Report: US puts India, China on watch list for intellectual property violations

The United States put China and India on a priority watch list of nations that have fallen well short of protecting and enforcing a broad range of intellectual property rights.

The U.S. Trade Representative blasted India not only for its practices but for its failure to discuss U.S. concerns about intellectual property theft, including the proliferation of counterfeit drugs.

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USTR stopped short of deeming India a "priority foreign country" the worst possible designation ahead of the completion of elections and the U.S. intention to seek greater cooperation between the two nations once the new government is in place in late May, according to the Special 301 report released Wednesday. 

Concerns about India's trade practices have increased among congressional lawmakers and business groups in the past year with calls for more action to stem the tide of IP violations. 

“The Obama Administration is committed to meaningful and sustained engagement with trading partners — from China to India to Canada — with the goal of resolving intellectual property-related concerns so that Americans and American firms can compete on a level playing field in those markets,” said USTR Michael Froman.

During the review “industry and other stakeholders expressed a heightened level of concern about the deterioration in India’s environment for IP protection and enforcement.”

Mark Elliot, executive vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center, said he is encouraged that USTR “recognizes the growing concerns with India’s deteriorating IP environment, and support the decision to initiate an ‘out-of-cycle’ review of India."

USTR announced that it will conduct the additional reviews to promote engagement and progress on challenges identified in this year’s reviews of India, Kuwait, Paraguay and Spain.

“We hope that this step will generate much needed dialogue for the U.S. and Indian governments to address the concerns identified in the report,” Elliot said.

The report also said that the United States “is particularly concerned over online piracy in India given the size and growth of India’s market.”

On top of piracy, there are growing concerns about trade secret protection and copyright enforcement.

In China, the USTR said it had "significant concerns" about trade-secret theft and has urged government officials to implement steps to stop the practice.

“Given the size of China’s consumer marketplace and its global importance as a producer of a broad range of products, China’s protection and enforcement of IPR will continue to be a focus of U.S. trade policy,” the report said.

Italy and the Philippines were removed from the list and Israel was taken off earlier this year.

Elliott also highlighted the report's country-specific challenges, including Canada’s “test for patent utility and the substantial size and scope of IP infringement in China.”

“We urge USTR to continue to work with these countries to create comprehensive action plans that foster robust IP environments for investment, innovation, and international trade,” he said. 

Ukraine was named a "priority foreign country" last year but was taken off the list for now even though concerns remain amid the political conflict with Russia.

USTR said it examined 82 trading partners for this year's Special 301 Report, and placed 10 on the priority watch list and 27 on the watch list.

Besides India, Algeria, Argentina, Chile, China, Indonesia, Pakistan, Russia, Thailand, and Venezuela too have been placed on the priority watch list.

Those nations on the watch list are: Barbados; Belarus; Bolivia; Brazil; Bulgaria; Canada; Colombia; Costa Rica; Dominican Republic; Ecuador; Egypt; Finland; Greece; Guatemala; Jamaica; Kuwait; Lebanon; Mexico; Paraguay; Peru; Romania; Tajikistan; Trinidad and Tobago; Turkey; Turkmenistan; Uzbekistan; and Vietnam.

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