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Wednesday, May 18, 2011

Global Status of IP Protection

Intellectual property is critical to U.S. economic growth - at home and internationally.

On the global front, the United States Trade Representative recently released the "2011 Special 301 Report." This annual report provides a review of intellectual property (IP) rights protection and enforcement around the world. Specifically, the report highlights notable concerns on the IP front, as reflected, for example, by the Special 301 Priority Watch List.

A dozen nations appear on this year's Priority Watch List. The report offers the following key points on each:

China. Among the concerns are the following:

1) "Piracy over the Internet in China continues to be a source of concern and injury to the copyright industries and the United States. It is estimated that there are 457 million Internet users in China, as compared with 223 million in the United States; when coupled with reports that 99% of all music downloads in China are illegal, the concerns of industry are understandable."

2) "China's global manufacturing capacity also extends to all phases of the production and global distribution of counterfeit goods. According to industry reports, the range of goods counterfeited in China includes apparel and footwear, mobile phones, pharmaceuticals and medical equipment, herbal remedies, wine and liquor, other beverages, agricultural chemicals, electronic components, computer and networking equipment, software and related products, batteries, cigarettes, cosmetics, home appliances, cement, and auto parts, as well as merchandise based on copyrighted works."

• Russia. A key challenge in Russia is enforcement. As noted in the report: "The United States ... urges Russia to strengthen its overall enforcement efforts, including criminal enforcement efforts, against piracy and counterfeiting. Enforcement continues to vary greatly among regions."

• Algeria. The U.S. is worried about "an Algerian law that bans numerous imported pharmaceutical products and medical devices in favor of local production," along with weak patent protection, and widespread copyright piracy and trademark counterfeiting.

• Argentina. While Argentina has made steps forward, "serious problems persist, including widespread availability of pirated and counterfeit goods, an inefficient judicial system, and a failure to adjudicate civil and criminal cases and impose deterrent level sentences."

• Canada. In terms of improving its legal framework for IP protections, unfortunately, "Canadian efforts in 2010 to enact long-awaited copyright legislation were unsuccessful."

• Chile. While acknowledging the progress Chile has made on the IP front, the U.S. is encouraging "Chile to implement its commitment to provide an effective system to address patent issues expeditiously in connection with applications to market pharmaceutical products, to implement protections against the circumvention of technological protection measures, to implement protection for encrypted program-carrying satellite signals, and to ensure that administrative and judicial procedures and deterrent remedies are made available to rights holders."

• India. The U.S. is concerned about a variety of areas when it comes to India and IP, including a weak overall legal framework, widespread optical disc piracy, and weak patent protections.

• Indonesia. Among the challenges on Indonesia, the U.S. highlights legal shortcomings: "The United States urges Indonesia to improve its enforcement efforts, to address problems that its prosecutorial and judicial systems confront, to provide deterrent penalties for IPR violations, and to encourage courts to impose those penalties."

• Israel. The primary emphasis on Israel is on patent protections in the pharmaceuticals industry. Specifically: "The United States and Israel reached the Understanding, which concerns several longstanding issues regarding Israel's regime for pharmaceutical products, on February 18, 2010." But key parts of the understanding have not yet been submitted in legislation.

• Pakistan. The U.S. brings attention to "widespread copyright piracy (including book piracy and piracy of software programs in enterprises), as well as trademark counterfeiting" in Pakistan.

• Thailand. The U.S. warned that "Thailand failed to make substantial progress on several key pieces of legislation that remain pending, including legislation to address landlord liability, legislation regarding unauthorized camcording of motion pictures in theaters, and legislation to provide Thai Customs officials with the authority to seize suspect goods absent a formal complaint by a rights holder."

• Venezuela. Concerns regarding Venezuela included copyright piracy and trademark counterfeiting. It is concluded: "Overall, the United States urges Venezuela to make significant improvements to its regime for IPR protection and enforcement.

However, all was not negative in the "Special 301 Report." For example, it's noted that in 2010 and early 2011, the U.S., Australia, Canada, the EU, Japan, Korea, Mexico, Morocco, New Zealand, Singapore and Switzerland finalized the text of the Anti-Counterfeiting Trade Agreement; and Mexico, the Philippines, Russia and Spain all passed legislation beefing up IP protections.

While all businesses benefit from enhanced IP protections and enforcement, it is clear that small businesses, given their limited resources and abilities compared to what large businesses can do in protecting IP, benefit the most when nations establish sound systems for protecting intellectual property.


Raymond J. Keating serves as chief economist for the Small Business & Entrepreneurship Council.

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