USTR Report Characterizes IP Protection Problem Nations
The U.S. Trade Representative released the annual Special 301 report Thursday, a list of nations whose intellectual property rights enforcement isn’t considered up to par, and reaction spanned from praise from industry and intellectual property groups to condemnation of the review process. The inclusion of Canada on the priority watch list alongside China, Russia, Venezuela and others was particularly noted. Twelve nations were placed on the priority watch list and 33 on the watch list.
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The Motion Picture Association of America, Entertainment Software Association and International Intellectual Property Alliance said Canada deserves a spot on the list because of its failure to change its laws in accordance with the World Intellectual Property Organization Internet treaties. “Canada remains woefully behind the rest of the developed world (and many countries in the developing world as well) in adopting critical legislation that will facilitate the development of a healthy online marketplace,” said Eric Smith, IIPA co-founder, in a statement.
But Canadian law professor Michael Geist in his blog called the addition of Canada to the list a “legally dubious decision” and said even IIPA’s own statistics show that Canada has the lowest software piracy rate of any of the nations on either the priority watch or watch lists. The IIPA press release includes a chart of business software piracy rates from the Business Software Alliance, which report rates as high as 86 percent in Indonesia, rates above 60 percent for most countries on either list, and a rate of 32 percent for Canada. Estimated dollar losses in Canada of $742 million put it sixth among the list countries, according to the alliance statistics. Geist said it’s time for Canada to take a more aggressive approach. “It is not enough to say that the Special 301 process is unreliable and lacks objectivity. Canadian officials must counter claims that Canada -- which is compliant with its international obligations and has been a major partner for the U.S. on international IP matters -- should be included at all,” he wrote.
Internet piracy is a “significant concern” in several countries, the USTR report said, as is unauthorized retransmission of live sporting events over the Internet. It praised China for its crackdown of unauthorized retransmission during the Beijing Olympics, saying the effort led to 453 online infringement cases, 192 sites shut down and possible criminal prosecution tied to 10 sites. “This experience shows that when the Chinese Government chooses to exercise its political will to deal with an IPR problem, it can yield results,” the report said. Yet China remained at the top of the priority watch list, with USTR citing “unacceptably high” levels of piracy and counterfeiting, thresholds for criminal prosecution that are too high, administrative fines and civil damages that are too low and local protectionism and corruption. The report said USTR will review the strengths, weaknesses and inconsistencies of China’s provincial and municipal governments.
Russia also has an “acute problem” with online piracy, the report said. Sites that are shut down for offering pirated music are quickly replaced, it said. “Complicating this situation are certain rogue ‘collecting societies’ that negotiate ‘licenses’ with these Internet sites, despite not having any authority to issue such licenses,” the report said.
Other countries appearing on the priority watch list are Algeria, Argentina, Chile, India, Indonesia, Israel, Pakistan, Thailand and Venezuela. The report also names “notorious markets” and encourages authorities to increase enforcement. The online markets include Baidu in China, which the report said is associated with 50 to 75 percent of illegal music downloads, according to industry sources. Business-to-business and business-to-consumer Web sites in China offer infringing products and clones of Allofmp3 in Russia, a site shut down in 2007, offer illegal distribution of copyrighted material, the report said.