List of Countries That Earned Failing Grades in IP Protection

Which Countries Earned Failing Grades in IP Protection?

When it comes to safeguarding intellectual property, some countries do it better than others. In its annual report, the U.S. Trade Representative (USTR) recently flagged several U.S. trading partners that are failing to adequately protect or even acknowledge IP rights of owners.

According to the report, intellectual property right (IPR) protection, enforcement, and market access for persons relying on IPR is declining in several countries. The “Priority Watch List” includes Algeria, Argentina, Chile, China, India, Indonesia, Kuwait, Russia. Thailand, Ukraine, and Venezuela.

Who was Reviewed?

In total, the U.S. Trade Office reviewed 72 trading partners in its 2016 Special 301 Report. The lower-level watch list includes 23 countries: Barbados, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Peru, Romania, Switzerland, Turkey, Turkmenistan, Uzbekistan and Vietnam.

China and India are frequently on the USTR’s watch list, with China earning a spot in each of the 27 years the report has been issued. While the Section 301 Report notes that China has implemented a series of IP reforms, it also states:

[P]rogress toward effective protection and enforcement of IPR in China is undermined by unchecked trade secret theft, market access obstacles to ICT [information and communications technology] products raised in the name of security, measures favoring domestically owned intellectual property in the name of promoting innovation in China, rampant piracy and counterfeiting in China’s massive online and physical markets, extensive use of unlicensed software, and the supply of counterfeit goods to foreign markets.

More from Section 301

The Section 301 Report also acknowledges that India has worked to strengthen its IP laws. However, it also raised a number of new concerns, including India’s proposed Patent Rule Amendments. According to the USTR, the proposed patent law changes would “introduce concerning new incentives to pressure patent applicants to localize manufacturing in India and require the submission of sensitive business information to India’s Patent Office.”

The Section 301 Report also highlights several other issues of particular concern to the U.S. pharmaceutical industry. They include:

• irregularities in the application of Section 3(d) of India’s Patents Act;
• the lack of an effective system for protecting against unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products;
• the lack of an effective system for notifying interested parties of marketing approvals for generic pharmaceuticals in a manner that would allow for the early resolution of potential patent disputes.

Finally, the most surprising addition to the IP watch list is Switzerland. According to the report, the country earned a spot of the list due to U.S. concerns regarding Switzerland’s system of online copyright protection and enforcement.

In Conclusion

…businesses and owners of creative works must take a number of factors into consideration prior to entering a new market, including intellectual property protection.

As mentioned in the report, a 2010 ruling by the Swiss Federal Supreme Court prohibited an anti-piracy company from tracking copyright trolls and effectively deprived copyright holders in Switzerland of the means to enforce their rights against online infringers. Since the decision, Switzerland has become an increasingly popular host country for infringing websites.

As the report highlights, New Jersey businesses and owners of creative works must take a number of factors into consideration prior to entering a new market, including intellectual property protection. While the global economy provides a number of new opportunities for small businesses, future success can be impacted by the ability to secure international protection of their patents, trademarks, copyrights, and trade secrets.

Do you have questions about this topic or would like to discuss your intellectual property or entertainment needs? Please contact me, Ron Bienstock.