Originally published Summer 2004
When developing a global strategy for intellectual property (IP) protection, one of the factors a company should consider is whether the targeted countries provide an environment conducive to the enforcement of IP rights. A company generally should not expend significant amounts of time and money to obtain IP rights outside of the United States if those rights cannot be used effectively to secure or maintain a competitive advantage. (See, for example, "Foreign Patent Filing: Protecting Your Technology in a Global Environment" in the Spring 2004 issue of the Intellectual Property Observer - to view this online, please click on the 'Next Page' link provided at bottom of this page.)
Without assistance, it may be difficult for a company to evaluate the legal protection for IP in foreign countries of interest. One resource, however, is available to everyone with access to the web. Under the Trade Act of 1974, the office of the United States Trade Representative (USTR) is required to identify those countries that either fail to adequately and effectively protect IP or deny fair and equitable market access to U.S. persons that rely on IP protection. The results of the USTR’s study are published annually as the USTR’s "Special 301" reports. This year’s edition of the report can be found at http://www.ustr.gov/reports/2004-301/special301.htm.
The report provides a short discussion of each country that the USTR deems guilty of inadequate IP protection or of disadvantaging U.S. actors relying on IP rights and identifies particular problems in those countries.
Countries are deemed "Priority Foreign Countries" if they have the "most onerous and egregious acts, policies and practices which have the greatest adverse impact" on the relevant U.S. products and are not engaged in negotiations with the USTR to address these issues. In the report for 2004, the only Priority Foreign Country is Ukraine, due to widespread optical media piracy and an inadequate IP law regime.
If the USTR is able to negotiate an agreement with any of the Priority Foreign Countries to address its perceived violations, Section 306 of the Trade Act requires the USTR to monitor the country’s compliance with the agreement. These so-called "Section 306" countries are separately identified in the report. This year’s Section 306 countries are Paraguay and China. According to the USTR, Paraguay has weak protection for copyrights and trademarks and inadequate enforcement efforts, while China suffers from widespread piracy, the exportation of pirated goods, and weak enforcement efforts.
Also, a country is placed on either the "Priority Watch List" or the "Watch List" when the USTR believes that particular problems concerning IP protection or market access for U.S. persons relying on IP exist in that country. Countries on the Priority Watch List are purportedly under heightened scrutiny on these issues as compared to countries on the Watch List.
Examples of countries on the Priority Watch List are the European Union (due in part to inadequate patent protection for biotechnology inventions), India (due in part to inadequate patent, copyright, and trademark regimes and weak enforcement efforts), Russia (due in part to an inadequate copyright regime), and Taiwan (due to counterfeit pharmaceuticals and an inadequate copyright regime).
Examples of countries on the Watch List are Canada (due in part to inadequate patent protection for higher life forms and pharmaceuticals), Israel (due in part to inadequate patent protection for biotechnology), and Mexico (due in part to an inadequate copyright regime and weak enforcement efforts).
The USTR report is one resource that can be used to evaluate the level of IP protection available in foreign countries. It may be worthwhile for a company to consult the report when developing a global strategy for IP protection.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
