Intellectual Property Excerpts from USTR's 2010 National Trade Estimate Report on Foreign Trade Barriers

Mike Palmedo
April 30, 2010

Yesterday, the U.S. Trade Representative (USTR) published the 2010 National Trade Estimate Report on Foreign Trade Barriers (NTE).  This is an annual review required by law that includes tariffs and all types of non-tariff barriers to trade. For each country or region listed in the review, it includes a section on intellectual property.  This blog excepts the IP sections.


 

Angola

Although Angolan law provides basic protection for IPRs and the National Assembly is working to
strengthen existing legislation, IPR protection remains weak due to a lack of enforcement capacity.
However, government officials have made efforts to confiscate and destroy pirated goods. In September
2008, Angola’s Economic Police burned 2.5 tons of medicines, CDs, and DVDs in a public event aimed
at curbing the sales of pirated merchandise in Angola. However, there were no reports of Angola
conducting similar destructions of pirated material in 2009. According to Angola’s National Department
for the Protection of Intellectual Property Rights, the owners of the pirated goods were sentenced to up to
six months in jail or fined approximately 110,000 Kwanza (approximately $1,500). The government has
also worked with international computer companies on anti-piracy measures. No suits involving U.S.
intellectual property are known to have been filed in Angola.

Argentina

Argentina was listed on the Priority Watch List in the 2009 Special 301 report. Key concerns cited in the
report relate to strengthening IPR enforcement actions to combat the widespread availability of pirated
and counterfeit products. Although cooperation has improved between Argentina’s enforcement
authorities and the U.S. copyright industry, and the Argentine Customs authority has taken steps to
improve enforcement, stronger IPR enforcement actions to combat the widespread availability of pirated
and counterfeit products is needed. Civil damages have not proven to be a deterrent to piracy and
counterfeiting, and in criminal cases the judiciary is reluctant to impose strong penalties, such as prison
sentences. In addition, Argentina does not provide adequate protection against unfair commercial use of
undisclosed test and other data generated to obtain marketing approval for pharmaceutical products and
lacks an effective system to prevent the issuance of marketing approvals for unauthorized copies of
patented pharmaceutical products.

Australia


Australia generally provides strong IPR protection and enforcement. However, some copyright holders
complain that convictions for criminal copyright piracy tend to result in insufficient penalties, which
undermines the goal of deterrence.

In 2008, Australia began a review of penalties and additional damages in its Trademark Act. An issues
paper in February 2009 noted that penalties for criminal trademark offenses are significantly lower than
for copyright offenses (two years compared to five years) and recommended that these penalties be
brought into alignment with copyright penalties. The report also recommends that additional damages
should be provided in civil cases for willful trademark infringement.

Bahrain

In the FTA, Bahrain committed to provide strong IPR protection and enforcement. Bahrain passed IPR
legislation and regulations to implement these commitments in the areas of copyrights, trademarks,
patents, and enforcement, among others.

As part of the GCC Customs Union, the six Member States are preparing a common trademark law, as
well as a common unfair competition law to protect from unfair commercial use undisclosed information
submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to ensure that the trademark law and unfair competition law will facilitate Member States’ implementation of international and bilateral obligations.

Bolivia

Bolivia was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report
relate to the rampant piracy of software, music and movies, and counterfeiting, including counterfeiting of
medicines, that persist in Bolivia. There are also concerns about the erosion of intellectual property
protection for pharmaceutical products.

Brazil

Brazil was listed on the Watch List in the 2009 Special 301 report. While Brazil has made important
progress in enhancing the effectiveness of intellectual property enforcement, particularly with respect to
pirated audiovisual goods, some areas of IPR protection and enforcement continue to represent barriers to U.S. exports and investment. Key issues cited in the report include concerns regarding IPR enforcement, including the need to increase raids and seizures of pirated and counterfeit products, and increase actions against book and Internet piracy. The United States has also raised concerns regarding patent protection for pharmaceuticals and medical devices, including with respect to the role of Brazil’s health authority (ANVISA) in the patent application process; inadequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for human-use pharmaceutical products; and an inter-ministerial decision against granting patents for polymorphs and second-use inventions. Implementation of that decision would require a change to Brazil's patent law. Though not yet enacted, a bill has been introduced in the Chamber of Deputies; in the interim, the Brazilian patent and trademark office (INPI) continues to evaluate polymorph and second-use applications on a case by case basis.

Brunei Darussalam

Brunei was listed on the Watch List in the 2009 Special 301 report, primarily because of high copyright piracy rates in Brunei. Movie and software piracy remains rampant in Brunei’s marketplace. Pirated optical discs and unlicensed software are openly sold in legitimate retail shops and department stores throughout Brunei. While enforcement has been a longstanding issue, Brunei enforcement authorities undertook several raids in August 2009 in connection with a Recording Industry Malaysia (RIM) music anti-piracy campaign that has been conducted in cooperation with the government. Those raids have had an immediate effect in reducing music piracy in Brunei, though the long term effect of these actions – and the government’s willingness to prosecute the violators – is still to be determined. Another concern relates to the long delay in Brunei’s drafting of amendments to the copyright law. The amendments would provide police with ex officio authority to take action against pirated products, but the amendments, first drafted several years ago, have not yet been finalized.

Cambodia

Cambodia has made progress in implementing the WTO Trade-Related Aspects of Intellectual Property
Rights (TRIPS) Agreement, but effective enforcement of IPR remains problematic. Pirated CDs, videos,
software, and other copyrighted materials are reported to be widely available in Cambodian markets.
Additionally, while the 1996 United States-Cambodia Bilateral Trade Agreement contained a broad range
of IPR commitments that were to be phased in, Cambodia has not yet enacted legislation regarding, for
example, encrypted satellite signals and semiconductor layout designs. Work also remains ongoing on
draft legislation to implement commitments with respect to the protection of trade secrets.

Canada

Canada was elevated to the Priority Watch List in the 2009 Special 301 report. Key concerns cited in the report relate to Canada’s failure to implement key copyright reforms, its weak border enforcement system, and its failure to implement the World Intellectual Property Organization (WIPO) Internet Treaties, which Canada signed in 1997. The United States continues to urge Canada to enact legislation in the near term to strengthen its copyright laws and implement these treaties. The United States also urges Canada to implement legislative changes to provide for a stronger border enforcement system by giving its customs officers the authority, without the need for a court order, to seize products suspected of being pirated or counterfeit. Canada’s IPR enforcement regime would also benefit from the provision of greater resources and training to customs officers and domestic law enforcement personnel.

Chile

Chile was listed on the Priority Watch List in the 2009 Special 301 report. Key concerns highlighted in
the report included inadequate enforcement against copyright piracy and trademark counterfeiting,
inadequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products, the need to enact legislation to ratify the 1991 Act of the International Convention for the Protection of New Varieties of Plants and the Trademark Law Treaty, and the need to improve certain aspects of the copyright law. In October 2009, the Chilean legislature passed a bill amending its copyright law. However, the legislation appeared to lack key provisions implementing FTA commitments regarding Internet Service Provider (ISP) liability and copyright infringement on the Internet. On December 10, 2009, President Bachelet issued comments on the bill and sent it back to the legislature for further deliberation. On January 13, 2010, the Chilean Congress approved some of the comments submitted by President Bachelet, but rejected others, specifically some provisions related to limitations on secondary liability of ISPs for copyright infringement by their users. The bill was then sent for final administrative processing before becoming law. The U.S. Government is reviewing the legal effect of the final legislation.

In 2009, the United States and Chile held several meetings to exchange information and review
implementation of the IPR provisions of the FTA IPR Chapter. In 2010, the United States will continue
to work with Chile to improve IPR enforcement and to ensure that Chile is meeting its FTA commitments.

China

China was listed on the Priority Watch List in the 2009 Special 301 report because of continuing concerns
regarding IPR protection and enforcement. Key concerns listed in the report included unacceptable
levels of retail and wholesale counterfeiting, as well as persistently high-levels of book and journal piracy,
end-user piracy of business software, and copyright piracy over the Internet. The report describes these
enforcement-related concerns and summarizes the legal difficulties right holders face when attempting to
assert their IPR rights in China. The lack of deterrent penalties and other policies, such as barriers to the
market for legitimate products, contribute to the poor record on reducing IPR crime in China. The report
also recognizes industry concerns about the possibility that laws or policies in a variety of fields might be
used to unfairly favor domestic intellectual property (IP) over foreign IP, including procurement preferences for products with domestically developed IP, the treatment of IPR in setting standards, and
reports that officials, apparently motivated by the financial crisis and the need to maintain jobs, are urging more lenient enforcement of IPR laws.

The United States continues to urge China to provide stronger protection against unfair commercial use of undisclosed test and other data submitted by foreign pharmaceuticals companies seeking marketing
approval for their products. The United States has also encouraged China to implement an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products. In addition, built-in delays in China’s marketing approval system for pharmaceuticals and inadequate regulatory oversight of the production of active pharmaceutical ingredients by domestic chemical manufacturers continue to create incentives for counterfeiting.

The JCCT IPR Working Group meetings held in October 2009 featured constructive dialogue on the
intellectual property regimes of both countries. Following these meetings, China made commitments at
the JCCT meeting held later that month to impose maximum administrative penalties, including the
revocation of business licenses, in cases of Internet piracy, and to work with the United States to ensure
that the Ministry of Culture’s prescreening requirements for sound recordings do not hamper the
distribution of legitimate copies online. China also announced that it had issued a notice stressing the
importance of complying with all copyright laws, especially with respect to electronic journals, in
state-run and academic libraries.

A troubling trend that has emerged, however, is China’s willingness to encourage domestic or “indigenous” innovation at the cost of foreign innovation and technologies. For example, as noted below in the Government Procurement section, in November 2009, China issued the Circular on Launching the 2009 National Indigenous Innovation Product Accreditation Work with the aim of improving “indigenous” innovation in computer and other technology equipment. In order to qualify as “indigenous” innovation under the accreditation system, and therefore be entitled to procurement preferences, a product’s intellectual property must originally be registered in China.

Another example of this broad trend is the draft Regulations for the Administration of the Formulation
and Revision of Patent-Involving National Standards that the Standardization Administration of China
(SAC) released for public comment in November 2009. These proposed regulations have raised a
number of concerns regarding their expansive scope, the feasibility of certain patent disclosure
requirements, and the undermining of IP rights through possible compulsory licensing of essential patents included in national standards. If adopted in their current form, these provisions may have the
unintended effect of undermining the incentives for innovation and, by discouraging right holders from
participating in the development of standards in China, depriving the standard setting process of
potentially superior technology. The United States has provided comments on the draft regulations and
has suggested that SAC defer implementation in favor of proceeding with additional consultations to
assess the situation.

On October 1, 2009, the Third Amendment to China’s Patent Law, passed in December 2008, went into
effect. While many areas of the Patent Law were clarified and improved, right holders have raised a
number of concerns about the new law and implementing regulations. The United States will be closely
following implementation of these measures in 2010.

With respect to copyright piracy and trademark counterfeiting, weaknesses in China’s enforcement
system – criminal, civil, and administrative – contribute to China’s poor IPR enforcement record. The
United States sought to resolve specific concerns about China’s high legal thresholds for criminal
enforcement along with other concerns regarding weaknesses in China’s laws concerning border
enforcement and the denial of copyright protection and enforcement to creative works that are awaiting or
have not received Chinese censorship approval. When bilateral attempts to address these concerns did
not succeed, the United States requested WTO dispute settlement consultations in April 2007. A WTO
panel was composed to hear the dispute in December 2007, and it circulated its decision in January 2009, finding for the United States on two out of three claims, and clarifying important legal principles related to the third claim. Neither China nor the United States appealed the panel’s decision, and China has agreed to bring its measures into compliance with the WTO’s findings by March 2010. The United
States is monitoring China’s implementation process.

An exacerbating factor contributing to China’s poor IPR protection has been China’s maintenance of
restrictions on the right to import and distribute legitimate copyright-intensive products, such as theatrical
films, DVDs, music, books, newspapers, and journals. These restrictions impose burdens on legitimate,
IPR-protected goods and delay their introduction into the market. These burdens and delays faced by
legitimate products create advantages for infringing products and help to ensure that those infringing
products continue to dominate the markets within China. As discussed above in the sections on Trading
Rights and Distribution Services, the United States raised these restrictions in another WTO dispute filed
in April 2007. In August 2009, a WTO panel ruled in favor of the United States on all significant issues,
and the WTO’s Appellate Body rejected China’s subsequent appeal on all counts in December 2009.

Colombia

Colombia was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report
relate to the need for further IPR improvements, including actions to reduce book and optical media
piracy and the lack of an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products. While enforcement has been slow and weak in Colombia, the Colombian government has made a concerted effort in recent years to combat IPR violations, including through conducting raids seizing counterfeit and pirated products and deterring the
counterfeiting of pharmaceuticals.

Costa Rica

Costa Rica was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the report
included the need to assign higher priority to, and allocate greater resources for, combating piracy and
counterfeiting, and the need to seek deterrent penalties. During 2009, the U.S. Government worked with
the Costa Rican government on the latter’s efforts to meet its commitments to make certain changes to its IPR laws and to ensure that effective regulations on agricultural chemicals are in place.

The CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of
IPR, including protections for patents, trademarks, undisclosed test and other data submitted to obtain
marketing approval for pharmaceuticals and agricultural chemicals, and digital copyrighted products such
as software, music, text, and videos; and further deterrence of piracy and counterfeiting. To implement its CAFTA-DR IPR obligations, Costa Rica undertook legislative reforms providing for stronger IPR
protection and enforcement. The United States will continue to monitor Costa Rica’s implementation of its IPR obligations under the CAFTA-DR.

Democratic Republic of the Congo

In theory, intellectual property receives full legal protection in the DRC under the 2006 DRC Constitution, but enforcement of IPR regulations is weak. Pirated books, sound recordings, and visual media are readily available. Privately owned television stations in Kinshasa routinely broadcast U.S. films apparently without securing exhibition rights from the owners. The government is also unable to prevent most pirated goods from being imported into the country or their subsequent distribution and sale. However, the government is working to improve IPR related legislation and build its capacity for implementation and enforcement, and DRC officials have participated in several U.S. government sponsored training programs organized by the U.S. Patent and Trademark Office.

Dominican Republic

The Dominican Republic was listed on the Watch List in the 2009 Special 301 report. Key concerns cited
in the report included the need to enhance its IPR enforcement efforts by providing resources for and
greater coordination between law enforcement entities.

The CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of
IPR, including protections for patents, trademarks, undisclosed test and other data submitted to obtain
marketing approval for pharmaceuticals and agricultural chemicals, and digital copyrighted products such
as software, music, text, and videos; and further deterrence of piracy and counterfeiting. To implement its CAFTA-DR IPR obligations, the Dominican Republic undertook legislative reforms providing for
stronger IPR protection and enforcement. The United States will continue to monitor the Dominican Republic’s implementation of its IPR obligations under the CAFTA-DR.

Ecuador

Ecuador was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report
included: weak enforcement of intellectual property rights; lack of effective protection against unfair
commercial use of undisclosed test or other data generated to obtain marketing approval for
pharmaceutical products; and lack of an effective system to prevent the issuance of marketing approvals
for unauthorized copies of patented pharmaceutical products. Although Ecuador has established special
IPR units that conduct investigations and executes seizures of pirated and counterfeit products, overall
IPR enforcement in Ecuador remains seriously inadequate, resulting in high piracy levels in the software,
publishing, recording, and film industries. Ecuador’s Intellectual Property Institute (IEPI), assisted by a
U.S. Agency for International Development program, has reduced its backlog of applications to register
trademarks, decreasing the average time to register a trademark from two years to three months.
Trademark and patent archives have been digitized, and IEPI is working to fully automate the application
process.

In 2009 President Correa signed two presidential decrees regarding compulsory licenses, one for patented pharmaceutical products, and the other for agricultural chemical products. No compulsory licenses had been issued by the Ecuadorian government as of December 2009. The U.S. Government will continue to monitor developments in this area.

Egypt

Although Egypt has improved its IPR regime, the United States still has significant concerns about IPR
protection and enforcement in Egypt. The Egyptian government has made progress in strengthening
some IPR laws and enforcement procedures, and engagement between the United States and Egypt on
IPR issues is ongoing.

The United States was encouraged by the Egyptian government’s introduction in 2008 of a new
streamlined drug registration procedure, although the United States continues to monitor the full
implementation of this system. The United States continues to seek written clarification that Egypt’s
Ministry of Health and Population provides adequate and effective protection against reliance on test and
other data submitted for marketing approval of pharmaceutical products, and will continue to raise this
issue in discussions with Egyptian IPR officials.

The U.S. copyright industry continues to report high levels of piracy of movies, sound recordings, printed
material, and computer software in Egypt, but significant improvements have been made particularly with
respect to improving protection of computer software and ensuring that civilian government departments
and schools use legitimate software. The establishment in 2008 of special economic courts, which handle
IPR cases with specially-trained judges, has also been a major reform.

El Salvador

The CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of
IPR, including protections for patents, trademarks, undisclosed test and other data submitted to obtain
marketing approval for pharmaceuticals and agricultural chemicals, and digital copyrighted products such
as software, music, text, and videos; and further deterrence of piracy and counterfeiting.

To implement its CAFTA-DR IPR obligations, El Salvador undertook legislative reforms providing for
stronger IPR protection and enforcement. Despite these efforts, the piracy of optical media, both music
and video, in El Salvador remains a concern. Optical media imported from the United States into El
Salvador are being used as duplication masters for unauthorized copies of copyrighted works. The United
States has expressed concern to the Salvadoran government about inadequate enforcement of cable
broadcast rights and the competitive disadvantage it places on legitimate providers of this service. The
United States will continue to monitor El Salvador’s implementation of its IPR obligations under the
CAFTA-DR.

Ethiopia

The Ethiopian Intellectual Property Office (EIPO) is responsible for the administration of patents,
trademarks, copyrights, and has competence in intellectual property policy. In the past few years,
Ethiopia has enacted a series of new laws regarding copyright and related rights, plant varieties, and
trademarks. In July 2008, EIPO confiscated and destroyed close to half a million pirated copies of locally
produced songs and films in Addis Ababa. EIPO focuses mainly on protecting Ethiopian copyrighted
materials and pirated software, and has taken virtually no action to confiscate or impede the rampant sale of pirated foreign works in Ethiopia.

Trademark infringement of major international brands appears to be widespread in Ethiopia. The lack of
government registration requirements and enforcement capacity leave the government in a position of
only responding to formal IPR challenges brought to Ethiopia’s Competition Commission.

European Union

The EU and its Member States generally support strong protection for intellectual property rights (IPR).
However, U.S. industry has concerns regarding the implementation of key provisions of the EU IPR
Directives and overall IPR protection in some Member States (see Member State discussion below).
In recent years, the European Commission issued communications on strengthening the criminal law
framework to combat intellectual property infringement, and undertook a renewed effort to introduce an
EU-wide patent, known as a Community patent. Despite the fact that patent filing costs have decreased in the EU, patent filing and maintenance fees in the EU and its Member States remain significantly higher
than in other countries, including the United States.

In December 2009, the EU ratified the World Intellectual Property Organization (WIPO) Copyright
Treaty (WCT) and the Performances and Phonograms Treaty (WPPT) – collectively known as the “WIPO
Internet Treaties.” This marks a significant step forward for international norms to protect IPRs,
particularly with regard to Internet-based delivery of copyrighted works.

The United States continues to have concerns about the EU’s system for the protection of Geographical
Indications (GIs). In a WTO dispute launched by the United States, a WTO Panel found that the EU
regulation on food-related GIs was inconsistent with EU obligations under the TRIPS Agreement and
GATT 1994. In its 2005 report, the Panel determined that the EU regulation impermissibly discriminated
against non-EU products and persons, and agreed with the United States that the EU could not create
broad exceptions to trademark rights guaranteed by the TRIPS Agreement. In response to the DSB’s
recommendations and rulings, the EU published an amended GI regulation, Council Regulation (EC)
510/06, in March 2006 (amended by Council Regulation (EC) 179/2006 and Commission Regulation
417/2008). The United States continues to have some concerns about this amended regulation, about the recently promulgated Council Regulation (EC) 479/08, which relates to wines, and about Commission
Regulation (EC) 607/09, which relates, inter alia, to GIs and traditional terms of wine sector products.
The United States is carefully monitoring the application of these regulations.

Member State Measures

The United States continues to have concerns about IPR protection and enforcement in several Member
States. The United States actively engages with the relevant authorities in these countries and will
continue to monitor the adequacy and effectiveness of IPR protection and enforcement, including through
the annual Special 301 review process.

Bulgaria: U.S. industry reports IPR concerns in Bulgaria, particularly with respect to increased Internet
piracy and difficulties obtaining information from Internet service providers (ISPs) to combat Internet
piracy. Judicial enforcement is inconsistent, inefficient, and lacks deterrent value.

Czech Republic: The Czech Republic was on the Watch List in the 2009 Special 301 Report, where it was
placed as the result of an Off-Cycle Review (OCR) in January 2008. Key concerns cited in the 301
Report included the significant quantity of pirated and counterfeit goods sold in retail markets on the
Czech Republic’s borders with Germany and Austria, particularly as some of these markets are located on
government-owned property. Subsequently, the Czech Customs Administration and Trade Inspectorate
systematically increased raids of those markets, intensified its visible presence, and increased seizures of pirated and counterfeit products. The Czech Republic also passed a new criminal law in January 2009
(effective January 1, 2010), which hopefully will result in higher criminal penalties and stronger IPR
enforcement. Despite this progress, industry remains concerned that this increased enforcement is not
sustainable, that IPR legislation is not being fully enforced, that actual penalties applied to IPR violators
lack any deterrent value, and that there is no effective mechanism to revoke the business licenses of IPR offenders. The United States will continue to engage the Czech government on these issues, monitor the situation, and work with the Czech Republic to address the border market and other IPR problems.

Finland: Finland was added to the Watch List in the 2009 Special 301 Report. The key concern cited in
the Report was the lack of product patent protection for certain pharmaceutical products. U.S. industry
continued to express concern that the regulatory framework in Finland regarding some process patents
denies adequate protection to many of the top-selling U.S. pharmaceutical products currently on the
Finnish market. The United States will continue its engagement with Finland to resolve this issue.

Greece: Greece was on the Watch List in the 2009 Special 301 Report. The key concern cited in the
Report is that IPR enforcement in Greece remains weak and uneven. The report also cited the need for
Greece to improve its IPR enforcement regime, including undertaking sustained enforcement actions
against street vendors, more effective raids and seizures, investigations and legal actions against on-line
infringers, increased prosecutions, deterrent-level penalties, and strengthened border enforcement.
Greece also has an emerging problem with Internet piracy. Greece established an Inter-ministerial
Coordinating Committee on IPR in 2008. The Committee, led by the Ministry of Foreign Affairs,
published a National Action Plan for IPR in February 2009 to address IPR protection and enforcement.
U.S. copyright industries reported that Greek law enforcement officials improved cooperation with the
private sector in 2008. The United States will continue to work cooperatively with Greece on the
measures outlined in its National Action Plan to improve IPR protection and enforcement.

Hungary: Hungary was on the Watch List in the 2009 Special 301 Report. The key concern cited in the
Report was the need for Hungary to take concrete steps to implement its national IPR strategy and to
improve its IPR enforcement regime. Under the leadership of its National Board Against Counterfeiting
and Piracy (established in January 2008), the Hungarian government has implemented a two-year national strategy to combat counterfeiting and piracy, promote collaboration between the government and the private sector, increase public awareness of the importance of protecting intellectual property, and take concrete steps to improve IPR protection and enforcement. An area of continuing concern is a historical lack of deterrent sentencing. The Hungarian government recognizes this problem, but Hungary’s independent judiciary typically has not issued strong sentences, even thought the Hungarian Criminal Code provides for a maximum prison sentence of eight years for IPR violators. The United States will continue to engage the Hungarian government on these issues.

Italy: Italy was on the Watch List in the 2009 Special 301 Report. Key concerns cited in the Report
included U.S. copyright industry reports that Italy has one of the highest overall piracy rates in Western
Europe, the lack of deterrent-level sentences for IPR crimes imposed by Italian courts, and an increasing
problem with Internet piracy. While judicial branch and law enforcement agencies now have IPR training
programs, senior government officials have urged stronger enforcement and sentencing. In 2009, the
Italian Parliament raised the penalties for IPR infringement. Additionally, a new Intellectual Property
Directorate was established and tasked with coordinating all domestic anti-IPR infringement activity.
Attention to trademark counterfeiting seems to be increasing, but the same cannot be said for copyright
piracy. Italy’s IP directorate has expressed interest in deeper cooperation with the U.S. on anti-piracy and
anti-counterfeit efforts, but concrete progress resulting in significant changes remains to be seen.

Poland: Poland was on the Watch List in the 2009 Special 301 Report and the United States conducted an
OCR during 2009 to monitor progress on IPR protection and enforcement. The OCR focused in
particular on Poland’s implementation of its national IPR action plan for 2008-2010, issued by the
government’s “Team for Counteracting Infringements of Copyright and Related Rights”. Border
enforcement was strengthened with Poland’s entry into the Schengen Zone, though further progress is
needed to address markets selling pirated and counterfeit goods along the border with Germany.
Successful raids by Polish police in February 2009 against an organized criminal syndicate closed down
what is believed to be one of the largest infringing disc operations in the EU, which exported pirated
music and films throughout the EU. Internet piracy of movies and music continues to present a problem,
but some progress has been made. In 2009, Polish police arrested two peer-to-peer website owners and
forcibly closed down the site, which had been receiving two million visitors a month. Rights holders
continue to have concerns, as penalties for IPR infringement still are not being imposed at levels
sufficient to deter violations.

Romania: Romania was on the Watch List in the 2009 Special 301 Report. Key concerns cited in the
Report included delays and obstacles to criminal investigations, the lack of vigorous prosecution of IPR
cases, and the lack of deterrent-level sentences against IPR infringers. Although authorities have made
gradual improvements in enforcement, the copyright piracy rates in Romania remained high in 2008,
according to industry reports. Romania also established a dedicated IPR department in the General
Prosecutor’s Office (GPO), which serves as the national IPR enforcement coordinator. However, few
IPR cases have been prosecuted to conclusion.

Spain: Spain was on the Watch List in the 2009 Special 301 Report. The key concerns cited in the Report
included the rapid growth of internet piracy, the lack of effective IPR enforcement, and the Spanish
government’s limited effort to change the widespread misperception that peer-to-peer file sharing is legal. Internet downloading of copyrighted material continues to grow rapidly in Spain. Negotiations between content provider companies and ISPs on measures to discourage inappropriate Internet use have not achieved results. In the fall of 2009, the Spanish government created an Inter-Ministerial Commission charged with issuing recommendations on Internet piracy by the end of the year. The Commission proposed legislation to empower an independent IPR commission with the authority to order website operators to remove infringing content, but the legislation has generated vocal opposition, and its prospects for enactment in 2010 are uncertain. The United States has been engaging with Spain to
address these IPR enforcement issues and has been urging Spain to clarify that unauthorized peer-to-peer file sharing is illegal.

Sweden: Sweden continues to have a problem with Internet piracy, but government enforcement efforts
have started to bear fruit. Following the entry into force in April of legislation implementing the EU
Enforcement Directive, several major piracy websites moved out of Sweden.

Ghana

Industry estimates on the scale of counterfeiting and piracy range from 40 percent to 90 percent for
certain sectors, such as pharmaceuticals and computer software. Although IPR owners can turn to local
courts, they have filed very few trademark, patent, and copyright infringement cases in recent years.
Companies that do initiate cases report prolonged timelines for resolution (a possible factor in
discouraging other companies from filing cases).

Government-initiated enforcement remains relatively rare, but the Copyright Office, which is under the
Attorney General’s Office, periodically initiates raids on markets for pirated works. The Customs Service
has collaborated with concerned companies to inspect import shipments.
Since December 2003, Parliament passed six bills designed to implement provisions of the WTO TRIPS
Agreement. These laws pertain to copyright, trademarks, patents, layout-designs (topographies) of
integrated circuits, geographical indications, and industrial designs. Ghana has not yet promulgated many IP-related regulations, although it did promulgate copyright regulations in July 2008.

Guatemala

Guatemala was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report
included the need to provide higher priority to, and greater resources for, combating piracy and
counterfeiting and to enhance enforcement efforts by pursuing raids and prosecutions against not just
small scale sellers but also against the manufacturers of pirated and counterfeit goods.
The CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of
IPR, including: protections for patents, trademarks, undisclosed test and other data submitted to obtain
marketing approval for pharmaceuticals and agricultural chemicals, and for digital copyrighted products
such as software, music, text, and videos; and further deterrence of piracy and counterfeiting. To
implement its CAFTA-DR IPR obligations, Guatemala undertook legislative reforms providing for
stronger IPR protection and enforcement.

The United States will continue to monitor Guatemala’s implementation of its IPR obligations under the
CAFTA-DR.

Honduras

Honduras previously had an independent IPR prosecutor’s office, although it consisted of only two staff
members. The IPR prosecutor’s office was merged into the common crimes office in 2009 and is no
longer an independent entity within the Public Ministry. After the U.S. Government raised concerns that
Honduran cable television operators were using copyrighted U.S. programming without permission, in
early 2009, the IPR prosecutor investigated the allegation, found and confiscated the illegal equipment,
and disbanded the pirating network.

The CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of
IPR, including: protections for patents, trademarks, undisclosed test and other data submitted to obtain
marketing approval for pharmaceuticals and agricultural chemicals, and digital copyrighted products such
as software, music, text, and videos; and further deterrence of piracy and counterfeiting. To implement its CAFTA-DR IPR obligations, Honduras undertook legislative reforms providing for stronger IPR
protection and enforcement.

The United States will continue to monitor Honduras’ implementation of its IPR obligations under the
CAFTA-DR.

Hong Kong

The Hong Kong government continues to maintain a robust IPR protection regime. Hong Kong has
strong IPR laws in place, a dedicated and effective capacity for enforcement, a judicial system that
supports enforcement efforts with deterrent fines and prison sentences, and youth education programs that discourage IPR-infringing activities. Hong Kong remains vulnerable, however, to some forms of IPR
infringement particularly with respect to Internet piracy. The U.S. Government continues to monitor the
situation to ensure that Hong Kong sustains its IPR protection and enforcement efforts and addresses
remaining problem areas.

Hong Kong’s IPR enforcement efforts have helped to reduce losses by U.S. companies, but the rapid
growth of unauthorized file sharing over peer-to-peer networks on the Internet, end-user software piracy,
and the illicit importation and transshipment of pirated and counterfeit goods, including optical media and name-brand apparel from mainland China, raise concerns. To tackle the Internet-related problems, Hong Kong officials have established a joint task force with copyright industry representatives to track down online pirates that are using peer-to-peer networks for unauthorized file sharing.

Hong Kong Customs routinely seizes IPR infringing products arriving from mainland China and
elsewhere. Further, Hong Kong Customs enforcement efforts, including raids on underground production
facilities, have closed most large-scale pirate manufacturing operations, prompting many producers of
pirated optical media to switch to computers or compact disc burners to produce illicit copies and forcing
retailers to rely increasingly on smuggled goods.

The lack of a copyright register in Hong Kong continues to make it difficult for law enforcement officials
and prosecutors to identify original copyright owners in infringement cases, effectively increasing the
burden of proof that rights holders need to present to prove infringement. Although Hong Kong judges,
law enforcement officials, and IP industry stakeholders have complained repeatedly about the lack of a
copyright register, the government has declined to establish one, citing concerns about cost effectiveness
and divergent views among different copyright owners’ associations about the scope of registrations.

India

India was listed on the Priority Watch List in the 2009 Special 301 report. India needs to improve its IPR
regime by providing stronger protection for copyrights, trademarks and patents, as well as effective
protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical and agrochemical products. In addition, India has not yet enacted legislation to implement the provisions of the WIPO Internet Treaties. Large-scale copyright piracy, especially in the software, optical media, and publishing industries, continues to be a major problem. While India continues to consider optical disc legislation to combat optical disc piracy, it has not taken steps to introduce such legislation. India’s criminal IPR enforcement regime remains weak, especially at the federal level, but enforcement at the state level has improved through enhanced coordination with
industry. More police action against those engaged in manufacturing, distributing, or selling pirated and
counterfeit goods as well as expeditious judicial dispositions for criminal IPR infringement actions and
imposition of deterrent-level sentences, is needed.

Indonesia

Indonesia was elevated to the Special 301 Priority Watch List in 2009 because of growing concerns about
IPR protection and enforcement in Indonesia as well as new market access barriers on intellectual
property products. In particular, U.S. companies have serious concerns that widespread optical disc
piracy and counterfeiting of consumer goods, including pharmaceuticals, not only causes significant
economic losses for rights holders, but also poses significant health and safety risks. Cable signal piracy
and the illegal downloading of copyright works using mobile devices also remain pervasive. In addition,
Indonesia has implemented policies that undermine the protection afforded by the country’s IPR regime
and thereby increase harm to U.S. rights holders. Two such policies – a regulation issued by the Ministry
of Health preventing foreign pharmaceutical companies from registering drugs if they do not manufacture
in Indonesia and a regulation issued by BPOM – could severely restrict the registration and availability in
Indonesia of pharmaceutical products containing alcohol or ingredients of porcine (pork) origin, including
vaccines and products delivered in gelatin capsules. The United States continues to raise these concerns
with Indonesia and to urge Indonesia to strengthen its IPR protection and enforcement regime.

Israel

The United States and Israel reached an understanding on February 18, 2010 that resolves several
longstanding issues with Israel’s intellectual property rights (IPR) regime for pharmaceutical products.
These issues include improving data protection, the terms of patents on pharmaceuticals, and provisions
on the publication of patent applications in Israel.

Although not part of the new understanding, Israel has also signaled a new willingness to make progress
on other IPR issues of concern, such as meeting the core requirements of World Intellectual Property
Organization (WIPO) “Internet Treaties,” ( i.e., the WIPO Copyright Treaty and the WIPO Performances
and Phonograms Treaty). The United States welcomes this step, and encourages Israel to proceed with
full accession to, and implementation of, the WIPO Internet Treaties.

Japan

IPR Protection: The U.S. Government continues to urge Japan to adopt a number of new measures to
improve and strengthen IPR protection. These include: improving copyright protection and enforcement;
improving the efficacy of the patent application process; and actively working with the United States to
develop ways to promote greater protection of IPR worldwide, especially in Asia. (See also “Intellectual
Property Rights Protection” in this section.)

The U.S. Government continues to engage with Japan on efforts to improve IPR protection and
enforcement through bilateral consultations and cooperation, as well as in multilateral and regional fora.
Japan continues to make progress in improving the protection and enforcement of IPR.

Japan provides a 70 year term of protection for cinematographic works and 50 years for all other works
protected by copyright and related rights. In 2009, the U.S. Government continued to encourage Japan to
extend the term of protection for all the subject matter of copyright and related rights in line with
international trends among other countries with which Japan shares a similar advanced level of economic
development.

In June 2009, the Japanese Diet passed a bill revising the Copyright Law, which went into effect on
January 1, 2010. The bill amends Japan’s statutory private use exception to make clear that the private
use exception does not apply in cases where a downloaded musical work or a motion picture is obtained
from an infringing source where the download is made with the knowledge that the source is infringing.
The U.S. Government encourages the Japanese government to expand this limitation to cover all works
protected by copyright and related rights.

The U.S. Government has also urged Japan to continue efforts to reduce piracy rates, including adopting
methods to protect against piracy in the digital environment. Police and prosecutors lack ex officio
authority to prosecute IPR crimes on their own initiative, without the requirement of rights holders
consent. Japan’s Internet Service Provider liability law needs to improve adequate protection for the
works of rights holders on the Internet. In addition, Japan’s law should provide better protection against
the unauthorized circumvention of technological measures used by copyright owners to protect their
works by providing criminal remedies for unauthorized circumvention of these measures and for the
trafficking in tools used to circumvent them.

Jordan

Over the past few years, Jordan has steadily sought to improve its IPR laws and IPR enforcement but
further improvements are still needed to strengthen Jordan’s IPR enforcement regime. Jordanian agencies responsible for IPR enforcement lack resources and capacity and enforcement mechanisms and prosecution efforts still need to be strengthened, particularly with respect to ex officio authority to bring criminal cases. A sizeable portion of videos and software sold in the marketplace are pirated. The Jordanian government continues to examine means to provide more comprehensive protection of IPR, including through more stringent enforcement of existing laws, introduction of new regulations based on existing laws, and the creation of an independent IP body.

Kazakhstan

As part of its efforts to accede to the World Trade Organization, Kazakhstan is modernizing its IPR legal
regime. In 2009, Kazakhstan adopted several amendments to its IPR law, including the legal recognition
of vendors who own rights for the distribution of print and digital media. This amendment allows licensed vendors to seek damages from unauthorized dealers selling pirated merchandise. Kazakhstan also amended its patent law to re-define a patent holder, including detailed descriptions of the relationship
between an employer and an employee with respect to an employee’s invention.

Although domestically produced pirated films and music are available in Almaty and Astana, largely as a
result of decreasing costs of making copies, the vast majority of pirated goods in these regions appear to be imported predominantly from Russia and China. Pursuant to statutes enacted in November 2005 thatauthorize stiffer penalties for infringers, the authorities have conducted numerous raids against
distributors of pirated products. The government’s efforts have helped to expand the Kazakhstani market for licensed, non-infringing products. Customs controls could be applied more effectively against
imported infringing goods. Further progress is needed in the realm of civil enforcement, which is serving
as an increasingly prevalent method of IPR enforcement in Kazakhstan. Although civil courts have been
used effectively to stem IPR infringement, judges often lack expertise in the area of IPR, which is a
significant obstacle to further improvement in Kazakhstan’s IPR climate.

Kenya

Kenyan government enforcement of IPR continues to be a serious challenge. Pirated and counterfeit
products in Kenya, mostly imported from Asia, present a major impediment to U.S. business interests in
the country. Imported drugs, shoes, textile products, office supplies, tubes and tires, batteries, shoe
polish, soaps, and detergents are the most commonly counterfeited items.

According to a survey released by the Kenya Association of Manufacturers (KAM) in late October 2008,
piracy and counterfeiting of business software, music, consumer goods, and pharmaceuticals in Kenya
cost firms about $715 million in lost sales annually. KAM estimates the government loses over $270
million in potential taxes.

The Pharmaceutical Society of Kenya contends that over 50 percent of anti-malaria drugs sold in Kenya
are counterfeit. A random survey by the National Quality Control Laboratories and the Pharmacy and
Poisons Board concluded that 30 percent of all drugs in Kenya are counterfeit.

Kenya’s EPZs have served as a conduit for counterfeit and sub-standard goods. These products enter the
EPZ ostensibly as sub-assembly or raw materials, but are actually finished products. These counterfeit
and sub-standard goods also end up in the Kenyan marketplace without paying the necessary taxes.
Batteries, in particular, have been a problematic product in the EPZs.

The Kenya Copyright Board (KCB) has the authority to inspect, seize, and detain suspect articles and to
prosecute offenses. The KCB is severely understaffed with only three prosecutors and two police officers
detailed to the organization. The KCB continues to work jointly with U.S. rights holders in conducting
raids.

Kenyan artists have formed organizations to raise the awareness of intellectual property rights and to
lobby the government for better enforcement. Two of the most active groups are the Music Copyright
Society of Kenya and Kopiken. Kenya’s Music Copyright Society claimed in September 2008 that 90
percent of its potential earnings are lost to piracy and urged the Kenya Revenue Authority (KRA) to
require authentication stickers on musicians’ releases. IPR enforcement against pirated Kenyan and
foreign works remains weak.

The Anti-Counterfeit Bill of 2008 passed Parliament in December 2008. Long sought by the business
community, the bill provides for the creation of an Anti-Counterfeit Agency (ACA) and strengthens the
ability of law enforcement agencies to investigate and prosecute manufacturers and distributors of
counterfeit and pirated goods. However, allegedly due to political infighting, the ACA has not been
established. KAM continues its strenuous efforts to increase government focus on the counterfeit and
piracy issues which impact virtually every legitimate manufacturer in Kenya. In response, local
authorities working with U.S. rights holders have seized more the 9,000 counterfeits in Kenya since
November 2008.

Korea

Korea’s progress on Intellectual Property Rights protection and enforcement led to its removal from the
Special 301 Watch List in 2009. The importance the Korean government places on IPR protection has
increased dramatically in recent years, a development that has accompanied Korea’s shift to become a
significant creator of intellectual property. Nevertheless, concerns remain with elevated levels of online
piracy, corporate end-user software piracy, book piracy in universities, counterfeiting of consumer
products, and a lack of coordination between Korean health and IPR authorities to prevent the issuance of marketing approvals for patent infringing products.

The digitization of Korea’s economy has significantly enhanced the ability to produce and spread
unauthorized reproductions of copyrighted materials. Korea’s Ministry of Culture, Sports and Tourism
(MCST) amended the Copyright Law in July 2009 to include a “Three Strikes” program against illegal
file-sharing. Under the amended law, users who download illegally will be sent a warning letter, which
counts as a “strike”. According to the law, three “strikes” will lead to a suspension of that user’s internet
account by the Internet Service Provider. In December 2009, MCST reported that the Korea Copyright
Commission has issued 19,800 corrective recommendations since the law was amended. No corrective
orders to suspend a user’s internet account have reportedly been issued.

In 2009, Korea’s government, led by MCST, continued its progress on IPR enforcement in several areas.
MCST has made efforts to ensure that all central and municipal government agencies are using properly
licensed software and next year plans to carry out a similar review at the corporate level. Additionally,
MCST held its second annual 100-day campaign against off-line pirated copyrighted material, known as
the “100 Day Seoul Clean Project,” from April until August of 2009. MCST noted it plans to continue
this project on an annual basis. During the 100 Day Seoul Clean Project, MCST and Korean law
enforcement raided street vendors and stores selling pirated DVDs, CDs, software, and books. According
to MCST’s statistics, seizures of pirated material increased 24 percent to 214,199 illegal items, and
prosecutions increased 46 percent to 544 cases, compared to the numbers from last year’s campaign.
Korea has also demonstrated a renewed commitment to investigating and prosecuting "topsites"
(password-protected sites that are the initial depository of pirated material, where other pirates go to
access the pirated material) and has indicated a commitment to carrying out additional enforcement
activities against book piracy on Korean campuses.

Kuwait

Kuwait was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report
included Kuwait’s failure for many years to draft and implement revised IPR legislation to implement the
WTO TRIPS Agreement in areas such as copyrights, patents, trademarks, geographical indications,
customs, and the protection of undisclosed test or other data generated to obtain marketing approval for
pharmaceutical products. Concerns also include a lack of deterrent criminal penalties, high rates of piracy
and counterfeiting, and the use of unauthorized computer software in private enterprises.
As part of the GCC Customs Union, the six Member States are preparing a common trademark law, as
well as a common unfair competition law to protect from unfair commercial use undisclosed information
submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to ensure that the trademark law and unfair competition law will facilitate Member States’ implementation of international and bilateral obligations.

Laos

Laos has undertaken work to create a more modern IPR regime, but currently provides uneven levels of IPR protection. Laos promulgated its first Intellectual Property Law in January 2008, but implementing regulations have yet to be issued and the law itself will need further amendments in order fully implement Lao BTA obligations. Laos became a member of the World Intellectual Property Organization (WIPO) in 1995 and a member of the WIPO Paris Convention for the Protection of Industrial Property in 1998. It has also signed the WIPO Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, but has not yet acceded to that Convention. As a member of ASEAN, Laos has acceded to all of ASEAN’s framework agreements, including the ASEAN Framework Agreement on Intellectual Property Cooperation.

Laos issued a trademark decree in 1995, which places the recently reorganized Science and Technology Agency (STA), a ministry-level agency within the office of the Prime Minister, in charge of the issuance of trademarks. There are currently about 20,400 trademarks registered in Laos. A decree protecting patents, petty patents, and industrial designs was issued in January 2002. Laos developed a draft copyright law in 2005, but it has not yet been enacted, so copyrights and related rights are unprotected in Laos.

STA also is responsible for IPR administration and enforcement in Laos. While STA personnel are well- trained, they have little authority, and IPR enforcement remains weak. In particular, STA lacks the authority to arrest and does not effectively coordinate with the police. Effective IPR enforcement at the border also is lacking due to Laos’ porous borders controls.

Malaysia

Despite efforts to strengthen its IPR regime over the past few years, including by creating an IPR court in 2007, Malaysia has remained on the Special 301 Watch List since 2001 because of continuing concerns including its failure to substantially reduce pirated optical disc production and exports.

Mexico

Mexico was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report included a need to improve enforcement efforts against persistently high levels of piracy and counterfeiting, including by enhancing coordination among enforcement agencies at the federal and sub- federal levels. The report also noted the importance of strengthening Mexico’s IPR regime through the enactment of legislation that would provide ex officio authority to law enforcement and customs authorities, criminalize camcording in theaters, and fully implement the WIPO Internet Treaties.

Mexico’s lower house of Congress passed legislation in April 2008 that would provide the Office of the Attorney General (PGR) with ex officio authority to prosecute intellectual property crimes and an amended version of the legislation passed the Senate in May 2009. That version awaits review and approval by the lower house.

The United States has urged Mexico to provide effective protection against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products, and to provide an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products.

Morroco

The FTA includes strong intellectual property provisions and has led Morocco to strengthen its IPR laws. The Agreement includes strong antipiracy provisions and provides for authorities to seize, forfeit, and destroy counterfeit and pirated goods, as well as the equipment used to make them. The FTA also requires each government to provide criminal liability for Internet piracy, even if there is no motivation of financial gain.

Pursuant to its FTA obligations, Morocco enacted legislation that increased protection of trademarks, copyrights, patents, and undisclosed test data. This legislation included state-of-the-art elements such as provisions concerning disputes over Internet domain names, strong anti-circumvention provisions to prohibit tampering with technologies designed to prevent copyright infringement, and specific protections for temporary copies, which are critical in the digital environment. Despite the progressive elements contained in the new legislation, the Moroccan Copyright Office has identified weaknesses in the ability of the country’s enforcement mechanisms to adequately detect and address internet-based IPR violations. The Moroccan government has requested further technical assistance from the United States and other partners in order to bring its capacity to address copyright infringement up to international standards.

New Zealand

New Zealand generally has a strong record on IPR protection and is an active participant in international efforts to strengthen IPR enforcement globally. It is a party to nine World Intellectual Property Organization (WIPO) treaties and actively participates in the TRIPS Council. The United States continues to encourage the government of New Zealand to accede to and implement the WIPO Performance and Phonograms Treaty and the WIPO Copyright Treaty.

In April 2008, New Zealand’s Parliament passed the Copyright (New Technologies) Amendment Act 2008, No 27 (“the 2008 Act”), which amends the Copyright Act 1994. The 2008 Act is intended to update the country’s original copyright law in light of advances in digital technology. Among other things, the 2008 Act seeks to clarify the liability of Internet Service Providers (ISPs) regarding online infringement. Section 92A of the Copyright Act 1994, as added by the 2008 Act, has not yet been implemented. This provision would have required ISPs to adopt and reasonably implement a policy that provides for the termination of the accounts of repeat IP infringers. However, discussions among the ISPs and copyright holders failed to reach consensus on a code of practice in this area. The New Zealand government is now redrafting Section 92A. It is expected that the legislation will be introduced in Parliament in early 2010.

In July 2008, a bill to update New Zealand’s patent regime was introduced in Parliament which, if enacted, will replace the current Patents Act 1953. The proposed legislation includes a number of changes, including modifications to patent examination and opposition procedures, the establishment of a Maori Advisory Committee to advise the Commissioner of Patents where patent applications involve traditional knowledge and indigenous plants and animals, and reforms of the regulatory environment for patent lawyers. U.S. industry continues to urge the New Zealand government to include provisions in the legislation that would provide for the restoration of the effective patent term for pharmaceutical products lost due to delays related to regulatory approval. The current draft legislation does not contain such provisions.

Nicaragua

To implement its CAFTA-DR IPR obligations, Nicaragua undertook legislative reforms providing for stronger IPR protection and enforcement. Despite these efforts, the piracy of optical media and trademark violations continue to be concerns. The United States has expressed concern to the Nicaraguan government about inadequate enforcement.

The CAFTA-DR provides for improved standards for the protection and enforcement of a broad range of IPR, including: protections for patents, trademarks, undisclosed test and other data submitted to obtain marketing approval for pharmaceuticals and agricultural chemicals; and for digital copyrighted products such as software, music, text, and videos; and further deterrence of piracy and counterfeiting.
The United States will continue to monitor Nicaragua’s implementation of its IPR obligations under the CAFTA-DR.

Nigeria

The lack of institutional capacity to address IPR issues is a major constraint to enforcement. Piracy and counterfeiting remain a problem despite growing interest among Nigerians in seeing their intellectual property protected. Counterfeit and pirated products ranging from automotive parts, pharmaceuticals, software, music and video recordings, and other consumer goods are rampant. Legislation intended to establish a legal framework for an IPR system to implement WTO obligations has been pending in the National Assembly for several years.

In 2004, the Nigerian Copyright Commission (NCC) launched an antipiracy initiative named “Strategic Action Against Piracy.” The Nigerian police force, working closely with the NCC, raided enterprises producing and selling various pirated works such as software, books, and videos. The NCC obtained two convictions on broadcast piracy and software piracy in 2009. About 60 cases are currently being prosecuted against IPR violators in various courts in the country. However, inconsistent application of legal and law enforcement measures remain barriers to IPR enforcement.

Norway

Norway was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the Report included the lack of product patent protection for certain pharmaceutical products. U.S. industry has expressed concern that the regulatory framework in Norway regarding process patents filed prior to 1992 and pending in 1996 denies adequate patent protection for a number of pharmaceutical products currently on the Norwegian market. The United States will continue to encourage Norway to resolve this issue.

U.S. industry representatives report that Internet piracy in Norway is facilitated by the high level of broadband Internet penetration and the ease of peer-to-peer downloads of music and video. Industry representatives report concerns with Norway’s implementation of the EU’s 2001 Copyright Directive that addresses Internet piracy, as well as broad private use exceptions under Norway’s copyright laws. The government is currently reviewing the legislation and the results are expected to be published in 2010.

U.S. and Norwegian authorities held constructive discussions in 2009 concerning several matters including: the need to educate and promote public awareness of illegal internet use; the role of Internet service providers in prohibiting piracy; and the need to dedicate necessary public resources to combat piracy and prosecute offenders.

Oman

In the FTA, Oman committed to provide strong IPR protection and enforcement for copyrights, trademarks, geographical indications and patents. Oman revised its IPR laws and regulations to implement these FTA commitments and acceded to several international IPR treaties.

As part of the GCC Customs Union, the six Member States are preparing a common trademark law, as well as a common unfair competition law to protect from unfair commercial use undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to ensure that the trademark law and unfair competition law will facilitate Member States’ implementation of international and bilateral obligations.

Pakistan

Pakistan was listed on the Priority Watch List in the 2009 Special 301 report. Key concerns cited in the report relate to weak protection and enforcement of IPRs, especially with respect to copyright and pharmaceutical data protection.

While the government took steps in 2006 and 2007 to improve copyright enforcement, especially with respect to optical disc piracy, it appears that only some of the arrests resulted in prosecutions and the few verdicts that were issued resulted in imposition of insignificant prison sentences. Pakistan’s Federal Investigation Agency continues to conduct large scale raids, and from August 2008 to November 2009, 17 new cases were filed against IPR violators and $6.4 million worth of pirated material were confiscated. The raids were carried out in several cities, including Rawalpindi, Lahore, Karachi, Multan, and Faisalabad. However, the lack of successful prosecutions means that arrests have little deterrent effect. Moreover, Pakistan is now reportedly being used as conduit for infringing products transiting from Russia, Malaysia, Singapore, China, Bangladesh, and Sri Lanka for onward distribution to third countries. Book piracy also continues to present barriers to legitimate trade and investment.

Pakistan has not made progress in providing effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. The government of Pakistan and international and local pharmaceutical companies have been negotiating draft regulations on data protection for the past three years. Although draft data protection regulations were finally formulated in 2009, the regulations remain under government of Pakistan review and have not been promulgated. In addition, Pakistan does not have an effective system to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products. In 2009 Pakistan’s President issued an ordinance that removed an 18-month patent application processing deadline, slowing the processing of pending patent applications.

There has been some progress on IPR issues over the past year. In October 2009, the Cabinet approved a draft Plant Breeder’s Rights Law, and parliament is currently reviewing an amendment to the Seed Act of 1976. If passed, these will provide an environment conducive to research and development attractive to both domestic and foreign researchers and plant breeders. The government of Pakistan has indicated it expects the draft laws to be enacted in 2010.

Panama

The government of Panama is making efforts to strengthen the enforcement of IPR in Panama. Since 1997, two district courts and one superior tribunal have been exclusively adjudicating anti-trust, patent, trademark, and copyright cases. The Panamanian government reports that, in 2009, there were 185 convictions for IPR-related violations, and it seized over $17 million of illicit goods. However, given Panama’s role as a transshipment point, U.S. industry remains concerned that Panama may become an important hub in the regional and global trade in pirated and counterfeit goods. Piracy is a significant problem in Panama, and the incidence of Internet piracy has quickly emerged. For example, the unauthorized downloading from the Internet is often the source of pirated optical discs of films distributed by street vendors.

The TPA would provide for improved standards for the protection and enforcement of a broad range of IPR, including protections for patents, trademarks, undisclosed test and other data submitted to obtain marketing approval for pharmaceuticals and agricultural chemicals, and digital copyrighted products such as software, music, text, and videos; and further deterrence of piracy and counterfeiting.

Paraguay


The United States will continue to monitor implementation of the Memorandum of Understanding between the United States and Paraguay pertaining to IPR protection and enforcement, which was revised in 2009 and will remain in effect through 2011. While Paraguay has increased the number of raids and seizures of pirated and counterfeit goods, concerns remain because of porous borders, ineffective prosecution of IPR infringers, and court sentences that are insufficient to deter infringement. Although a new penal code that became effective in 2009 increases penalties for IPR violations, prosecution of IPR offenders remains weak, and there are few convictions. Concerns also remain about inadequate protection against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products and the shortcomings in Paraguay’s patent regime.

Peru

Peru was listed on the Watch List in the 2009 Special 301 report. As a result of the PTPA, Peru enhanced its IPR legal framework significantly to strengthen IPR protection and enforcement. Among the many improvements, Peru amended its law on industrial property, as well as related laws and regulations to put in place state-of-the-art protections for trademarks and patents. For instance, Peru has developed an online system for registering and maintaining trademarks. Peru also ensures that the first person to acquire a right to a trademark or a geographical indication (GI) has priority and exclusivity with respect to that trademark or GI. Notwithstanding the improvements to Peru’s IPR legal regime, piracy rates are high and the problem of counterfeit clothing and toys continues due to inadequate enforcement.

The Phillipines

While the Philippines has enhanced its focus on addressing IPR issues, it remained on the Special 301 Watch List in 2009. The top U.S. concerns include lack of progress in prosecuting IPR violators in Philippine courts, the spread of camcording and peer-to-peer piracy, the growth of illegal mobile downloads, and pharmaceuticals legislation that carves out new governmental authority to curb the exercise of IPR. U.S. distributors continue to report high levels of piracy of optical discs of films and musical works, computer games, and business software, as well as widespread unauthorized transmissions of motion pictures and other programming on cable television systems.

In October 2009, a Philippines special working group delivered a proposal to expedite and clarify the judiciary’s IPR litigation process. The working group members represent the IPO, National Committee on IPR, state prosecutors, law enforcement, customs, regional trial court judges, and private sector lawyers. The proposed rules aim for cases to be resolved within an average of one year. Specific provisions include procedures for the quick destruction of seized counterfeit goods, streamlined procedures for subject matter expert testimony, alternative dispute resolution, and the establishment of specialized IP courts with national jurisdiction. The Supreme Court is directing the formation of a judicial study committee to review the proposed rules and present the revised procedures to the Supreme Court for adoption.

Qatar

As part of the GCC Customs Union, the six Member States are preparing a common trademark law, as well as a common unfair competition law to protect from unfair commercial use undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to ensure that the trademark law and unfair competition law will facilitate Member States’ implementation of international and bilateral obligations.

Russia

Russia was listed on the priority watch list in the 2009 Special 301 report. Key concerns cited in the Report included Russia’s slow implementation of some of its commitments in the November 2006 Agreement between the Government of the United States of America and the Government of the Russian Federation on Protection and Enforcement of Intellectual Property Rights (“IPR Bilateral Agreement”), such as the commitment to fight Internet piracy, protect against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products, deter piracy and counterfeiting through criminal penalties, strengthen border enforcement, and bring its laws into compliance with WTO and international IPR norms. The U.S. and Russian governments have an ongoing dialogue to ensure the full implementation of this agreement.

In 2009, Russia’s optical disc production capacity continued to exceed domestic demand, raising concerns regarding optical disc piracy. U.S. copyright industries estimate that approximately 65 percent of sound recordings on the Russian market are pirated, resulting in reported losses of nearly $2.7 billion in 2008. However, legitimate DVD sales are on the rise, in part due to increased law enforcement action against pirates, including a 2008 ban on camcording in movie theaters, and a growing preference for high quality products.

Internet piracy is a serious and growing concern. Authorities have begun criminal investigations against operators of some of the notorious Russia-based websites. Western and Russian recording companies have won several civil suits against Internet pirates, although resulting damage awards have been minimal by U.S. standards. Gaps remain in Russian legal and enforcement efforts to address Internet piracy, particularly with respect to sound recordings.

U.S. and multinational companies continue to report counterfeiting of trademarked goods, especially of consumer goods, distilled spirits, agricultural chemicals and biotechnology, and pharmaceuticals. While in the past U.S. firms complained about “trademark squatting” by Russian enterprises attempting to appropriate well-known trademarks not active or registered in Russia, rights holders have been increasingly successful in countering “trademark squatting” schemes though the Russian court system or the Russian Federal Service for Intellectual Property, Patents, and Trademarks (Rospatent). In an effort to advance administrative intellectual property protection, a specialized higher patent chamber at Rospatent has brought greater expertise and efficiency to the adjudication of patent and trademark disputes.

Part IV of the Civil Code, implemented in January 2008, improves many aspects of IPR protection, but still contains some provisions that raise concerns under the WTO and other international agreements. The Russian government pledged to ensure that Part IV and other IPR measures will be fully consistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), and the United States continues to work with the Russian government toward this goal.

Amendments to the Russian Customs Code to provide customs officials with the ex-officio authority to seize suspected counterfeit goods and hold them for up to seven days to investigate their authenticity have passed a first reading in the Duma. Second and third readings of these amendments, and the third and final reading of the amendments to Part IV, have not been scheduled.

Under Article 39.3 of the TRIPS Agreement, Russia must, once it becomes a WTO Member, protect against disclosure and unfair commercial use of undisclosed test and other data submitted to government authorities to obtain marketing approval of pharmaceutical and agricultural chemical products. Russia currently does not provide such protection for pharmaceutical products. Although legislative changes to address these concerns are being considered by the Russian government, multiple versions of draft legislation on data exclusivity continue to circulate, making it impossible to assess the adequacy of the possible changes.

Domain Name Changes
Starting November 25, 2009, priority will be given to trademark owners registered in the Russian Federation who also register their domain names in a new Cyrillic alphabet format. The Russian Coordinating Center of the National Internet Domain issued a regulation, “Provisions on Priority Registration of Domain Names in the ?? Domain” that stipulates that domain names must either reproduce or match word designations contained in trademarks. Trademark owners with a “.RU” (Russia) domain name can keep the “.RU,” but now have the option of obtaining a “.??”(RF). .?? domain names may be registered for a fee of approximately $40 for a one year period, with the possibility of subsequent renewal of the domain name's registration annually.

Priority registration of domain names in the .?? domain will be available to rights holders of trademarks in Cyrillic only. Consequently, owners of trademark registrations in the Latin alphabet will be able to register Cyrillic domain names only during a subsequent “auction” period (intended to take place from April 12, 2010 to June 4, 2010) and a “free-for-all” domain name registration period (which would allegedly begin on June 7, 2010). This limitation extends to well-known trademarks in the Latin alphabet.

Enforcement
Poor enforcement of IPR in the Russian Federation is a pervasive problem. In the November 2006 IPR Bilateral Agreement, Russia agreed to improve IPR enforcement while the United States agreed to step up IPR training programs and technical assistance for Russian customs and law enforcement officials. In 2009, the U.S. Patent and Trademark Office conducted six IPR training programs for Russian police, investigators, prosecutors, judges, and customs officials and in total trained 149 Russian law enforcement officials. Russian Customs has drafted an “IPR Enforcement Handbook”, which will be used by all Russian Federal Customs Service officers. Additional training programs are planned for 2010.

In 2009, Russian law enforcement agencies carried out raids on optical disc production facilities suspected of engaging in pirate activities, including a major raid in Moscow and surrounding regions in November 2009 that involved close cooperation between the Russian Ministry of Interior (MVD) and rights holders. That raid stopped the activity of two international organized crime groups involved in mass producing counterfeit DVDs of films and software. Although the raid was a successful surprise raid, most surprise raids are less effective as the date and time of pending raids are often leaked to the optical disc plant in advance. While the level of cooperation with police in optical disc raids is increasing, the quality of raids, and the level of police expertise, is uneven nationwide. A number of factors limit the effectiveness of raids, including the high monetary damages threshold required to establish criminal liability, and the general reluctance of prosecutors to initiate criminal cases in the field of IPR, even when evidence substantiates the claim.

Saudi Arabia

In February 2010, the United States announced that Saudi Arabia would be removed from the Special 301 Watch List in recognition of significant progress that Saudi Arabia had made in the protection and enforcement of intellectual property rights, including addressing concerns identified in the 2009 Special 301 Report. An Out-of-Cycle Review focused on three specific issues: (1) deterrent level penalties for violations of Saudi copyright law, (2) action to reduce the use of unauthorized copies of software within the Saudi government, and (3) adequate protection for patented pharmaceutical products. The United States will carefully monitor Saudi Arabia’s progress in continuing to improve its IPR regime.

As part of the GCC Customs Union, the six Member States are preparing a common trademark law, as well as a common unfair competition law to protect from unfair commercial use undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to ensure that the trademark law and unfair competition law will facilitate Member States’ implementation of international and bilateral obligations.

Singapore

In connection with its FTA commitments and obligations under international treaties and conventions, Singapore has developed a generally strong IPR regime. Nevertheless, the United States continues to have concerns regarding the government’s efforts to enforce IPR. These include: the continued transshipment of infringing goods through Singapore, insufficient deterrent penalties for end-user piracy, and the lack of meaningful enforcement against online infringers.

South Africa

Enforcement of intellectual property rights (IPR) in South Africa presents challenges. In recent years, the South African government has introduced measures to enhance enforcement of the 1997 Counterfeit Goods Act. The government has appointed more inspectors, designated more warehouses for securing counterfeit goods, destroyed counterfeit goods, and improved the training of customs, border police, and police officials. Although law enforcement authorities often cooperate with the private sector in investigating allegations of trade in pirated or counterfeit goods, some members of the business community have expressed concerns about lax enforcement of IPR laws against imports of infringing goods, as well as slow and cumbersome court proceedings. There have been some concerns that the South African Customs Administration interpreted a 2004 court ruling as limiting its ability to seize potentially infringing goods that are marked for transshipment through South Africa. This interpretation is still being debated within the South African government.

Under South African law, complainants can take both civil and criminal action against IPR offenders. The number of arrests for trading in pirated or counterfeit goods has increased in the last few years. In addition, South Africa has taken steps to improve enforcement, such as the creation of DTI’s enforcement unit, and the establishment of Commercial Crime Courts in several cities. The South African government has also formed an interagency counterfeit division including the DTI, the South African Revenue Service (SARS), and the South African Police Service to improve coordination on IPR enforcement. SARS has launched a public awareness campaign about the seriousness and impact of IPR crimes, with special attention to counterfeiting issues related to merchandising for the 2010 World Cup soccer tournament in South Africa. DTI is also working with universities to incorporate IPR awareness into college curricula.

Despite efforts to improve IPR enforcement, monetary losses from counterfeiting and piracy remain high. U.S. industry is increasingly concerned about illegal commercial photocopying, especially at universities, libraries, and other on-campus venues. U.S. industry has also expressed concern about software, optical disc, and Internet piracy, the growing number of counterfeit production facilities, advertisements of “burn-to-order” services, and the unwillingness of South African Internet Service Providers (ISPs) to shut down infringing sites or access thereto. Counterfeit medicines are also a growing problem.

There is no direct legal protection for local distributors against parallel imports. However, in 2008, several members of the Motion Picture Association of America, acting individually, successfully obtained a civil injunction against a major DVD rental chain that was parallel importing their product. The Cape High Court awarded costs against the importer, who is appealing the decision.

Sri Lanka

Weak IPR enforcement remains a problem in Sri Lanka. Piracy levels remain very high for sound recordings and software. According to an industry-commissioned study, as much as 90 percent of personal computers in Sri Lanka used pirated software in 2008 and retail revenue losses were estimated at around $97 million in 2008 due to software piracy. Further, government use of unauthorized software continues to be a problem.

Redress through the courts for IPR infringement is often a frustrating and time-consuming process. While police can take action against counterfeiting and piracy without complaints by rights holders, they rarely do so. In the apparel sector, rightsholders have had some successes in combating trademark counterfeiting through the courts.

The Sri Lankan government’s Director of Intellectual Property, along with international experts, continues to have IPR legal and enforcement training for customs, judicial and police officials. The U.S. Embassy, the United States Patent and Trademarks Office, and the American Chamber of Commerce of Sri Lanka are also working with the government of Sri Lanka and the private sector to improve enforcement, provide enforcement training, and enhance public awareness. Sri Lankan Customs has created a computer based Customs Trade Mark recordation system, although it is yet to be launched. During the TIFA meetings in 2009, the United States urged Sri Lanka to integrate U.S. technical assistance into the government’s overall IPR enforcement plan.

Switzerland

Switzerland generally maintains high standards of intellectual property rights (IPR) protection. However, U.S. industry has expressed some concerns regarding Switzerland’s revised copyright legislation implementing the World Intellectual Property Organization (WIPO) Copyright Treaty and Performances and Phonograms Treaty, including concerns over broad exceptions for use of multimedia content. The United States will continue to monitor the implementation and effect of this legislation.

Taiwan

IPR protection continues to be an important issue in the United States-Taiwan trade relationship. The United States recognizes Taiwan’s continuing efforts to improve enforcement of IPR, and on January 16, 2009, Taiwan was removed from the Special 301 Watch List.

However, rights holders continue to express concerns regarding infringement of copyrighted material on the Internet, illegal textbook copying on and around university campuses, inadequate protection for the packaging, configuration, and outward appearance of products (trade dress), and the availability of counterfeit pharmaceuticals in Taiwan. The International Intellectual Property Alliance estimates that losses due to IPR copyright piracy in Taiwan cost U.S. industry $115.4 million in 2008, down from $327.8 million in 2007. The importation and transshipment of counterfeit products from China is also a problem.

Piracy on the Internet remains a serious concern for IP enforcement in Taiwan. In April 2009, the Legislative Yuan amended the Taiwan Copyright Law to require Internet service providers (ISP) to undertake specific and effective notice-and-takedown actions against online infringers to avoid ISP liability for the infringing activities of users on their networks.

Thailand

Thailand was listed on the Priority Watch List in the 2009 Special 301 Report. Key concerns cited in the report included the lack of progress since the previous year in addressing the widespread problems of piracy and counterfeiting. This was evidenced by the lack of sustained and coordinated enforcement efforts, and, in particular, the lack of successful prosecutions. The U.S. pharmaceutical industry continues to express concerns regarding the uncertain climate for their industry in Thailand. In addition, both the pharmaceutical industry and agricultural chemicals industries have expressed concerns that Thailand’s trade secret regulations fail to protect against unfair commercial use of undisclosed tests and other data submitted to Thai governmental authorities.

The United States has been encouraged by the Thai government’s recent high-level commitment to protect and promote IPR in Thailand and the creation of a national strategy to advance this commitment. Moreover, there have been some high profile seizures of IPR infringing products and the Thai government has introduced legislation addressing unlawful camcording and landlord liability for criminal action where pirated and counterfeit goods are produced or sold.

The United States will continue monitoring the Thai government’s efforts to protect and enforce intellectual property rights.

Turkey

Turkey was listed on the Watch List in the 2009 Special 301 Report. Key concerns cited in the Report included continued uncertainty as to Turkey’s commitment to protect data generated to obtain marketing approval for pharmaceutical products, setbacks in Turkey’s enforcement of protection for trademark rights, continued widespread counterfeiting of products, and piracy of books and software.

Enforcement of Turkey’s intellectual property rights protection laws has improved in recent years. For example, the software industry welcomed a 2008 publication by the Ministry of Culture of a new circular reminding all government agencies of the requirement to use licensed software. Enforcement agencies engaged in several large operations to seize counterfeit goods over the course of 2009; however, industry reports that considerable gaps in enforcement efforts remain.

Ukraine

Ukraine was listed on the Watch List in the 2009 Special 301 report. Key concerns cited in the report included widespread retail piracy, the transshipment of pirated and counterfeit goods, Internet piracy, and government use of illegal software. The Ukrainian government meets regularly with U.S. Government officials and with U.S. and domestic industry representatives to monitor the progress of enforcement efforts through the United States-Ukraine IPR Enforcement Cooperation Group.

United Arab Emirates

The UAE has made the protection of intellectual property a priority in recent years. The UAE is considering additional legislation regarding data protection and other IPR-related matters and has consolidated its IPR offices under the authority of the Ministry of Economy.

According to 2009 industry estimates, the rate of software piracy in the UAE is the lowest in the Middle East. The UAE is recognized as the regional leader in fighting computer software piracy, although industry stakeholders believe the UAE could be doing more. Industry estimates in 2009 indicated that piracy resulted in almost $170 million (AED 623 million) in losses to the UAE economy in 2008. In 2009, the UAE Ministry of Economy and local customs officials organized a number of IPR workshops and public awareness programs. The United States has encouraged the UAE to continue strengthening its efforts to combat IPR piracy and counterfeiting.

As part of the GCC Customs Union, the six Member States are preparing a common trademark law, as well as a common unfair competition law to protect from unfair commercial use undisclosed information submitted for marketing approval of pharmaceutical products. The United States is engaged in a dialogue with GCC technical experts to ensure that the trademark law and unfair competition law will facilitate Member States’ implementation of international and bilateral obligations.

Venezuela

Venezuela was listed on the Priority Watch List in the 2009 Special 301 report. Key concerns cited in the Report relate to the deteriorating environment for the protection and enforcement of IPR in Venezuela. Copyright piracy is increasing and proposed copyright legislation, if implemented, would severely undercut the existing Venezuelan copyright law, as well as bilateral and international standards of IP protection. Concerns remain regarding the revocation of existing patents on pharmaceuticals. Other concerns include the lack of effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products. Although weak enforcement of IPR remains a problem, Venezuela’s tax and customs authority has made some progress on raising awareness of IPR issues through public anti-piracy and “zero tax evasion” campaigns.

Vietnam


Vietnam was listed on the Watch List in the 2009 Special 301 report. While recognizing the strides Vietnam has made in IPR protection and enforcement over the past several years, the United States noted that enforcement efforts have not kept pace with rising levels of IP infringement and piracy in the country. Furthermore, administrative enforcement actions and penalties --– the most commonly used means of enforcing IPR in Vietnam --– have not served as a sufficient deterrent. The special 301 report also noted that IP violations committed over the Internet continue to increase. Over the past year, Vietnamese agencies took some initial steps to enforce IP protections on the Internet, including sending warning letters and meeting with service providers to provide warnings against providing infringing content. The United States will continue to work with Vietnamese authorities and to encourage more vigorous enforcement actions.

In 2009, Vietnam revised its IPR Law, as well as IPR related provisions in the Criminal Code, to provide criminal penalties for IPR infringement conducted on a commercial scale. Vietnam has stated it will clarify the IPR related provisions in the Criminal Code through an implementing decree. The United States continues to monitor implementation of these important provisions.

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