that are inadequate to deter IPR violations.

Latvia: The United States is encouraged by amendments to Latvia‘s intellectual property criminal statutes, which will simplify certain aspects of infringement cases and which may result in more successful prosecutions of IPR violations. Latvia hosts a number of file-sharing websites, however, and while the national police and prosecutors have made efforts to take down these sites, they are hampered by a lack of resources, severe backlogs in police forensics labs, and high legal barriers to prosecution. A U.S. software company has also reported that the government of Latvia has permitted significant unauthorized use of its software products in government offices. The United States has engaged the government of Latvia on this issue, stressing the need to include full software licensing in ministry budgets.

Poland: Poland was removed from the Watch List in the 2010 Special 301 Report. This was in large part due to Poland‘s implementation of its national IPR action plan for 2008-2010, which provided for increased enforcement efforts in German border markets where pirated and counterfeit goods have long been sold with impunity. In 2010, Polish authorities began taking random samples at optical disc manufacturing plants to determine whether violations of intellectual property rights were occurring. Piracy of movies, music, and software on the Internet continues, but there has been progress on enforcement. Rights holders continue to have concerns, however, as penalties for IPR infringement still are not being imposed at levels sufficient to deter violations. The government reports that, to address these concerns, it will implement a new national IPR action plan in 2011, including a nationwide standard platform for enforcing intellectual property laws with an emphasis on equipping prosecutors and judges to better enforce against crimes on the Internet.

Portugal: Although Portugal regularly conducts inspections at fairs, markets, and festivals, which resulted in the seizure of illegal goods in 2008 worth an estimated 6 million Euros, it does not have strong mechanisms to prevent piracy on the Internet. Legal cases involving IPR often take years to resolve, however, and rarely lead to a conviction. Courts rarely order injunctions stopping the activity in question while a case is pending.

Romania: Romania was included in the Watch List in the 2010 Special 301 Report. The United States welcomes positive steps taken in 2009, including increased cooperation between enforcement authorities, such as the National Police and General Prosecutor‘s Office, the use of a national database to improve interagency coordination on enforcement, coordination with rights holders on enforcement matters, and further positive efforts aimed at ensuring the government‘s use of licensed software. Deficiencies in IPR protection and enforcement continue to pose barriers to U.S. exports and investment, however. Key concerns cited in the 2010 report include weaknesses in the prosecution of IPR infringers, judicial inefficiency, and a failure to impose deterrent sentences for IPR violations.

Spain: Spain was included in the Watch List in the 2010 Special 301 Report. The key concerns cited in the report include significant piracy on the Internet, the failure of the existing legal and regulatory framework to promote cooperation between ISPs and right-holders to reduce online piracy, the Spanish government‘s weak efforts to change the widespread misperception that the use of peer-to-peer file sharing systems to share copyright infringing materials is legal, and the general failure of Spain‘s legal system to apply criminal penalties for criminal intellectual property infringement. In early 2011, after a year of deliberations, Spain enacted legislation that established an administrative mechanism for taking down infringing Internet websites and content. Late amendments to the legislation introduced potentially time-consuming judicial review procedures that could limit the new mechanism‘s effectiveness in preventing the circulation of infringing digital materials. The United States will carefully monitor the implementation of this legislation in 2011.

Sweden: Sweden continues to grapple with widespread piracy on the Internet, but government enforcement efforts have begun to show positive results. Following the entry into force in April 2009 of legislation implementing the EU Enforcement Directive, several major pirate websites left Sweden. Nonetheless, Sweden still hosts some of the largest on-line pirate sites in the world. These were listed in USTR‘s publication, Notorious Piracy Markets, issued on February 28 and posted on the USTR website at http://www.ustr.gov/about-us/press-office/press-releases/2011/february/ustr-announces-results-special-301-review-notorio.

GHANA

Ghana is a signatory to the Berne Convention for their Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, the World Intellectual Property Organization (WIPO) Copyright Treaty and the African Regional Industrial Property Organization. Ghana has signed the WIPO Performances and Phonograms Treaty (WPPT), but despite being signed in 1997, it has not been entered into force. This issue has been raised in bilateral consultations, and in November 2010 Ghana‘s Copyright Administrator sent a reminder to the Minister for Foreign Affairs regarding this issue. Since December 2003, Parliament has passed six bills designed to implement Ghana‘s obligations under the TRIPS Agreement. The new laws pertain to copyright, trademarks, patents, layout-designs (topographies) of integrated circuits, geographical indications, and industrial designs.In recent years, IPR owners have filed very few trademark, patent, or copyright infringement cases in local courts. Companies that do initiate cases report prolonged waits for resolution, a possible factor in discouraging other companies from filing cases.

There is virtually no government-initiated enforcement. However the Copyright Office, which is under the Attorney General‘s Office, periodically initiates raids on markets for pirated works. The Customs Service has collaborated with concerned companies to inspect import shipments.

GUATEMALA

Guatemala was listed on the Watch List in the 2010 Special 301 report. The United States recognized Guatemala‘s efforts to increase enforcement actions, including by appointing a new IPR prosecutor and establishing an interagency IPR working group. These efforts have led to an increase in the number of raids, seizures, and prosecutions. The report highlighted the need for continued efforts to implement Guatemala‘s obligations under the CAFTA-DR, including those to ensure that proper resources are available for its enforcement activities, to achieve improved coordination among enforcement agencies, and to concentrate it enforcement efforts on manufacturers of pirated and counterfeit goods.

The United States will continue to monitor Guatemala‘s implementation of its IPR obligations under the CAFTA-DR.

HONDURAS

In 2010 Honduras reestablished its IPR prosecutors‘ office as an independent entity within the Public Ministry in 2010, reversing a 2009 decision to merge it into the common crimes office. However, the United States remains concerned about the prospects for effective IPR enforcement in Honduras given that its IPR enforcement office lacks necessary personnel and resources to wage a truly effective campaign. The United States will continue to monitor Honduras‘ implementation of its IPR obligations under the CAFTA-DR.

HONG KONG

The Hong Kong government generally provides robust IPR protection and enforcement. Hong Kong has strong laws in place, a dedicated and effective enforcement capacity, a judicial system that supports enforcement efforts with deterrent fines and prison sentences, and youth education programs that discourage IPR-infringing activities. Hong Kong remains vulnerable, however, to some forms of IPR infringement, such as on-line copyright piracy, including the rapid growth of unauthorized file sharing over peer-to-peer (P2P) networks and end-user business software piracy. Due to the failure of internet service providers and IP rights holder to reach an agreement on a voluntary framework to address on-line infringements, the Hong Kong government restarted its efforts to draft digital IPR protection amendments to the Copyright Ordinance. The Hong Kong government expects to introduce the amendments into the Legislative Council in the 2010-2011 legislative session.

Although Hong Kong Customs routinely seizes IPR infringing products arriving from mainland China and elsewhere, stakeholders report that large quantities of counterfeit pharmaceuticals, luxury goods, and other infringing products continue to enter Hong Kong, destined for both the local market and transshipment to third-party countries. The U.S. Government continues to monitor the situation to ensure that Hong Kong sustains its IPR protection and enforcement efforts and addresses remaining problem areas.

INDIA

India was listed on the Priority Watch List in the 2010 Special 301 Report. Key concerns include weak protection and enforcement of intellectual property rights. Although India continues to take potentially positive steps towards establishing a more comprehensive and stable legal framework for the recognition and protection of IPR, India needs to improve its IPR regime by providing stronger protection for copyrights, trademarks, and patents. India also needs to provide effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical and agrochemical products.

India has not yet enacted legislation to implement the provisions of the WIPO Internet Treaties. Large-scale copyright piracy, especially in the software, optical media, and publishing industries, continues to be a major problem. While India continues to consider optical disc legislation to combat optical disc piracy, it has not taken steps to introduce such legislation. In addition, India‘s criminal IPR enforcement regime remains weak. More police action against those engaged in manufacturing, distributing, or selling pirated and counterfeited goods as well as expeditious judicial dispositions for criminal IPR infringement actions and imposition of deterrent-level sentences, is needed.

INDONESIA

Indonesia was placed on the Priority Watch List in the 2010 Special 301 report. Although Indonesia took enforcement efforts against pirated optical disks, other deficiencies in IPR protection and enforcement continue to represent barriers to U.S. exports and investment. Key issues cited in the report include inadequate enforcement against IPR crimes to address continuing widespread copyright piracy and trademark counterfeiting, inadequate numbers of criminal prosecutions, and non-deterrent penalties for those who are convicted.

ISRAEL

The United States and Israel reached an understanding on February 18, 2010 on several longstanding issues with Israel‘s intellectual property rights (IPR) regime for pharmaceutical products. These issues include improving data protection, the terms of patents on pharmaceuticals, and provisions on the publication of patent applications in Israel. The United States is currently working with the Israeli government to implement the agreement.

Separately from the understanding, Israel has signaled a new willingness to make progress on other IPR issues of concern, such as implementing the core requirements of World Intellectual Property Organization (WIPO) “Internet Treaties,” (i.e., the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty). The United States welcomes this step, and encourages Israel to proceed with full accession to, and implementation of, the WIPO Internet Treaties.

JAPAN

Japan generally provides strong IPR protection and enforcement. However, the U.S. Government continues to urge Japan to improve IPR protection and enforcement through bilateral consultations and cooperation, as well as in multilateral and regional fora.

For example, while Japan provides a 70 year term of protection for cinematographic works, only a 50 year term is provided for all other works protected by copyright and related rights. In 2010, the U.S. Government continued to urge Japan to extend the term of protection for all the subject matter of copyright and related rights in line with emerging international trends. In addition, amendments to the Copyright Law came into effect in 2010 which, among other things, clarified that the statutory private use exception does not apply in cases where a downloaded musical work or a motion picture is knowingly obtained from an infringing source. The U.S. Government also continues to urge the Japanese government to expand this limitation on the private use exception to cover all works protected by copyright and related rights.

The U.S. Government also has urged Japan to continue to reduce piracy rates, including adopting methods to protect against piracy in the digital environment. Police and prosecutors lack ex officio authority to prosecute IPR crimes on their own initiative, without a rights holder‘s complaint. Japan‘s Internet Service Provider liability law also needs to be improved in order to provide adequate protection for rights holder‘s works on the Internet. In addition, Japan‘s laws should provide effective criminal and civil remedies against unauthorized circumvention of technological protection measures used by rights holders to protect their works, trafficking in tools used to circumvent them, and providing circumvention services.

Japan is also an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

JORDAN

The Jordanian government continues to take steps to provide more comprehensive protection of IPR. It recently appointed a special prosecutor for IPR, and is working to enforce existing laws more effectively. The government also promulgated new regulations, based on existing laws, to improve enforcement and to strengthen penalties. However, enforcement in certain areas (especially digital media) remains weak. Jordanian agencies responsible for IPR enforcement lack resources and capacity. Prosecution efforts should be strengthened, particularly with respect to utilizing ex officio authority to bring charges in criminal cases.

KAZAKHSTAN

To facilitate its WTO accession and attract foreign investment, Kazakhstan is modernizing its legal regime for protecting IPR. In 2009, Kazakhstan adopted several amendments to its IPR law, including the legal recognition of vendors who have the rights to print and digital media. This amendment allows licensed vendors to seek damages from unauthorized dealers selling pirated merchandise. Kazakhstan also amended its patent law to clearly define types of IPR violations, accountability for violators, and to define the relationship between an employer and an employee with respect to an employee‘s invention.

Kazakhstan has taken steps towards implementing international IPR standards. In 2010, for example, the government introduced amendments to its trademark legislation with a view to complying with TRIPS obligations. Kazakhstan has also ratified 15 of the 24 treaties endorsed by the World Intellectual Property Organization (WIPO). Kazakhstani authorities have stated that Kazakhstan intends to sign several agreements in 2011, including the Agreement on the Repression of False or Deceptive Indications of Source on Goods, and the Agreement Concerning the International Registration of Trademarks. Kazakhstan has also said it intends to ratify the Nairobi Treaty on the Protection of the Olympic Symbol, the Singapore Treaty on the Law of Trademarks, and the Rome Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations.

Pursuant to statutes enacted in November 2005 that authorize stronger penalties, authorities have conducted numerous raids against distributors of pirated products. The government‘s efforts have helped to expand the Kazakhstani market for licensed, non-infringing products. Customs controls need to be applied more effectively against imported contraband. Further progress also is needed in the realm of civil enforcement in Kazakhstan. Although civil courts have been used effectively to stem IPR infringement, judges often lack technical expertise in the area of IPR, which is a significant obstacle to further improvement in Kazakhstan‘s IPR climate.

KENYA

Kenya‘s enforcement of IPR continues to be a serious challenge. Pirated and counterfeit products in Kenya, mostly imported from Asia, present a major impediment to U.S. business interests in the country. Shoes, textile products, office supplies, tubes and tires, medicines, batteries, shoe polish, soaps, and detergents are the most commonly counterfeited items.

According to a survey released by the Kenya Association of Manufacturers (KAM) in late October 2008, piracy and counterfeiting of business software, music, consumer goods, and pharmaceuticals in Kenya cost firms about $715 million in lost sales annually. KAM estimates that the government loses over $270 million in potential taxes annually. The Pharmaceutical Society of Kenya contends that over 50 percent of anti-malaria drugs sold in Kenya are counterfeit. A random survey by the National Quality Control Laboratories and the Pharmacy and Poisons Board concluded that 30 percent of all drugs in Kenya are counterfeit.

Kenya‘s EPZs have served as a conduit for counterfeit and sub-standard goods. These products enter the
EPZ ostensibly as sub-assembly or raw materials, but are actually finished products. These counterfeit and substandard goods also end up in the Kenyan marketplace without paying the necessary taxes. Batteries, in particular, have been a problematic product in the EPZs.

The Kenya Copyright Board (KCB) has the authority to inspect, seize, and detain suspect articles and to prosecute offenses. The KCB is severely understaffed with only three prosecutors and two police officers detailed to the organization. The KCB continues to work jointly with U.S. rights holders in conducting raids.

Kenyan artists have formed organizations to raise the awareness of intellectual property rights and to lobby the government for better enforcement. Two of the most active groups are the Music Copyright Society of Kenya and Kopiken. Kenya‘s Music Copyright Society claimed in September 2008 that 90 percent of its potential earnings are lost to piracy and urged the Kenya Revenue Authority to require authentication stickers on musicians‘ releases. IPR enforcement against pirated Kenyan and foreign works remains weak.

The Anti-Counterfeit Bill of 2008 passed Parliament in December 2008. Long sought by the business community, the bill provides for the creation of an Anti-Counterfeit Agency (ACA) and strengthens the ability of law enforcement agencies to investigate and prosecute manufacturers and distributors of counterfeit and pirated goods. The government inaugurated the ACA in December 2009 and operationalized it in June 2010. However, the ACA remains severely underfunded, receiving less than half of its budget request for 2010. KAM continues its strenuous efforts to increase government focus on the counterfeit and piracy issues that negatively impact virtually every legitimate manufacturer in Kenya. In response local authorities working with U.S. rights holders, have seized more than 9,000 counterfeits in Kenya since November 2008.

KOREA

Korea generally provides strong intellectual property rights protection and enforcement. Korea‘s progress on IPR protection and enforcement led to its removal from the Special 301 Watch List in 2009. The United States recognizes the importance the Korean government places on IPR protection, a development that has accompanied Korea‘s shift to becoming a significant creator of intellectual property. The 2009 amendments to Korea‘s Copyright Law include measures to deter copyright infringement via file-sharing platforms on the internet. Korea has also demonstrated a renewed commitment to investigating and prosecuting ?topsites- (password-protected sites that store copyright infringing data files which are made available to other internet users). An investigation this past year concluded with the seizure of a topsite and the prosecution of its operator. However, concerns remain over new forms of online piracy, corporate end-user software piracy, book piracy in universities, and counterfeiting of consumer products.

Korea was also an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist Parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

KUWAIT

Kuwait was listed on the Watch List in the 2010 Special 301 Report. The United States welcomes continued progress on enforcement against copyright piracy and trademark counterfeiting, particularly by Customs authorities. However, there are areas of IPR protection and enforcement that continue to represent barriers to U.S. exports and investment. Key issues cited in the report include the lack of deterrent criminal penalties and excessive delays in the enactment of key pieces of IPR related legislation, which have been pending for years. The IPR Department at the Ministry of Commerce and Industry is currently drafting a revised copyright law. The United States has provided technical assistance on this legislation and encourages Kuwait to pass the necessary IPR-related legislation and improve its enforcement efforts.

LAOS

Laos is working to create a more modern IPR regime but currently provides deficient levels of IPR protection. Overall weak IPR enforcement as a result of an uncoordinated enforcement regime, insufficient resources devoted to enforcement, and a lack of implementing measures for the protection of IPR to continue to represent barriers to U.S. exports and investment. Issues of concern include poor coordination between the National Authority for Science and Technology and the police as well as ineffective IPR enforcement at the border. Laos promulgated its first Intellectual Property Law in January 2008, but implementing regulations have yet to be issued and the law itself will likely require further amendments in order fully implement Lao BTA obligations and eventually the WTO Agreement on Trade Related Aspects of Intellectual Property Rights. In addition, Laos must establish a system of civil litigation and criminal enforcement in addition to the current system of administrative penalties and warnings in order to fully implement its commitments under these agreements.

MALAYSIA

Malaysia was placed on the Watch List in the 2010 Special 301 report. Malaysia continues to express a commitment to protecting and enforcing IPR and to pursuing needed legislative and regulatory improvements. Some areas of IPR enforcement, especially in the business software area, improved last year, and industry reports increased responsiveness from the Ministry of Domestic Trade, Cooperatives, and Consumerism to its requests for enforcement actions.
However, other areas of IPR protection and enforcement continue to represent barriers to U.S. exports and investment. Key issues cited in the report include continued widespread piracy and counterfeiting, declining IPR enforcement efforts, and lack of ex officio initiated IPR investigations by customs officials, as authorized under Malaysian law. Industry reports that book piracy remains problematic, and copyright piracy over the Internet is rising. The United States continues to encourage Malaysia to accede to the WIPO Internet Treaties and the Budapest Treaty. In addition, the United States continues to urge Malaysia to provide effective protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products, and to provide an effective system to address patent issues expeditiously in connection with applications to market pharmaceutical products.

MEXICO

Mexico was listed on the Watch List in the 2010 Special 301 report. The report noted Mexico‘s improved enforcement efforts, demonstrated by an increase in the number of raids, arrests, and indictments in 2009, and the imposition of the longest prison sentence on record in Mexico for an IPR violation (six and-a-half years). In addition, bilateral cooperation among agencies charged with intellectual property protection and enforcement was noted as encouraging, especially among those participating in a series of training and exchange programs over the past year. In the Special 301 report, the United States urged Mexico to increase resources devoted to protecting intellectual property and improving coordination among enforcement officials at the federal, state, and municipal levels. Concerns also remained over enforcement procedures and the inconsistent issuance of deterrent penalties. The United States welcomed Mexico‘s passage of legislation that would provide the Mexican Attorney General‘s office and certain Mexican enforcement officials with ex officio authority to prosecute IPR infringement. Legislation is still needed to provide ex officio authority to customs officers. The United States was also encouraged to learn about the steps that Mexico is taking to establish a voluntary recordation system at the border, coupled with new procedures with respect to detention of seized goods at the border. The United States welcomed signs that Mexico may be prepared to move forward with additional legislation to strengthen its IPR regime, including an anti-camcording law and the implementation of the WIPO Internet Treaties. The United States encouraged Mexico to provide effective protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products. The United States also welcomed recent efforts by Mexican authorities to improve Mexico‘s system to address patent issues in connection with applications to market pharmaceutical products, as the existing system has generated considerable litigation and uncertainty. The United States continues to work with Mexico to resolve IPR concerns through bilateral, regional, and other means of engagement.

Mexico was also an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010.

MOROCCO

Morocco has enacted legislation to enhance protection for trademarks, copyrights, patents, and undisclosed pharmaceutical and agricultural chemical test data. Elements of the new legislation include provisions concerning disputes over Internet domain names, strong anti-circumvention provisions to prohibit tampering with technologies designed to prevent copyright infringement, and specific protections for temporary copies, which are critical in the digital environment.

The Moroccan Copyright Office has reported that Morocco‘s capacity to detect and address internet-based IPR violations is insufficient. The Moroccan government has requested technical assistance from the United States and other parties, to enhance its capacity to address copyright infringement. Morocco was also an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist Parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

NEW ZEALAND

New Zealand generally provides for strong IPR protection and enforcement. Recent developments include the introduction of a new patent bill. Although the draft bill strongly supports New Zealand‘s objective of improving its patent system, the United States has concerns over certain elements of the current draft bill. The exclusion from patent eligibility of computer programs is of particular concern as it is unconstitutional with patent eligibility standards in other developed economies and is a departure from New Zealand‘s current Patents Act. In addition, the proposed bill does not include other provisions in keeping with international best practices. For instance, the bill does not include provisions allowing for patent term restoration, which would enable rights holders to recoup the effective patent term lost due to delays in the marketing approval process. The absence of such a provision makes it more difficult for an innovator to recoup his investment in developing new medical products.

The United States continues to encourage the New Zealand government to accede to and implement the WIPO Performance and Phonograms Treaty and the WIPO Copyright Treaty. New Zealand was an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist Parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

NICARAGUA

To implement its CAFTA-DR IPR obligations, Nicaragua undertook legislative reforms providing for stronger IPR protection and enforcement. Despite these efforts, the piracy of optical media and trademark violations continue to be concerns. The United States has expressed concern to the Nicaraguan government about inadequate IPR enforcement.

NIGERIA

Nigeria is a party to the World Intellectual Property Organization (WIPO) Convention, the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, and the Patent Law Treaty. Nigeria has also signed the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. Legislation intended to implement WTO obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights has been pending in the National Assembly for several years.
The Nigerian government‘s lack of institutional capacity to address IPR issues is a major barrier to enforcement. Relevant Nigerian government institutions suffer from low morale, poor training, and limited resources. Piracy remains a problem despite Nigeria‘s active participation in the conventions cited above and the growing interest among Nigerians in seeing their intellectual property protected. Counterfeit automotive parts, pharmaceuticals, business and entertainment software, music and video recordings, and other consumer goods are sold openly. Piracy of books and optical disc products is also a problem.

Industry reports contend that intellectual property infringers from other countries appear increasingly active in using Nigeria as a base for the production of pirated goods. Patent and trademark enforcement remains weak, and judicial procedures are slow and reportedly compromised by corruption. However, the government has taken steps to improve enforcement. Efforts to combat the sale of counterfeit pharmaceuticals, for example, have yielded some results. The United States has provided training to government IP officials through various training programs offered by the United States Patent and Trademark Office‘s (USPTO) Global Intellectual Property Academy (GIPA) under the Trade and Investment Framework Agreement (TIFA) between the United States and Nigeria.

Nigeria‘s broadcast regulations do not permit rebroadcast or excerpting of foreign programs unless the station has an affiliate relationship with a foreign broadcaster. This regulation is generally complied with, but some cable providers transmit foreign programs illegally. The National Broadcasting Commission monitors the industry and is responsible for punishing infractions.

Widespread pirating of foreign and domestic videotapes discourages the entry of licensed distributors. In 2004, the Nigerian Copyright Commission (NCC) launched an anti-piracy initiative named “Strategy against Piracy.” The Nigerian Police Force, working closely with the NCC, has raided enterprises producing and selling various pirated works such as software, books, and videos. About 29 cases are currently being prosecuted against IPR violators in various courts in the country. The Nigerian Economic and Financial Crimes Commission (EFCC) has also been active in IPR enforcement.

Discussions continue between the Standards Organization of Nigeria and the Chinese government to combat the influx of sub-standard and pirated Chinese products into Nigeria.

NORWAY

Norway was listed on the Watch List in the 2010 Special 301 Report. The key issue cited in the report was the lack of product patent protection for certain pharmaceutical products. U.S. industry has expressed concern that the regulatory framework in Norway regarding process patents filed prior to 1992 – and pending in 1996 – denies adequate patent protection for a number of pharmaceutical products currently on the Norwegian market. The United States will continue to encourage Norway to resolve this issue.
U.S. industry also reports concerns regarding Norway‘s implementation of the EU‘s 2001 Copyright Directive that addresses Internet piracy, and regarding private use exceptions under Norway‘s copyright laws. The Norwegian government is currently drafting revised legislation that would enhance copyright protection.
U.S. and Norwegian authorities held constructive discussions in 2010 regarding several IPR matters, including: pharmaceuticals product patent protection; the need to educate and promote public awareness of illegal internet use; the role of Internet service providers in prohibiting piracy; and the need to dedicate necessary public resources to combat counterfeiting and piracy and to prosecute offenders.

OMAN

Oman committed to provide strong IPR protection and enforcement in the US – Oman FTA. Oman revised its IPR laws and regulations to implement its FTA commitments, and it acceded to several international IPR treaties. While IPR laws in Oman are generally enforced, cases of on-line piracy – which can be difficult to detect – remain common.

PAKISTAN

In 2009, Pakistan was listed on the Special 301 report‘s Priority Watch List. The report cites weak protection and enforcement of intellectual property rights, particularly as they relate to copyright and pharmaceutical data protection.

While the government took steps in 2009 and 2010 to improve copyright enforcement, especially with respect to optical disc piracy, it appears that only some of the arrests resulted in prosecutions and the few verdicts that were issued resulted in minor prison sentences. Pakistan‘s Federal Investigation Agency continues to conduct large scale raids. From October 2009 – October 2010, 20 new cases were filed against IPR violators and millions of rupees worth of pirated material were confiscated. However, the failure to successfully prosecute those cases has meant that they had little deterrent effect: of the 41 individuals arrested and charged with IPR infringement during the course of the investigation, only 2 were accused and both were acquitted. Pakistan is now reportedly being used as a conduit for illicit products from Russia, Malaysia, Singapore, China, Bangladesh, and Sri Lanka for onward distribution to third countries. Book piracy also continues to present barriers to legitimate trade and investment.

Pakistan has not made progress in providing effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. Since 2006, the Government of Pakistan and international and local pharmaceutical companies have been involved in negotiations related to draft regulations on data protection. Although draft data protection regulations were finally formulated in 2009, the regulations remain under Government of Pakistan review and have not been promulgated.

The recently enacted 18th Amendment makes healthcare a provincial responsibility. As a result, data protection regulations now require passage from the provincial assemblies in addition to the National Assembly, further delaying their enactment. Pakistan also lacks an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products. In 2009, President Zardari issued an ordinance that removed an 18-month patent application processing deadline, slowing the processing of pending patent applications.

In 2009, the Pakistan Cabinet approved a draft Plant Breeder‘s Rights Law and an amendment to the Seed Act of 1976. These bills await Parliamentary approval.

PANAMA

The government of Panama is making efforts to strengthen the enforcement of IPR in Panama. Since 1997, two district courts and one superior tribunal have been exclusively adjudicating antitrust, patent, trademark, and copyright cases. Since January 2003, a specific prosecutor with national authority over IPR cases has consolidated and simplified the prosecution of those cases. Law No. 1 of 2004 added crimes against intellectual property as a predicate offense for money laundering, and Law 14 establishes a five to 12 year prison term, plus possible fines. A Committee for Intellectual Property (CIPI), comprising representatives from five government agencies (Colon Free Zone, Intellectual Property Registry, Ministry of Education, Customs, and the Attorney General), under the leadership of the Ministry of Commerce and Industry, is responsible for development of intellectual property policy in Panama.

The Panamanian government reports that, in 2009, there were 185 convictions for IPR-related violations, and it seized over $17 million of illicit goods. However, given Panama‘s role as a transshipment point, U.S. industry remains concerned that Panama may become an important hub in the regional and global trade in pirated and counterfeit goods. Piracy is a significant problem in Panama, and Internet piracy is an emerging problem. For example, unauthorized downloaded movie or music files from the Internet often are used in the creation of pirated optical music and film discs distributed by street vendors.

The TPA would provide for improved standards for the protection and enforcement of a broad range of IPR, including protections for patents, trademarks, undisclosed test and other data submitted to obtain marketing approval for pharmaceuticals and agricultural chemicals, and digital copyrighted products such as software, music, text, and videos; and further deterrence of piracy and counterfeiting.

PARAGUAY

The United States continues to monitor implementation of the Memorandum of Understanding between the United States and Paraguay pertaining to IPR protection and enforcement, which was revised in 2009 and will remain in effect through December 2011. While Paraguay has increased the number of raids and seizures of pirated and counterfeit goods, concerns remain because of porous borders, ineffective prosecution of IPR violators, and court sentences that are insufficient to deter infringement. Although a new penal code which became effective in 2009 increases penalties for IPR violations, prosecution of IPR offenders remains weak, and there are few convictions. Concerns also remain about inadequate protection against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products and the shortcomings in Paraguay‘s patent regime.

Through the Millennium Challenge Corporation‘s Threshold II Program, the Paraguayan government‘s IPR enforcement unit, the Unidad Técnica Especializada or UTE (?Specialized Technical Unit?), is being formalized and strengthened.

PERU

Peru was listed on the Watch List in the 2010 Special 301 report. As a result of the PTPA, Peru enhanced its IPR legal framework significantly to strengthen IPR protection and enforcement. Among other improvements, Peru strengthened its intellectual property office and created a National Strategic Plan to combat counterfeiting and piracy. Notwithstanding the improvements to Peru‘s IPR legal regime, piracy rates remain high. Inadequate law enforcement contributes to ubiquitous counterfeit clothing, medicines, music, videos, software, and toys. There is also a continuing need for measures to prevent government use of unlicensed software. A further concern is the need for deterrent penalties in criminal IPR cases and against businesses found to have engaged in infringing activity. In addition, there is a need for clarity with respect to Peru‘s system for protecting undisclosed test or other data submitted to obtain approval of agricultural chemical products.

PHILIPINES

The Philippines was placed on the Watch List in the 2010 Special 301 report. The United States also conducted an out-of-cycle review in 2010 of the Philippines‘ IPR protection and enforcement prior to the annual review in 2011. The United States determined on the basis of that review that there were areas of IPR protection and enforcement that continue to represent barriers to U.S. exports and investment. Key issues addressed in the out-of-cycle review included ineffective enforcement of IPR, continued widespread copyright piracy and trademark counterfeiting, and amendments to the patent law that prohibit patents on certain chemical forms unless the applicant demonstrates increased efficacy.

The United States has encouraged the Philippines‘ ongoing efforts to address inefficiencies in the judicial system, and to establish specialized regional courts with rules designed to improve the legal consistency in rulings so that rights holders have a reliable avenue for recourse and prosecutions move forward effectively and without delay. While welcoming the enactment of an anti-camcording bill, the United States noted that it has not yet been implemented. The United States also encouraged the Philippines to complete its work on legislative reforms needed to strengthen IPR protection, including the implementation of the WIPO Internet Treaties, which have been pending in the Philippine Congress for years.

QATAR

RUSSIA

Russia was listed on the Priority Watch List in the 2010 Special 301 Report. Key concerns cited in the Report included Russia‘s slow implementation of some of its commitments in the November 2006 Agreement between the Government of the United States of America and the government of the Russian Federation on Protection and Enforcement of Intellectual Property Rights (2006 IPR Agreement). In 2010, Russia implemented the legislative commitments in the 2006 IPR Agreement by passing amendments to Russia‘s IP law – Part IV of the Civil Code – required to implement the TRIPS agreement. These legislative changes included ex-officio authority for Russian customs officials to enforce IPRs at the border in the new Law on Customs Regulation, and (as noted earlier) amending the Law on Circulation of Medicines to provide six years of regulatory data protection, which will become effective when Russia is a WTO Member. In the context of the Custom Union, Russia signed a CU agreement authorizing the creation of a Unified Customs Union IPR Register. The agreement establishes the procedure for registering an IP as well as a framework for the customs authorities of each of the CU Parties to cooperate with each other and with rights holders on border enforcement.

Notwithstanding this progress, concerns remain over lack of action regarding the enforcement-related commitments in the 2006 Agreement, in particular the need for such actions as the imposition of criminal penalties to deter piracy and counterfeiting and increased Internet-related IPR enforcement. While Russia met its 2006 IPR Agreement commitment to establish an accredited collecting society for the Performers and Phonograms category in 2008, U.S. industry has raised concerns regarding the transparency of how royalties are collected and distributed. The U.S. and Russian governments have an ongoing dialogue to obtain the full implementation of this agreement and to help ensure that Russia‘s legislation is consistent with international norms.

In 2010, Russia‘s optical disc production capacity continued to exceed domestic demand, raising concerns regarding optical disc piracy. U.S. copyright industries estimate that approximately 65 percent of sound recordings on the Russian market are pirated, resulting in reported losses of nearly $2 billion in 2009. However, legitimate DVD sales are on the rise, in part due to increased law enforcement action against pirates, including a 2008 ban on camcording in movie theaters, and a growing preference for high quality products. Within the copyright industry, the software sector has enjoyed the benefits of increased enforcement. The Business Software Alliance estimated that from 2004 to 2009 the software piracy rate decreased in Russia from 87 percent to 67 percent, the steepest drop in that time period for any country in the world.

Internet piracy remains a serious and growing concern. Authorities have begun criminal investigations against operators of Russia-based websites. Notably, Russia opened a criminal case against the administrators of interfilm.ru, a website offering pirated copies of movies before or immediately after they open in Russian theaters. Government investigators involved in the case estimate that the site had caused approximately 38.7 billion rubles ($1.25 billion) in damages. Western and Russian recording companies have won several civil suits against Internet pirates, although resulting damage awards have been minimal by U.S. standards. Gaps remain in Russian legal and enforcement efforts to address Internet piracy, particularly with respect to sound recordings and movies.

U.S. and multinational companies continue to report counterfeiting of trademarked goods, especially of consumer goods, distilled spirits, agricultural chemicals and biotechnology, and pharmaceuticals. While in the past U.S. firms complained about ?trademark squatting? by Russian enterprises attempting to appropriate well-known trademarks not active or registered in Russia, rights holders have been increasingly successful in countering ?trademark squatting? schemes though the Russian court system or the Russian Federal Service for Intellectual Property, Patents, and Trademarks (Rospatent). In an effort to advance administrative intellectual property protection, a specialized higher patent chamber at Rospatent has brought greater expertise and efficiency to the adjudication of patent and trademark disputes.

Enforcement

Poor enforcement of IPR in the Russian Federation is a pervasive problem. In the November 2006 IPR Agreement, Russia agreed to improve IPR enforcement while the United States agreed to step up IPR training programs and technical assistance for Russian customs and law enforcement officials. In 2009, the U.S. Patent and Trademark Office conducted seven IPR training programs for Russian police, investigators, prosecutors, judges, and customs officials, and in total trained 286 Russian law enforcement officials. Russian Customs has drafted an ?IPR Enforcement Handbook?, which will be used by all Russian Federal Customs Service (RFCS) officers. With the passage of the new Law on Customs Regulation, this handbook is now out-of-date, but Russia‘s customs service may provide a ?new edition? of the handbook or issue new guidelines for rights holders in the future. Additional training programs are planned for 2011.

In 2010, Russian law enforcement agencies carried out raids on optical disc production facilities suspected of engaging in pirate activities, including major raids in Moscow and surrounding regions. However, most surprise raids are less effective as the date and time of pending raids are often leaked to the optical disc plant in advance. Russian police continue to carry out end-user raids against businesses using pirated products. Non-governmental organizations report that police have used IPR enforcement as a bullying tactic to elicit bribes or harass them. For the copyright industry, key enforcement goals include the introduction and enforcement of Internet Service Provider liability in Russia, improved oversight and transparency of collecting societies, cracking down on illegal websites, such as allofmp3 clones, and enhancing measures against online social networks, such as vKontakte, that facilitate internet piracy.

The Supreme Arbitration Court has addressed the issue of civil IPR enforcement by submitting to the Duma a draft law that would create a specialized intellectual property rights court. If approved, the first-ever specialized IPR court would start its work by 2012. The creation of a specialized IPR court would have a positive impact on civil IPR enforcement in Russia. The court‘s judges would come from within the arbitration courts system and have expertise in intellectual property rights cases.

Domain Names

The Russian Coordinating Center of the National Internet Domain (the Coordination Center) issued a regulation, “Provisions on Priority Registration of Domain Names in the “.PФ” Domain,” that stipulates that domain names must either reproduce or match word designations contained in trademarks. Trademark owners with a “.RU” (Russia) domain name can keep the “.RU,” but now have the option of obtaining a “.PФ” (RF) as well. These .PФ domain names may be registered for a fee of approximately $20 for a one-year period, with the possibility of subsequent renewal of the domain name’s registration annually. While in practice trademark holders are given priority in registering domain names that are similar to their particular trademark, there is still a potential issue with cyber squatting. The Coordination Center did not specify that domain names derived from the trademark holders would be protected.

On November 11, 2010, the second stage of the registration for Cyrillic domain names began. On that day, the Coordination Center registered 184,352 addresses for the general public. Any individual or legal entity registered in the Russian Federation can obtain a domain name through the registration process at the cost of approximately $20. Previously, priority registration for the Cyrillic domain name zone began in November 2009 for government entities and trademark holders. Only Russian citizens and businesses registered in the country are able to buy domain names. The .PФ domain has over 500,000 registered addresses. In December, 2010, the Russian government issued a clarification on the auction provision for domain names, suspending the auction for previously unclaimed names until further notice. The issue is still evolving.

SAUDI ARABIA

In February 2010, the United States removed Saudi Arabia from the Special 301 Watch List in recognition of significant progress that Saudi Arabia had made in the protection and enforcement of IPR. The United States will carefully monitor Saudi Arabia‘s progress in continuing to improve its IPR regime. As part of the GCC Customs Union, the six Member States are preparing a draft common trademark law, as well as a draft common unfair competition law to protect companies from unfair commercial use of undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to help ensure that the trademark law and unfair competition law will facilitate Member States‘ implementation of international and bilateral obligations.

SINGAPORE

In connection with its FTA commitments and obligations under international treaties and conventions, Singapore has developed a generally strong IPR regime. Nevertheless, the United States continues to have concerns regarding the government‘s IPR enforcement efforts. These concerns include the transshipment of infringing goods through Singapore, insufficient deterrent penalties for end-user piracy, and the lack of meaningful enforcement against online infringers. Additional IPR concerns have arisen over the pay-television cross-carriage issue, which is detailed below.
Singapore was an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist the parties to the agreement in their efforts to effectively combat IPR infringement, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade.

SOUTH AFRICA

In recent years, the South African government introduced measures to enhance enforcement of the 1997 Counterfeit Goods Act. The government appointed more inspectors, designated more warehouses for securing counterfeit goods, destroyed counterfeit goods, and improved the training of customs, border police, and police officials. While law enforcement authorities often cooperate with the private sector in investigating allegations of trade in pirated or counterfeit goods, some members of the business community have expressed concerns about lax enforcement of IPR laws against imports of infringing goods, and about slow and cumbersome court proceedings. Many are concerned about a South African Customs Administration interpretation of a 2004 court ruling as limiting the Customs Administration‘s authority to seize potentially IPR-infringing goods that are marked for transshipment through South Africa. This interpretation is still being debated within the South African government.

The number of arrests for trading in pirated or counterfeit goods has increased in recent years. In addition, South Africa has taken steps to improve enforcement, such as the creation of DTI‘s enforcement unit, and the establishment of Commercial Crime Courts in several cities. Stakeholders were encouraged by a November 2010 Pretoria Commercial Crime Court decision sentencing an optical disc pirate to imprisonment. The South African government has also formed an interagency counterfeit division including the DTI, the South African Revenue Service (SARS), and the South African Police Service to improve coordination of IPR enforcement. The DTI is also working with universities and other local groups to incorporate IPR awareness into college curricula and training of local business groups.

Despite efforts to improve IPR enforcement, monetary losses from counterfeiting and piracy remain high. U.S. industry has expressed concern about software, optical disc, and internet piracy, the growing number of counterfeit production facilities, advertisements for ?burn-to-order? services, and the unwillingness of South African internet service providers (ISPs) to shut down infringing sites. Counterfeit medicines are also a problem.

SRI LANKA

SWITZERLAND

Switzerland generally maintains high standards of IPR protection. However, U.S. industry has expressed some concerns regarding amendments that Switzerland made to its copyright law to implement the World Intellectual Property Organization Copyright Treaty and Performances and Phonograms Treaty. For example, industry has asserted that exceptions for use of multimedia content are overly broad. The United States will continue to monitor the implementation and effect of this legislation.

Switzerland was an active participant in the Anti-Counterfeiting Trade Agreement (ACTA) negotiations, which were concluded in November 2010. The ACTA establishes an international framework that will assist Parties in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy, which undermines legitimate trade and the sustainable development of the world economy.

TAIWAN

Taiwan generally provides strong IPR protection and enforcement. However, rights holders continue to express concern regarding: infringement of copyrighted material on the Internet; illegal textbook copying on and around university campuses; inadequate protection for the packaging, configuration, and outward appearance of products (trade dress); and the continued availability of counterfeit pharmaceuticals in Taiwan. The importation and transshipment of counterfeit products from China is also a problem, as well as the collusion of some Taiwan companies in supplying components to mainland factories producing “Shanzhai” counterfeits (e.g. mobile phones, netbooks, and other electronic devices). Taiwan also needs to provide an effective system to address patent issues expeditiously in connection with applications to market pharmaceutical products.

Piracy on the Internet remains a serious IP enforcement concern in Taiwan. In April 2009, the Legislative Yuan amended the Taiwan Copyright Law to require Internet service providers (ISP) to undertake specific and effective notice-and-takedown actions against online infringers to avoid liability for the infringing activities of users on their networks. Rights holders expect to reach agreement on a “code of conduct” with ISP operators for implementation of the new ISP law regulation.

In January 2010, the Legislative Yuan passed an amendment to the Copyright Collective Management Organization Act and an amendment to article 37 of the Copyright Law. Copyright collection groups complained that both amendments, which require a single portal and a joint tariff rate for fee collection, and exempt secondary public broadcasting users from criminal liability, weaken copyright owners’ ability to collect remuneration for the use of their works.

Pharmaceuticals

Taiwan formally established the Taiwan Food and Drug Administration (TFDA) on January 1, 2010 to replace the Bureau of Pharmaceutical Affairs (BOPA). The TFDA combines into one office agencies responsible for food and drug policy, license issuing, and product testing. The new configuration will potentially consolidate and speed up approval procedures. TFDA continues to work cooperatively with U.S. industry in revising registration procedures (e.g., reducing the required number of Certificates of Pharmaceutical Products (CPPs) to one), and facilitating the entry of new products into Taiwan’s market.

However, the U.S. pharmaceutical industry continues to express concern that measures related to pricing and reimbursement inadequately take into account the value of innovative products and adversely affect patients‘ ability to access new pharmaceutical products. For instance, in Taiwan, hospitals derive significant revenue from the difference between the prices they negotiate with drug companies and the higher amounts that the Bureau of National Health Insurance (BNHI) reimburses for the same drugs. To close the gap, BNHI uses the Price Volume Survey (PVS) to collect “market” price data from hospitals and drug makers for calculating new, lower drug reimbursements. The hospitals, in turn, re-negotiate contracts with drug companies after each PVS, driving prices down further while perpetuating the reimbursement gap at lower price levels. The process threatens to drive foreign pharmaceutical firms out of Taiwan’s market as their profit margins dwindle through each successive PVS cycle. The pharmaceutical industry has indicated that it is encouraged by recently passed legislation that will implement a Drug Expenditure Target approach that could improve the transparency and predictability of pricing and reimbursement in the market. The United States encourages Taiwan to continue to consult with relevant stakeholders in implementing policies that will facilitate the private sector‘s development of innovative products and improve patients‘ access to such products.

Medical Devices

The medical device industry has expressed concern regarding pricing policies that currently specify a single purchase price for all medical devices that treat the same indication. This policy does not take into account difference in quality and effectively subsidizes lower-cost devices while underpaying for high-tech, higher quality devices, discouraging the introduction of these devices into the Taiwan market.

Department of Health (DOH) officials continue to work with industry to improve the medical device registration process, particularly concerning identical products made at manufacturing sites with different quality-system documentation, or with small modifications, such as outer packaging changes.

THAILAND

Thailand was listed on the Priority Watch List in the 2010 Special 301 Report. The United States also conducted an out-of-cycle review in 2010 to review Thailand’s IPR protection and enforcement prior to the full Special 301 annual review in 2011. Key concerns cited in the 2010 report included continued widespread copyright piracy and trademark counterfeiting and a growing challenge in the areas of Internet, cable, and signal piracy. While the United States is encouraged by the Royal Thai government‘s senior level commitment to stronger IPR protection and enforcement through the creation of the National Task Force, its action plan to improve its IPR regime and the launch of the Creative Economy project, some concerns regarding IPR protection and enforcement remain and represent barriers to U.S. exports and investment. The United States welcomed Thailand‘s accession to the Patent Cooperation Treaty in 2009 and will continue to encourage Thailand to quickly enact proposed legislation to amend its copyright law to, among other things, implement the WIPO Internet Treaties, address landlord liability for infringement and illegal camcording, and enhance the authority of Thai Customs to take enforcement actions ex officio. Thailand also is considering possible amendments to its patent law.

TURKEY

Turkey remained on the Watch List in the 2010 Special 301 Report. Turkey has not yet completed important legislative reforms needed to ensure effective enforcement of IPR. The Special 301 Report noted that piracy and counterfeiting are continuing, serious problems. Piracy of business software, and online music piracy have increased, and book and entertainment software piracy remain a concern. Over the course of 2010, Turkey conducted several operations that resulted in the seizure of large amounts of counterfeit goods. However, Turkey is also becoming a major exporter of, as well as a transshipment point for, counterfeit and pirated products. Delays in the judicial process further deficiencies in the overall IPR protection and enforcement regime. The Constitutional Court‘s dismissal of a significant number of trademark-related infringement convictions in 2008 – and the Turkish government‘s subsequent inability to successfully prosecute the original offenders – continues to cause concern among rightsholders regarding Turkey‘s commitment to effective trademark protection.

U.A.E.

The UAE has made the protection of intellectual property a priority in recent years. According to 2010 industry estimates, the rate of software piracy in the UAE is the lowest in the Middle East, and the second lowest in the Middle East and Africa, after South Africa. While the UAE is recognized as the regional leader in fighting computer software piracy, other industry stakeholders believe the UAE could be doing more. For example, the recording industry has complained about the UAE‘s failure to establish a royalty collecting mechanism for the use of recorded music, which means that right holders are not being remunerated for certain uses of such works.

The GCC Customs Union, of which the UAE is one of six members, is preparing a draft common trademark law, as well as a draft common unfair competition law to protect companies from unfair commercial use of undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to help ensure that the trademark law and unfair competition law will facilitate Member States‘ implementation of international and bilateral obligations.

UKRAINE

Ukraine was listed on the Watch List in the 2010 Special 301 Report. Key concerns cited in the report included weak enforcement, widespread retail piracy, the transshipment of pirated and counterfeit goods, internet piracy, the continued government use of illegal software, and inefficiencies in the judicial system. The need to improve protection of intellectual property was a major theme of the bilateral 2010 Trade and Investment Council meeting, during which the two sides agreed to an IPR Action Plan. Matters addressed in the plan include, inter alia, public awareness, strengthened enforcement, and needed legislative improvements. Additionally, the Plan identifies measures to transition government ministries to legal software. The Government of Ukraine formally adopted the IPR plan in February 2011.

VENEZUELA

Venezuela was listed on the Priority Watch List in the 2010 Special 301 Report. Key concerns cited in the Report relate to the deteriorating environment for the protection and enforcement of IPR in Venezuela. Copyright piracy is increasing and the protection for certain trademarks remains unclear. Concerns remain regarding the revocation of existing patents on pharmaceuticals. Other concerns include the lack of effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. Although Venezuela’s tax and customs authority had made some progress on raising awareness of IPR issues through public anti-piracy and ?zero tax evasion? campaigns, those programs are no longer in place.

VIETNAM

Vietnam was listed on the Watch List in the 2010 Special 301 report. While recognizing the strides Vietnam has made in IPR protection and enforcement over the past several years, the United States noted that enforcement efforts have not kept pace with rising levels of IP infringement and piracy in the country. Furthermore, administrative enforcement actions and penalties –– the most commonly used means of enforcing IPR in Vietnam –– have not served as a sufficient deterrent. The special 301 report also noted that IP violations committed over the Internet continue to increase. Over the past year, Vietnamese agencies took some initial steps to enforce IP protections on the Internet, including sending warning letters and meeting with service providers to provide warnings against providing infringing content. The United States will continue to work with Vietnamese authorities and to encourage more vigorous enforcement actions.

In 2009, Vietnam revised its IPR Law, as well as IPR related provisions in the Criminal Code, to provide criminal penalties for IPR infringement conducted on a commercial scale. Vietnam has stated it will clarify the IPR related provisions in the Criminal Code through an implementing decree. The United States continues to monitor implementation of these important provisions. In September 2010, Vietnam issued a new decree on administrative penalties for industrial property violations with the aim of further deterring violations.

USTR Publishes 2011 National Trade Estimate Report on Foreign Trade Barriers

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