US Trade Rep Fingers Russia, China in Intellectual Property Report

Every year, global friends and foes of the United States await the publication of the Office of the U.S. Trade Representative's (USTR) Special 301 report on intellectual property (IP) protection overseas.

The report highlights areas of weakness in most of the major markets, which can range from lax enforcement of intellectual property laws to rampant software piracy and patent laws that do not conform with international norms.

This year, the USTR singled out two of the largest markets in the world in need of improvement: China and Russia. Each country, while certainly representing significant opportunity, also pose a certain amount of risk. USTR chose to highlight the latter, despite the improvements both markets have made.

The report's findings are "much of what we typically see," Richard Wynne, a partner with Thompson & Knight, told the E-Commerce Times. "The government continues to be suspicious concerning intellectual property rights (IPR) -- or lack thereof -- and the difficulty of American companies to obtain meaningful protection."

Industrial-Sized Theft

The USTR has put Russia on out-of-cycle review -- that is, it will be reviewing its progress before the next annual Special 301 report is due. The U.S. agency cites "large-scale production and distribution of IP-infringing optical media and minimally-restrained Internet piracy" as major problems that require more enforcement action.

Russia's bilateral agreement with the United States on the steps it would take in order to join the World Trade Organization (WTO) is something of a carrot to entice the country to implement new IP protection laws and step up enforcement of antipiracy laws.

The United States will be watching to see that Russia implements these commitments.

"I know that our Russian colleagues see the value of intellectual property to Russia's economy and are working hard to deliver on their commitments," said U.S. Trade Representative Susan C. Schwab. "I urge them to make the most of the coming weeks and months."

China a Continued Concern

It is little secret that the United States holds China' IP regime in dubious regard -- it recently filed two complaints with the WTO over China's trade policies, claiming the country is not doing enough to protect the intellectual property of U.S. software makers, movie studios and music labels.

"Our recent decision to pursue IPR-related concerns in China through consultations under WTO dispute settlement rules demonstrates our determination to defend vigorously American innovation," Schwab said.

Next Tier Concerns

In addition to China and Russia, the USTR also cited Argentina, Chile, Egypt, India, Israel, Lebanon, Thailand, Turkey, Ukraine and Venezuela as being on the Priority Watch List.

Of lesser concern, but still not able to boast of a completely unblemished record are Belarus, Belize, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Hungary, Indonesia, Italy, Jamaica, Korea, Kuwait, Lithuania, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Romania, Saudi Arabia, Taiwan, Tajikistan, Turkmenistan, Uzbekistan and Vietnam -- countries that are on USTR's Watch List.

In years past the USTR report has been avidly watched -- or protested, as the case may be -- in foreign markets when it was released. This year, more attention on it may be paid stateside, Wynne speculated. "I think in light of the Supreme Court's recent patent rulings and the clear sense that it is paying greater attention to these issues, it is bring the entire subject of intellectual property rights under a spotlight."