Monday 3 June 2013


The U.S. is watching you....

 Source: here. No, he doesn't offer
an IP watching service
When we hear that the government (or big brother) is watching us or plans to do so, it tends to generate some sense of unease. Most may find it irrelevant or not too concerned on the grounds that they have nothing to hide; while others value privacy and liberty regardless of their innocence. This Leo is thinking: can you bring about behavioural change by monitoring others? The U.S. thinks so with the Special 301 Report.

The Special 301 Report is an annual report prepared by the Office of the United States Trade Representative (USTR) pursuant to section 182 of the Trade Act  of 1974. For sake of brevity, this section authorises the US government to monitor the intellectual property (IP) regime of its trading partners and identify those whose policies or practices (or lack of) adversely affect U.S. IPRs owners. Section 301 of the Trade Act allows for an investigation and subsequent action to be taken against those countries designated as Priority Foreign Country (PFC). 

There are three main categories of awards dished out by the USTR in the Special 301 Report:

(1) Priority Foreign Country (PFC): "...The PFC designation is reserved by statute for countries with the most egregious IPR-related acts, policies and practices with the greatest adverse impact on relevant U.S. products, and that are not entering into good faith negotiations or making significant progress in negotiations to provide adequate and effective IPR protection." (Afro Leo calls this "the first class honours" as it is statutory)

(2) Priority Watch List (PWL): "....Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IPR. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas." (The second class honours)

(3) Watch List (WL):  Same description as PWL except on a lesser scale. (The third class honours) 

Did any African country make it into the 2013 Special 301 Report awards list?

Yes, two of them. First is Algeria who took home the second class honours award. According to the Report, "Algeria remains on the Priority Watch List in 2013. The United States continues to urge Algeria to address the ban on an increasing number of imported pharmaceutical products and medical devices in favor of local products..." (see page 30) (Afro Leo wants the USTR to note that Algeria has been commended on our own A-Z IP office website Review as exemplary)

The second is Egypt who took home the third class honours award. According to the Report, "Egypt remains on the Watch List in 2013. IPR challenges for Egypt include the failure to issue deterrent-level sentences for IPR violations when offenders are convicted and the need for additional training for enforcement officials...." (Again, Afro Leo reminds the USTR that, similar to Algeria above, Egypt has been exemplary in our A-Z Review)

Other findings
The Report did not note any worthy or positive IP development in any African country (see pages 9 - 11) but it affirms the U.S' support for developing and least-developing countries to utilise the flexibilities within TRIPS (see pages 22 - 23). For individual reports on the 41 listed countries, see pages 28 - 56. Finally, it seems the USTR mainly focused on trade mark and copyright issues.

This annual ritual in form of the Special 301 Report reminds this Leo that IP is imperative, special and more valuable to one country (or a few) than others. In general, the Report and its ramifications serve as one of those tools used by the U.S. to put pressure on its trading partners to provide for adequate IPRs protection and enforcement (or what most, rightly, view as TRIPS-plus regime). Some argue that the ramifications of the PFC designation  violates international trade rules.

In 2001, Ukraine was listed as a PFC; but after negotiations and "doing as instructed", this status, including accompanying sanctions, was lifted in 2005. Seven years later, Ukraine has once again picked up the first class honours and investigation has now begun in accordance with 19 U.S.C. § 2242(b)(1)(C). Well, it seems watching or monitoring only brings about an interim change. (Afro Leo is not too concerned since just 2 African countries made this year's U.S. naughty IP awards list. Perhaps, it demonstrates that African countries are not really the target - yet).

So this Leo says to Algeria and Egypt: the U.S. is watching you.

For executive summary of the Report, see here and an analysis here
The EU thought the Special 301 Report was unfair, see here
The IPKat looks at Ukraine's re-emergence as a PFC, see here
Controversy surrounds data centre in the US, see here
"Surveillance can be a tricky affair in the Internet age", see here



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Write comments
4 June 2013 at 22:10 delete

Kingsley, I think you mean Algeria received second class honours.

The effect of the list goes far beyond changes to foreign countries' IP laws. As Kingsley properly suggests, it's about "behavioural change." It's interesting to see the changes created by just the threat of appearing on the list.

While the list is produced by the US government, inclusion on the list is often influenced by the International Intellectual Property Alliance (IIPA) - which is a purely US private organization, despite it's name. Luckily (I think), the US government does not automatically include every country suggested by the IIPA. IIPA's website:

6 June 2013 at 12:59 delete

Thank you Kingsley for this post. As goldentail rightly said, it would be interesting to see what changes the threat of the list generates.

However, there is always the question of whether this list and its consequences (i.e. what the US will do) says anything about the effectiveness of TRIPS and WTO dispute settlement panels. Perhaps in this case, it is best to tackle the issue of IP infringement on all fronts...

6 June 2013 at 19:45 delete

Aurelia, yes, second class honours
:-) IIPA is a very influential & proactive (interested party) in the Special 301 Report exercise

@Ifeoma, let's see if Algeria & Egypt will pick up honours awards, again, next year :-)