Special 301 Report 2010
  Priority Watch List
  Watch List
  Section 306 Monitoring
  Status Pending

The 'Special 301 Report', or simply 'Special 301', is a document prepared annually by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988. The Report identifies international treats to the intellectual property (IP) of US companies, individuals, and products, such as copyright works, patents and trademarks. First appearing in 1989, the Reports list countries of note in three tiers of declining concern: the Priority Foreign Countries, the Priority Watch List, and the Watch List. As of the 2011 report, there were 12 countries on the Priority Watch List, and 28 on the Watch List. No country has appeared as a Priority Foreign Country since 2005.

Once a short document containing only these lists, the Report has since grown to include a much more thorough briefing and analysis of international trends in intellectual property, as well as developments in individual countries. Each year, the USTR sends out a call for submissions, receiving input from lobbying groups, NGOs, and individuals before preparing the annual report. In 2010, there were submissions from over 700 sources, including PhRMA, Oxfam, and MSF.


Report and investigation mechanism

Under Section 301 of the amended Trade Act of 1974 the USTR must by April 30th fo each year:

"identify (1) those foreign countries that (A) deny adequate and effective protection of intellectual property rights, or (B) deny fair and equitable markets access to United States persons that rely upon intellectual property protection, and (2) those foreign countries identified under paragraph (1) that are determined by the Trade Representative to be priority foreign countries".[1]

The Act defines "priority foreign countries" as:

"those foreign countries - (A) that have the most onerous or egregious acts, policies, or practices that (i) deny adequate and effective intellectual property rights, or (ii) deny fair and equitable market access to United States persons that rely upon intellectual property protection, (B) whose acts, policies, or practices described in subparagraph (A) have the greatest adverse impact (actual or potential) on the relevant United States products, and (C) that are not (i) entering into good faith negotiations, or (ii) making significant progress in bilateral or multilateral negotiations to provide adequate and effective protection of intellectual property rights".[2]

The Uruguay Round Agreement Act furthermore states that countries may be identified under Special 301 "taking into account the history of intellectual property laws and practices of the foreign country, including any previous identifications" and "the history of efforts of the United States, and the response of the foreign country, to achieve adequate and effective protection and enforcement of intellectual property rights". It also states that compliance with the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not preclude a country from being identified as denying "adequate and effective protection of intellectual property rights".[3]

The USTR acts on the information available at the time and can identify new "priority foreign countries" on an annual basis. The Special 301 Sub-Committee of the Trade Policy Staff Committee conducts additional reviews throughout the year for countries that "merit additional monitoring". The Trade Act of 1974 requires that the USTR must start investigations within 30 days of a country being identified as "priority foreign country", unless the USTR concludes that such an investigation "would be detrimental to United States economic interests". Unless the "priority foreign country" is regarded as being in breach of a trade agreement, including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), investigations must conclude within six months, with the possibility of a three months extension.[4] Reasons for extension include "substantial progress in drafting or implementing legislative or administrative measures that will provide adequate and effective protection of intellectual property rights" by the "priority foreign country".[5] If the USTR believes that a trade agreement is being breached the USTR must conclude the investigation within 18 months, or within 30 days after the "dispute settlement procedure" has finished. If the USTR concludes that a trade agreement is being breached, "retaliation actions" may be taken under Section 301 of the Trade Act of 1974.[6]

Contents of the Report

The Report at one time was devoted primarily to the three-tiered country designation, but has since come to include much more in-depth information on international trends in IP transgression and protection. Still, the lists are the aspect of the Report which carry the most weight. National governments all over the world pay strict attention to their status. In fact, the Report has in the last few decades acquired a reverence somewhat disproportionate to its actual power.

Priority Foreign Countries

As noted above, there are currently no countries listed in this section. The last country to feature on the list was Ukraine, who remained there from 2001 to 2005 for failing to provide adequate protection for optical discs. Ukraine has since enacted satisfactory legislation and improved its enforcement of optical disc 'piracy', but it remains in the Report for other considerations, downgraded in threat first to a Priority Watch Country in 2006, and then to a Watch List country in 2008.

Priority Watch List and Watch List Countries

Alongside the Priority Foreign Country designation, the Report also lists two subgrades, the Priority Watch List and Watch List. As of 2011, there were 12 and 28 countries on each of these lists, respectively. Unlike the Priority Foreign Countries, for these countries there is no threat of trade sanctions on the part of the US government. However, the list entries are still very influential in foreign trade policy, and indicate a strong effort on the behalf of negotiators (both in the WTO and outside of it) to motivate these countries to better protect American IP. Some of these entries are quite extensive (the entry for China covers at present more than six pages), while others are only a paragraph or two. The size and depth of these entries has increased dramatically since 1989.

Other Sections

Retaliation Under Special 301

In response to countries being included on the Special 301 Report Watchlists the US Government may initiate dispute settlement proceedings at the World Trade Organisation (WTO) or other relevant trade agreement, including the North American Free Trade Agreement (NAFTA). The US Government can also eliminate tariff preferences unilaterally granted, such as the Generalized System of Preferences (GSP).[7]

If the US investigation concludes that a country has violated a trade agreement Section 301 of the Trade Act of 1974 allows the US Government to impose unilateral trade sanctions if the country is not member of the World Trade Organisation (WTO) or any other trade agreement establishing dispute settlement provisions, such as free trade agreements, which are relevant to the alleged violation. Unilateral trade sanctions under section 301 were imposed on December 20, 2001 on the Ukraine by imposing a prohibitive tariff on metals, footwear and other imports because the USTR concluded that the country had failed to enact legislation to enforce copyright in relation to music Compact Discs (CDs) and the export of these CDs.[8]

Priority Watch List and Watch List Countries

Two non-statutory categories have been created in addition to the statutory category of "priority foreign country", which once identified as such needs to be investigated and if found in breach with a trade agreement is subject to possible "retaliation actions" under Section 301 of the Trade Act of 1974. "Priority Watch List" and "Watch List" countries are identified by the annual Special 301 Report. "Priority Watchlist countries" are judged by the USTR as having "serious intellectual property rights deficiencies" that require increased USTR attention. "Watch List" countries have been identified by the USTR as having "serious intellectual property rights deficiencies" but are not yet placed on the "Priority Watchlist". The USTR can move countries from one list to the other, or remove them from the lists, throughout the year.[9]

WTO dispute settlement proceedings

The USTR has used the Special 301 Reports to initiate formal dispute settlement proceedings at the World Trade Organisation (WTO) if it believes a country does not comply with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). WTO dispute settlement proceedings are initiated when the country's noncompliance with TRIPS is judged to be too narrow to make the country a "priority foreign country". The countries against which the USTR intends to pursue dispute settlement proceedings are announced every April in the Special 301 Report.[10]

Special 301 Sub-Committee

The Special 301 Sub-Committee of the Trade Policy Staff Committee (TPSC) advices the US Trade Representative on which countries to designate as "priority foreign countries" or to include in the Watchlists. The Special 301 Sub-Committee is chaired by the Office of the United States Trade Representative (USTR) and its members include the Department of Commerce, the Patent and Trademark Office, the Department of State, the Department of Health and Human Services, the Department of Agriculture, the Copyright Office, the Council of Economic Advisers, and other agencies. US companies provide extensive comments in the annual National Trade estimates Report. The Special 301 Sub-Committee also takes the views of foreign governments and the views of US embassies on intellectual property rights.[11]

Complaints by US companies

US companies and intellectual property owners, including copyright, patents and trademarks, can submit complaints to the Trade Compliance Centre, which provides a template for such complaints, or the country or industry desk at the International Trade Administration (ITA) of the US Department of Commerce. the ITA then reviews trade related complaints with co-operation from the Office of General Counsel and the US Patent and Trademark Office. The complaint can not be in relation to disputes between companies on intellectual property rights, but must be about instances were a country has violated an international agreement with the United States. Complaints can be made in relation to the intellectual property law of the country, judicial or administrative procedures that discriminate against the US company, and failure to enforce intellectual property laws, particularly in relation to trade in counterfeit goods, and lately online copyright infringement. Complaints do not need to references specific international agreements or provisions that are being breached. Complaints will focus on a country's failure to protect the intellectual property rights of a US company or lack of intellectual property rights relates market access. Complaints are expected to include a description of the efforts the company has made to enforce its intellectual property rights in that country and provide estimates of economic losses resulting from the infingement of intellectual property rights in that country.[12]

Most countries included in the Priority Watch List and Watch List between 1996 and 2000 were requested by Pharmaceutical Research and Manufacturers of America or International Intellectual Property Alliance.[13] According to Andres Guadamuz from the University of Edinburgh the International Intellectual Property Alliance (IIPA) representing the US media industry were urging the United States government to consider countries like Indonesia, Brazil and India to be put on the Special 301 Watchlist in early 2010. The IIPA requested them to be put on the Watchlist because they mandated or suggested the use of open source software.[14]

Impact of Special 301 Reports

According to the International Intellectual Property Alliance (IIPA) the Special 301 Report and the Watchlists is used to pressure other nations to adopt stricter copyright laws and take a more active role in combating Copyright infringements.[15]

Criticism

Lobby power

Peter Drahos has called the Special 301 Report "a public law devoted to the service of private corporate interests." [16] It explicitly protects and acts in favour of US intellectual property owners, most often large corporations, against any foreign national policy or unofficial action that does not conform, even in its domestic legislation, to the United States' position on international copyright and IP. Threat of action under Special 301 has been used to insert US trade lobby backed advisers into states' domestic legislative process in order to ensure compliance with US trade norms. One of the most direct examples comes from a former US trade lobbyist, speaking in 1993:[citation needed]

"Jamaica had no intellectual property law, but they wrote one (with our help). Similarly the Dominican Republic. I sat down with their lawyer and together we wrote their copyright law." [17]

Such methods of drafting national-level legislation inevitably raise questions about undue influence from the private sector. Lobbyists for the IP industry have been successful in their efforts to secure legal backing in foreign countries to already existing regimes such as TRIPS, and private corporations are now able to act as watchdogs to foreign national legislation on behalf of the US government.[citation needed]

Cultural restriction and imperialism

Special 301 allows for a process that sends a warning to countries that are not co-operating with international copyright norms (read: US norms), and in extremis allows the USTR to initiate "retaliatory action" such as trade sanctions. Such actions may qualify as forced compliance with a norm that may not be part of the target country's cultural composition in the first place, leading to claims of cultural imperialism, since it restricts normal practices by threat of use of economic force.[citation needed]

See also

References

  1. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 18-19. ISBN 9781590313596.
  2. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 19. ISBN 9781590313596.
  3. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. pp. 18–19. ISBN 9781590313596.
  4. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 19. ISBN 9781590313596.
  5. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. pp. 19–20. ISBN 9781590313596.
  6. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 20. ISBN 9781590313596.
  7. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. pp. 20–21. ISBN 9781590313596.
  8. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. pp. 20–21. ISBN 9781590313596.
  9. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 20. ISBN 9781590313596.
  10. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 20. ISBN 9781590313596.
  11. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. p. 20. ISBN 9781590313596.
  12. ^ Masterson, John T. (2004). International trademarks and copyright: enforcement and management. American Bar Association. pp. 21–22. ISBN 9781590313596.
  13. ^ Sell, Susan K. (2003), Private Power, Public Law, Cambridge University Press, pp. 126–129
  14. ^ When using open source makes you an enemy of the state, Bobbie Johnson, guardian.co.uk, 23 February 2010.
  15. ^ IIPA, February 18. 2010 Copyright Industries Urge Greater Global Protection of American Jobs and Exports Threatened by Piracy
  16. ^ Peter Drahos, Information Feudalism, The New Press, 2002, p89
  17. ^ Peter Drahos, Information Feudalism, The New Press, 2002, p87

External links

Categories