*EPF310 05/01/2002
Excerpts: USTR Designates Five Asian Countries for "Watch List"
(Excerpt from 2002 intellectual property protection report) (1310)

The Office of the U.S. Trade Representative (USTR) placed five Asian countries on its "Watch List" for having problems with intellectual property protection, according to the USTR's annual "Special 301" report released April 30.

The five Asian "Watch List" countries are South Korea, Thailand, Vietnam, Malaysia, and New Zealand.

Countries that the USTR determines as having some intellectual property problems -- but not serious enough to be placed on the "Priority Watch List" -- are designated for the "Watch List." Countries placed on the "Watch List" are monitored to determine whether further U.S. action is necessary; listing simply serves as a warning that the USTR will monitor intellectual property right protection policies and practices in the country.

Following are excerpts from the 2002 USTR report focusing on U.S. trading partners in Asia placed on the Watch List:

(begin excerpts)

2002 SPECIAL 301 REPORT
2002 Special 301 Index --> Watch List
WATCH LIST
...

KOREA

Korea has taken significant steps to strengthen its IPR enforcement and legislation. On enforcement, it has created a new special enforcement unit which it intends to provide with "police" authority, to step up its protection against software piracy. In addition, to address concerns the U.S. Government has raised about Korea's failure to implement a transparent, non-discriminatory, and sustained enforcement regime, Korea has agreed to provide the United States with detailed data on its enforcement efforts. Korea has made progress on strengthening its intellectual property legislation, addressing several U.S. concerns related to its Copyright Act and the Computer Program Protection Act. It also announced that it is preparing legislation to provide exclusive transmission rights for sound recordings and performances, which will resolve a longstanding concern. Despite these important developments, U.S. concerns remain with respect to the protection of temporary copies, technical protection measures, ISP liability, and ex parte relief, the lack of full retroactive protection for pre-existing copyrighted works, and continued counterfeiting of consumer products. Regarding issues related to the protection of pharmaceutical patents, Korea resolved questions related to its commitment to provide full protection against unfair commercial use of test data submitted for marketing approval, but the lack of coordination between Korean health and IPR authorities on drug product approvals for marketing remains problematic.
...

MALAYSIA

Optical media piracy remains a serious problem in Malaysia. Malaysia's production capacity of optical media exceeds local demand plus legitimate exports, and pirated products believed to have originated in Malaysia have been identified throughout the Asia-Pacific region, North America, South America, Europe, Africa and the Middle East. Although the first year of implementation of the Optical Disk Act was hampered by a slow compliance schedule, the United States continues to appreciate the determined efforts made by agencies within Malaysia to eliminate optical media piracy. The Ministry of Domestic Trade and Consumer Affairs(MDTCA) has inspected licensed factories and conducted raids against pirate plants. Over the past two years, the MDTCA has confiscated a significant amount of pirate product from unlicensed factories and has seized and removed equipment and replication lines. These actions are evidence that Malaysia is serious about stamping out piracy. Although progress has been steady, there is concern that Malaysia has not established a climate of deterrence. Police raids have only infrequently been followed by criminal prosecutions. Without criminal prosecutions and the imposition of serious criminal sentences, there is no true deterrence to piracy in Malaysia The United States urges Malaysia to continue the progress made against illegal optical disk plants and to focus its attention on the problem of prosecutorial inaction and judicial delays in order to support the enforcement efforts already underway.

NEW ZEALAND

In 1999, New Zealand pledged to introduce legislation regarding imports of newly-released copyrighted products (e.g., music, films, software and books) intended for sale outside New Zealand. By the end of 2001, however, the government had not introduced this legislation. Therefore, the U.S. Government remains concerned about the erosion of the value of copyright protection and the threat of increased piracy of copyrighted goods in New Zealand. However, the United States is encouraged that New Zealand's parliament is currently considering legislation to strengthen New Zealand's enforcement regime with respect to copyright piracy and trademark counterfeiting, which may move towards addressing our concerns. The United States urges New Zealand to adopt legislation to correct the erosion of copyrights and improve enforcement against piracy and counterfeiting as soon as possible.
...

THAILAND

Overall, Thailand has made incremental progress on IPR issues. Pirate optical media production, distribution and export is a significant and growing problem facing U.S. copyright industries. Industry estimates a 300 percent increase in pirate optical disk plants operating in Thailand from 1999. Industry asserts that Thailand has become a primary destination for criminal organizations seeking new bases of operation as controls on illicit wares tighten around the region. Further complicating the protection of IPR in Thailand is the fact that end-user piracy of business software is endemic, perhaps as high as 76 percent, according to industry estimates. Thailand's Central Intellectual Property Court remains a bright spot in the country's efforts to safeguard IPR. The Court's overall effectiveness, however, is hampered by judicial delays, limited resources, and a lack of deterrent sentencing. Key high level Thai Government officials have recently demonstrated a troubling lack of support for the officers of the court and especially the relevant law enforcement agencies.

While the United States recognizes some progress has been made in the past year, the significant and growing problems of optical media production and end-user piracy of business software remain largely unaddressed. For these reasons, the United States will re-evaluate Thailand's IPR situation during an out-of-cycle Review to be conducted in the Fall. The OCR will focus on Thailand's progress in passing and implementing a satisfactory optical media bill; in implementing the Trade Secrets Act in a TRIPS-compliant manner; and most importantly, in launching a sustained enforcement drive against trademark counterfeiting and copyright piracy, including optical media and illegal end use of business software. The U.S. Government recognizes the important role played by law enforcement officials in this process, and encourages Thailand to provide enforcement authorities the resources and political backing necessary to ensure the successful implementation of a long-term aggressive enforcement policy.
...

VIETNAM

Enforcement of intellectual property rights (IPR) in Vietnam remains weak, and violations of IPR are rampant. While Vietnam did conduct considerable administrative and law enforcement actions against IPR violations over the past year, IPR enforcement remains the exception rather than the norm. Market access barriers, especially with regard to "cultural products," continue to impede the availability of legitimate product, further complicating efforts to combat piracy. In most cities, according to industry estimates, up to 100 percent of the music CDs, VCDs, and DVDs on sale are pirated. Trademark violations are also prevalent, with all types of clothing and other items carrying unlicensed versions of famous trademarks available at stands throughout major cities. In spite of this bleak portrait, Vietnam has taken two steps over the last year to strengthen its IPR regime. First, the U.S.-Vietnam Bilateral Trade Agreement, which entered into force on December 10, 2001, has major provisions on IPR that commit Vietnam to make its IPR regime, including enforcement, TRIPS-consistent within two years. Second, Vietnam continued over the past year to make strong progress in strengthening its IPR legal and enforcement structures, including implementing new regulations: (1)extending indefinite protection to well-known or famous marks; (2) protecting new plant varieties for the first time; and (3) providing procedures by which IPR owners can petition Vietnam customs to postpone temporarily the entry or exit of shipments of suspected pirated goods. The United States encourages Vietnam to effectively implement and enforce its new laws and regulations to reduce the pervasive piracy and counterfeiting that continue to exist.
...

(end excerpts)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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