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Russia and the special 301 report 2019

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. This Report provides an opportunity to call out foreign countries and expose the laws, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers.

The Report identifies foreign trading partners where IP protection and enforcement has deteriorated or remained at inadequate levels and where U.S. persons who rely on IP protection have difficulty with fair and equitable market access.

Ongoing Challenges and Concerns

Challenges to intellectual property (IP) protection and enforcement in Russia include continued copyright infringement, trademark counterfeiting, and the existence of non-transparent procedures governing the operation of collective management organizations (CMO). In particular, the United States is concerned about stakeholder reports that IP enforcement overall is down from where it was a decade ago, and that Russian enforcement agencies continue to lack sufficient staffing, expertise, and the political will to combat IP violations and criminal enterprises.

Developments, Including Progress and Actions Taken

Russia took some positive steps in 2018, but the overall IP situation remains extremely challenging. The lack of robust enforcement of IP rights is a persistent problem, which has been compounded by long delays regarding criminal action and prosecutions. Additionally, burdensome procedural requirements continue to hinder right holders’ ability to bring civil actions, which are exacerbated for foreign right holders by strict documentation requirements such as verification of their corporate status.

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. While recent implementation of anti-piracy legislation holds some promise, Russia remains home to several sites that facilitate online piracy, as identified in the 2018 Notorious Markets List. Stakeholders continue to report significant piracy of video games, music, movies, books, journal articles, and television programming. Mirror sites related to infringing websites are playing a role in the surge of the number of pirate websites in Russia.

Russia needs to direct more action to rogue web platforms targeting audiences outside the country. Recently, right holders and Internet platforms in Russia signed an anti-piracy memorandum to facilitate the removal of links to infringing websites. However, this memorandum is set to expire in September 2019, and compliance is unlikely if legislation is not adopted by this deadline. Furthermore, Russia has enacted legislation that enables right holders to obtain court-ordered injunctions against pirate websites, but additional steps must be taken to target the root of the problem—namely, investigating and prosecuting the owners of the large commercial websites distributing pirated material, including software.

Moreover, stakeholders report a 200 percent increase since 2015 in unauthorized camcords that often appear on the Internet within a few days of a movie’s theatrical release. Stakeholders further report that these problems negatively affect, in particular, independent producers and distributors, the majority of which are small and medium-sized enterprises.

Royalty collection by CMOs in Russia continues to lack transparency and fails to meet international standards. The United States encourages CMOs to update and modernize their procedures, including the full representation of right holders in CMO governing bodies, regardless of whether right holders are individuals or legal entities.

Russia remains a thriving market for counterfeit goods sourced from China. Similarly, there is little enforcement against counterfeits trafficked online, including apparel, footwear, sporting goods, pharmaceutical products, and electronic devices.

The United States is also concerned about Russia’s implementation of its World Trade Organization commitments related to the protection against the unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products. Stakeholders report that Russia is eroding protections for undisclosed data, and the United States urges Russia to adopt a system that meets international norms of transparency and fairness. Stakeholders are also concerned about recent regulatory initiatives that reportedly may inappropriately expand the use of compulsory licensing.

The United States urges Russia to develop a more comprehensive, transparent, and effective enforcement strategy to reduce IP infringement, particularly the sale of counterfeit goods and the piracy of copyright-protected content. The United States continues to monitor Russia’s progress on these and other matters through appropriate channels.

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