PIJIP Snapshot of Industry Influence on the 2008 Special 301 Report

Mike Palmedo
April 30, 2008

American University's Program on Information Justice and Intellectual Property has compared the 2008 Special 301 Report to industry submissions to US Trade Representative (USTR) by the International Intellectual Property Association (IIPA)[1] and the Pharmaceutical Research and Manufacturers Association (PhRMA). The comparison show that:

Most of the countries that the industry groups USTR to place in the Special 301 Report are in it.

    - 86% of the nations IIPA singled out are included in the USTR report.[2]
    - 75% of the nations PhRMA singled out are included in the USTR report.[3]

Two related important concerns for both industry groups were a lack of timely, effective prosecutions of IP infringers, and sentences handed down by courts that the industries viewed were not tough enough to deter further infringement. 65% of the countries listed in the Special 301 Report are cited for one or both of these offenses.[4]

The top concern for the copyright industry is piracy (especially internet and book piracy). 79% of the countries IIPA asked to have cited for piracy are included in the Special 301 Report.[5]

A top concern for the pharmaceutical industry is the protection of test data. 61% of the countries PhRMA asked to have cited for inadequate data protection are included in the Special 301 Report.[6]

However, USTR was less responsive to some of the industries' other concerns. Only 41% of the countries cited by IIPA for having open-air counterfeit goods markets were included in the report. Only 36% of the countries cited by PhRMA for regulatory approval of generic versions of drugs still on patent ("linkage") were included in the report,[7] and none of the 7 countries cited by PhRMA for parallel imports were included.

The Special 301 Report, released annually by USTR lists nations that "deny adequate and effective protection of intellectual property rights, or deny fair and equitable market access to United States persons that rely upon intellectual property protection."[8] In preparing its report, USTR solicits advice from interested parties. Any person or group can submit comments, but the majority of comments come from firms and industry groups representing IP owners. In some cases, countries included in previous reports submit comments to USTR outlining steps they've taken to toughen intellectual property rules. Each year, IIPA and PhRMA submit the most detailed comments to USTR, asking it to include various countries for specific offenses.[9]

Nations included in the Special 301 Report are typically subjected to further pressure from the US government, and inclusion on the Special 301 may discourage foreign investment.[10] This year, nine countries were identified as "Priority Watch List," which is the most serious ranking a country is given before USTR designates it a Priority Foreign Country, at which time USTR is required to begin the process of setting up formal trade sanctions.[11] Another 36 countries are identified on the "Watch List," indicating that the US government will continue to monitor their behavior. Paraguay was included under section 306, meaning that USTR is monitoring its compliance with an agreement meant to resolve a former 301 dispute.

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