The 2012 USTR Special 301 Report was published on April 30, 2012. The report details USTR’s unilateral standards for the granting and enforcement for a diverse set of intellectual property rights, and singles out countries that USTR claims do not meet those standards. The Report places the offending countries into different categories, including those on the “Priority Watch List,” the “Watch List” and those to have a “Special 306” review. According to USTR:
“Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas. Additionally, under Section 306, USTR monitors a trading partner’s compliance with measures that are the basis for resolving an investigation under Section 301. USTR may apply sanctions if a country fails to satisfactorily implement such measures.”
As has become tradition, the list of grievances and the 41 countries named on the various lists are largely driven by lobbying efforts of right holders, and often bear no real relationship of more objective standards regarding intellectual property policies or practices. For example, Canada is listed on the “Priority Watch List,” or PWL, even though by international standards, and indeed, in comparison to the United States, Canada is a country where the rates of infringement are relatively low.
Having signed a previous Free Trade Agreement with the United States does not make much of a differences, as both non-US members of NAFTA (Canada and Mexico), and countries such as Peru, Colombia, Chile and Vietnam, which have trade agreements, are among those singled out for sanctions.
May 1, 2012
No country in sub-Saharan Africa was included in the list.
Among developing countries, the size of the domestic economy continues to provide an accurate predication of the location on the Special 301 list.
Three of the BRIC countries are given a PWL designation (China, India and Russia), and Brazil is listed as a PW country.
The only economic group not included on the list are those designated by the UN as least developed countries (LDCs).
In South America, nine of twelve countries are included in one list or the other — only the smaller economies of Guyana, Suriname and Uruguay escaped the 301 Report.
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In the Asia and Pacific regions, nine of the twelve countries with the largest populations are included on one of the Special 301 lists – only Bangladesh, Iran and Japan are excluded. Bangladesh is excluded because it is an LDC country, and Iran is exclude for political considerations that have nothing to do with its IPR policies.
Among the five most populous non-LDC countries in the Asia Pacific region, all five received the PWL designation.
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The Report begins with these passages in the Executive Summary
The “Special 301” Report is an annual review of the state of intellectual property rights (IPR) protection and enforcement in trading partners around world, which the Office of the United States Trade Representative (USTR) conducts pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994).
This Report reflects the Administration’s resolve to encourage and maintain adequate and effective IPR protection and enforcement worldwide. It identifies a wide range of concerns, including troubling “indigenous innovation” policies that may unfairly disadvantage U.S. rights holders in China, the continuing challenges of copyright piracy over the Internet in countries such as Canada, Italy, and Russia, and other ongoing, systemic IPR enforcement issues presented in many trading partners around the world.
USTR looks forward to working closely with the governments of the trading partners that are identified in this year’s Special 301 Report, to address both emerging and continuing concerns, and to continue to build on the positive results that many of these governments have achieved.
Section 1 of the report sets out the general views of USTR on intellectual property policies and practices, and includes the following sub-sections.
- Positive Developments
- Initiatives to Strengthen IPR Protection and Enforcement Internationally
- Best IPR Practices by Trading Partners
- Capacity Building Efforts
- Trends in Trademark Counterfeiting and Copyright Piracy
- Piracy over the Internet and Digital Piracy
- Trade Secrets and Forced Technology Transfer
- Trademarks and Domain Name Disputes
- Government Use of Software
- Intellectual Property and Health Policy
- Supporting Pharmaceutical and Medical Device Innovation through Improved Market Access
- Implementation of the WTO TRIPS Agreement
- WTO Dispute Settlement
- Interagency Trade Enforcement Center
What norms are presented in this year’s Special 301 Report? It is hard to summarize the 54 page report, because it touches on so many issues, and often the country context and specific wording is important.
It will take a while to digest the details of the report. Here are a couple of highlights:
Aside from general complaints about insufficient zeal to enforce existing intellectual property rights, USTR continues to press our trading partners to join and implement various treaties, such as the WIPO Internet copyright treaties (WCT and WPPT), the Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite, the Trademark Law Treaty, the International Convention for the Protection of New Varieties of Plants, and now the Anti-Counterfeiting Trade Agreement. USTR calls for the creation of special IPR courts and enforcement agencies.
More TRIPS flexibility for Least-developed countries (LDCs)
Following criticism from NGOs over the language in last year’s report (/node/1339), USTR has taken a more flexible attitude toward Least-Developed Countries (LDCs).
Recognizing the particular challenges faced by least-developed countries (LDCs), in 2005 the United States worked closely with them and other WTO members to extend the implementation date for these countries from January 2006 to July 2013. The LDC members in turn pledged to preserve the progress that some have already made toward TRIPS Agreement implementation. Additionally, the LDC members have until 2016 to implement their TRIPS Agreement obligations for patent and data protection for pharmaceutical products, as proposed by the United States at the Doha Ministerial Conference of the WTO.
In December 2011, WTO Ministers decided to invite the TRIPS Council to give full consideration to a duly motivated request from LDC members for an extension of the TRIPS Agreement transition period. The U.S. supports this decision and looks forward to continuing to work with LDCs and other WTO members in this regard.
Access to Medicine
On the area of medicines, USTR wants to be seen as striking a balance, and repeats in several areas that it is guided by the 2001 Doha Declaration on TRIPS, that is supports the WTO 2003 agreement on the export of medicines under compulsory licenses, and lauds various initiatives by the United States, including the licensing of patents to the Medicines Patent Pool (MPP) and the highly dubious (and secret) work of the inter-agency trade policy staff committee, called “Trade Enhancing Access to Medicines” (TEAM).
Additionally, USTR works closely with other U.S. Government agencies to ensure consistency of U.S. trade policy objectives with other Administration policies. For example, as described in Section I of this Report, USTR has convened a new subcommittee of the interagency Trade Policy Staff Committee, called the “Trade Enhancing Access to Medicines” (TEAM), to investigate how to best deploy the tools of trade policy to further the Administration’s objective of promoting trade in, reducing obstacles to, and enhancing access to both innovative and generic medicines.
As noted in many commentaries from public health groups, the TEAM proposals to the TransPacific Partnership Agreement (TPPA), which USTR has only been shared in detail with big drug companies, seem to have been designed mostly with big drug companies in mind, focusing on such things as lowering tariffs on pharmaceutical products, and providing government incentives to register new drugs as soon as possible.
The USTR Special 301 report continues to disparage countries for taking measures to restrain drug prices or limit reimbursements on new medicines, and to demand the drug companies have better access to policy makers and their deliberations on reimbursement policies, and the right to overturn decisions unfavorable to the big drug companies.
Among the many areas of hypocrisy in the Special 301 Report is the extended support for the proposed 31.bis amendment to the TRIPS agreement on the export of medicines manufactured under compulsory licenses. Why is this hypocritical? Because the US has never amended its own patent law to allow such exports, and it uses a different and much more efficient part of TRIPS to authorize exports of medical (and other) technologies under compulsory licenses — Article 44 of the TRIPS.
Particularly important in terms of the supply of generic drugs is India, the country with the largest capacity and inclination to supply low cost medicines to the developing world. This was the USTR comment on health related IPR issues for India:
The United States continues to encourage India to promote a stable and predictable patent system that can nurture domestic innovation, including by resolving concerns with respect to the prohibition on patents for certain chemical forms absent a showing of increased efficacy. The United States recognizes India’s recent efforts to address its patent application backlog, and urges India to take additional steps in this regard. The United States also urges India to continue to work to streamline its patent opposition proceedings. The United States will closely monitor developments concerning compulsory licensing of patents in India following the broad interpretation of Indian law in a recent decision by the Controller General of Patents, while also bearing in mind the Doha Declaration on TRIPS and Public Health found in the Intellectual Property and Health Policy section of this Report. The United States urges India to provide an effective system for protecting against unfair commercial use, as well as unauthorized disclosure, of test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products.
Note that USTR is asking India to change its laws to require the granting of patents even when the inventions do not show “increased efficacy,” and to introduce TRIPS plus measures on the protection of pharmaceutical test data. By singling out the compulsory license on Nexavar, the Obama administration is sending the signal, again, that it does not want India to actually use its TRIPS flexibilities, despite all of the references to the Doha Declaration.
For more on the USTR Special 301 Reports, including the commentary on the 2012 report, see https://keionline.org/ustr/special301