How the US Shapes International Intellectual Property Policy by Nils Montan
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Transcript of How the US Shapes International Intellectual Property Policy by Nils Montan
8/9/2019 How the US Shapes International Intellectual Property Policy by Nils Montan
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HOW THE US SHAPES INTERNATIONAL IP POLICY -
USTR AND THE SPECIAL 301 REPORTBy Nils Victor Montan
Essentially, the USTR is a Cabinet level appointment
in the Executive Branch of the federal government that
is responsible for the articulation and implementation
of trade policy of the United States. The USTR has a
number of responsibilities, but the protection of US
based intellectual property around the world, as a
matter of policy, is one of the most important of them.
The United States has been a driving force over the past
50 years for the international protection for intellectual
property. This makes sense from the US point of
view, as United States based intellectual property is
a tremendous resource and asset to the country. In
addition to normal bilateral relationships between the
US and its trading partners, which are often handled
by the Departments of State and Commerce, perhaps
the principle mechanism used by the United States
government to seek the protection of home-grown IP is
the USTR’s annual Special 301 Report. The 301 Report
notes any policy, law or practice by a foreign country
that is a barrier to trade for the US. The types of barriers
can be many, including lack of adequate patent and
trademark protection. Among the most problematic
areas is the issue of rampant counterfeiting and piracy of
US based products outside of the United States.
Counterfeiting and piracy have been called the “crimes
of the 21st century” by some. While that designation
may be debatable, it is not open to question that
the world is swimming in a sea of products that are
not manufactured by the legitimate owners of the
intellectual property adhering to the original goods.
There are estimates that the value of counterfeit and
pirated goods sold in the world today may be as much as
half a trillion dollars. And not just money is at stake here.
Counterfeit drugs and other products can have serious
health problems for consumers all over the world. Oneconsistent part of the USTR’s annual 301 Report is
to note the high levels of piracy and counterfeiting in
countries like China and Russia.
Of course, the 301 Report is an inherently political
document at some level and the Report has become a
thorn in the side of many countries around the world as
the US has criticized their perceived lack of protection
for US based IP. In recent years, many governments and
NGOs have criticized the entire process as being biased
and unfair. Indeed, there are some who question the
very appropriateness of protecting patents that may
prevent important drugs from getting to market, or
copyright laws which may impose prison sentences forthe downloading of music and films. At the very least,
countries hate landing on the US “black list.” Despite
the criticism, however, the 301 process continues on and
remains a virtual blueprint of US foreign policy in the IP
area.
Many legal professionals,including intellectual property
lawyers, have heard about, but
don’t really understand, the
role of the Office of the United
States Trade Representative (the
“USTR”) and the USTR’s annual
Special 301 Report.
8/9/2019 How the US Shapes International Intellectual Property Policy by Nils Montan
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the USTR conduct public hearings in early March to
provide opportunities to both supporters and critics of
the 301 Report to voice their concerns. To some, this
appeared to be a more mature discussion about the
objectives of US trade policy. To the severe critics of US
policy, it was viewed as largely window dressing.
There is a high likelihood that the work of the USTR will
become even more politicized in the years to come. It
has been felt by a number of IP rich countries that the
benchmark of an “adequate and effective” IP system
provided by the Trade Related Aspects of Intellectual
Property Rights (TRIPS Agreement) has not met its
obligation to protect IP. As a result, the United States,
along with some of its major trading partners, such
as Japan, the EU and Australia, have proposed a new
treaty, the Anticounterfeiting Trade Agreement, or ACTA.
The negotiations for ACTA have been largely held out of
the public eye, which has raised claims of inappropirate
secrecy by critics. In addition, many fear that even
stronger protection for IP around the world will have a
negative effect in the developing world. Never-the-less,
it is likely that this new standard will become widely
adopted in years to come and will provide the USTR
with an even stronger benchmark in its quest to fight for
strong international IP protection for US-based products.
About The Author
Nils Victor Montan is Of Counsel to the Brazilian law firm of
Dannemann Siemsen Bigler & Ipanema Moreira. He was formerly
the President of the International AntiCounterfeiting Coalition
in Washington, DC and Vice President and Senior Intellectual
Property Counsel at Warner Brothers in Burbank, California.
He is also a former President of the International Trademark
Association.
HOW THE US SHAPES INTERNATIONAL IP POLICY - USTR AND THE SPECIAL 301 REPORT
For a number of years, the People’s Republic of
China has been the focus of the 301 Report and has
been named as a Priority Foreign Country on several
occasions. This makes sense, as many IP owners see
markets all over the world awash with counterfeit and
pirate products manufactured in China. The result is
an ongoing “dance” between the US and China about
China’s intellectual property protection regime. Otherperennial occupants on the 301 Report include Brazil,
India, Korea, Indonesia and Russia. No country that
lands on the 301 list accepts the designation lying down.
Every country seeks to denounce the fairness of the
designation. This can result in open warfare in the press
or in intense negotiations between the countries. Despite
the heat, it is accepted by most observers that, in fact,
the improvement in the IP laws and practices in many
countries including China, over the past 25 years, are
due to the pressure bought on by a 301 designation and
the resulting bilateral negotiations with the US.
Interested parties begin to draft their Special 301 report
submissions to the USTR’s office in the fall, whichare normally due in early February of the following
year. Any interested party can file a petition with the
USTR listing the countries it feels are not adequately
protecting US based IP. Of course, the USTR can also
initiate an investigation of its own. In recent years, the
petitions which have received the most notice from the
USTR are those that have the most detailed information
about the facts of actual lack of protection. Important
submissions have been made by the Pharmaceutical
Research and Manufacturers of America (“Pharma”), the
International Intellectual Property Alliance (“IIPA”) and
the International AntiCounterfeiting Coalition (“IACC”).
Following a staff investigation of the facts set forth inthe submissions and further dialogue with all interested
parties, the final Special 301 Report is issued in April.
The 2009 Special 301 Report review process examined
intellectual property protection in 77 countries.
Following extensive research and analysis, the USTR
designated 46 countries in the Report as failing to
adequately protect IP. There was no Priority Foreign
Country in the report, but there were 12 Priority
Watch list countries, including China, Russia, Algeria,
Argentina, Canada, Chile, India, Indonesia, Israel,
Pakistan, Thailand and Venezuela. The reasons that each
of these countries has landed on the USTR’s “black list,”
as some choose to call it, are varied and many, but each
is alleged to have failed to protect US based IP in some
fashion.
The submissions are now at the USTR’s Washington, DC
office for the 2010 301 Report and there are no major
surprises in the filings. This year, in an effort to be more
open and transparent, the Obama Administration had
“The improvement in the IP
laws and practices in many
countries including China, over
the past 25 years, are due to thepressure brought on by a 301
designation.”