2017 Special 301 Report

The Special 301 Report (Report) is the result of an annual review of the state of IP protection and enforcement in U.S. trading partners around the world, which the Office of the United States Trade Representative (USTR) conducts pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988, the Uruguay Round Agreements Act, and the Trade Facilitation and Trade Enforcement Act of 2015 (19 U.S.C. § 2242).

USTR continues to place China on the Priority Watch List because longstanding and new IP concerns strongly merit attention. China is home to widespread infringing activity, including trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports to markets around the globe.

China imposes requirements that U.S. firms develop their IP in China or transfer their IP to Chinese entities as a condition to accessing the Chinese market. China also requires that mandatory adverse terms be applied to foreign IP licensors, and requires that U.S. firms localize research and development activities. Structural impediments to civil and criminal IPR enforcement are also problematic, as are impediments to pharmaceutical innovation.

In virtually all countries identified in this Report, IP enforcement is lacking. Many of the listed trading partners including Canada, Egypt, Indonesia, Mexico, Turkey, Turkmenistan, and Uzbekistan do not provide adequate or effective border enforcement against counterfeit and pirated goods; in addition, many listed countries’ customs officials lack authority to take ex officio action to seize and destroy such goods at the border or to take such action for goods in-transit.

Several countries including China, Mexico, Romania, Russia, Switzerland, Thailand, Ukraine and Vietnam have not addressed the continuing and emerging challenges of copyright piracy. Countries such as Argentina, Greece, Tajikistan, Turkmenistan, Uzbekistan, and Venezuela do not have in place effective policies and procedures to ensure their own government agencies do not use unauthorized software.

Challenges to IP protection and enforcement in Russia include copyright infringement, trademark counterfeiting, and non-transparent collective management organization procedures. Russia took some positive steps in 2016 but overall the IP situation remains extremely challenging. Inadequate and ineffective protection of copyright, including with regard to online piracy, continues to be a significant problem, damaging both the market for legitimate content in Russia as well as in other countries.

Russia has enacted legislation that enables right holders to seek court-ordered injunctions, but has not taken the steps to get at the root of the problem – namely, investigating and prosecuting the owners of the large commercial sites selling such pirated material, including software. Royalty collection in Russia continues to lack transparency and fails to meet international standards. The United States encourages collective management organizations (CMOs) to update and modernize their procedures, including enabling full representation of right holders in CMO governing bodies, regardless of whether right holders are individuals or legal entities.