China, Russia singled out as main offenders

WASHINGTON — The U.S. trade representative once again fingered China and Russia as the world’s main violators of intellectual property rights.

“Innovation is the lifeblood of a dynamic economy here in the United States, and around the world,” said trade rep Susan C. Schwab in a statement. “We must defend ideas, inventions and creativity from ripoff artists and thieves.”

In its annual “Special 301″ report chronicling the adequacy and effectiveness of intellectual property rights protection among U.S. trading partners, the USTR placed 12 countries on its “Priority Watch List,” which identifies those where intellectual property rights are most seriously violated or threatened (see chart).

The good news: Brazil, Bahamas, Bulgaria, Croatia, the EU and Latvia had improved intellectual property rights protections enough to warrant either transfer from the Priority Watch List to the regular Watch List or complete removal from either list.

But the trade rep noted that despite “some evidence of improvement,” the 301 report again this year “highlights the prominence of concerns with respect to China and Russia.”

“Large-scale production and distribution of IP-infringing optical media and minimally restrained Internet piracy are among the major problems (in Russia) that require more enforcement action,” Schwab said. “The coming months will be a critical period, as Russia moves to implement a variety of legal and law enforcement improvements to which it committed as part of a bilateral agreement with the United States on Russia’s eventual accession to the World Trade Organization.”

Schwab brought up the Bush administration’s move to file a grievance with the WTO against China over intellectual property rights violations, an act that provoked ire from Beijing.

“Our recent decision to pursue IPR-related concerns in China through consultations under WTO dispute settlement rules demonstrates our determination to defend vigorously American innovation,” she said. “The Special 301 report flags many other issues on which we hope to remain constructively engaged with China, building on the recognition of many Chinese officials that their country has its own huge stake in effective IPR protection.”

Commenting on the trade rep’s move in a statement, Motion Picture Assn. of America topper Dan Glickman said, “Today’s report indicates the scope of global piracy and serves as a sobering reminder of the challenges ahead.”

Indeed, Glickman and MPAA expressed disappointment that Canada was not added to the Priority Watch List. “Canada is now, and has been for some time, a haven for camcord thieves who are often linked to highly organized criminal networks that profit handsomely from their activities. This is of utmost concern given that Canada is a major trading partner and should be a global leader in IP protections.”

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