This document is available as a PDF.

PUBLIC KNOWLEDGE HEARING STATEMENT
2011 SPECIAL 301 REVIEW

The Special 301 Review process is a powerful tool to ensure protection for U.S. intellectual property interests. We urge the USTR to use this tool to secure the trade interests of all U.S. constituencies and not merely a narrow set of stakeholders. In previous years, the USTR has been persuaded by rights holder submissions and has used the Special 301 process to pressure countries to adopt copyright laws and policies that do not consider the importance of limitations and exceptions. For instance, the past few years have seen an increasing correlation between USTR determinations and IIPA requests, escalating from 83% in 2007 to 91% last year. In doing so, the USTR has ignored the interests of industries, such as the Internet and consumer electronics industries, which rely on copyright limitations and exceptions to market their products and services both in the U.S. and abroad. Such an approach is unfriendly to trade overall and contrary to the purposes of the Trade Act.

In addition, we urge the USTR not to coerce countries to provide for IP protections beyond the requirements of their international obligations. To the extent that the USTR seeks changes to domestic policies of other countries, the agency should do so through diplomatic engagement rather than trade pressures. This approach would foster better economic relationships between the U.S. and its trading partners.

In order to secure these objectives, the USTR should:

1) Be mindful of the importance of a balanced copyright regime in protecting the interests of IP owners and users;
2) Not use the Special 301 process as a means to coerce countries to accede to or implement treaties such as the Anti-Counterfeiting Trade Agreement; and
3) Introduce greater transparency into its review process.

1. The USTR should promote a balanced copyright regime.

A balanced copyright system that secures rights for the benefit of copyright owners and limitations and exceptions for the benefit of users has been the hallmark of U.S. law. This balance has fostered the development of creative industries, such as filmmaking, as well as innovative industries such as the Internet and consumer electronics industries. These industries rely on copyright limitations and exceptions to make and market their products and services in this country and abroad. Absence of this balance in other countries would harm the ability of these industries to export their products. Therefore, the USTR should not be swayed by rights holder assertions that limitations and exceptions in foreign domestic laws amount to a denial of IP protection. Such assertions are not consistent with U.S. copyright law. Furthermore, the Trade Act does not mandate a reading of IP protection that is inconsistent with principles of U.S. law.

2. Countries should not be forced to accede to agreements such as the WIPO Internet treaties or ACTA.

As we stated in testimony last year, countries may not accede to certain treaties out of concern that their provisions would not be conducive to their national interests. For example, in its 2009 comments, Israel questioned the relevance of technological protection measures in protecting copyright and therefore decided not to accede to the WIPO treaties. Similarly, developing countries may consider ACTA’s provisions too onerous. First, they may find that its requirements for IP protection are not conducive to their developmental goals such as securing access to affordable education, conducting research, or promoting technological advancement. Second, they may find ACTA’s enforcement obligations too onerous on their limited resources. Decisions not to accede to particular treaties are the prerogative of sovereign nations and must be respected.

If the USTR deems particular policies of countries inconsistent with those countries’ international obligations, it should engage with those countries diplomatically. This approach is particularly prudent in today’s world, where emerging economies are growing in strength and offer attractive market access opportunities for U.S. producers. Pressuring these countries to adopt particular IP provisions may push them to refuse to engage in trade with the U.S.

3. The Special 301 review process should be transparent.

As we stated last year, the evaluation criteria used to list countries on the priority watch list and watch list are vague. Often reports have contained general statements such as the need to improve enforcement without a further explanation of what this means. A clearer understanding as to why a country is cited can only be obtained by reference to the rights holder submissions, which often complain against countries for including copyright limitations and exceptions within their laws.

In addition, the Special 301 reports seem to rely on unverified rights holder assertions and discredited methods of estimating losses caused by intellectual property infringement. In order to address these shortcomings, we renew our calls to the USTR to:

1. Make transparent the set of factors and standards it uses for evaluating countries in each year’s special 301 report.

2. Provide a clear written explanation stating the basis for identification of a country in the Special 301 report and placement on the watch list and priority watch list, or for an out-of-cycle review.

3. Arrange for independent external verification of country data and statistics submitted by rights holders before making factual determinations based upon it.

This document is available as a PDF.

PUBLIC KNOWLEDGE HEARING STATEMENT
2011 SPECIAL 301 REVIEW

The Special 301 Review process is a powerful tool to ensure protection for U.S. intellectual property interests. We urge the USTR to use this tool to secure the trade interests of all U.S. constituencies and not merely a narrow set of stakeholders. In previous years, the USTR has been persuaded by rights holder submissions and has used the Special 301 process to pressure countries to adopt copyright laws and policies that do not consider the importance of limitations and exceptions. For instance, the past few years have seen an increasing correlation between USTR determinations and IIPA requests, escalating from 83% in 2007 to 91% last year. In doing so, the USTR has ignored the interests of industries, such as the Internet and consumer electronics industries, which rely on copyright limitations and exceptions to market their products and services both in the U.S. and abroad. Such an approach is unfriendly to trade overall and contrary to the purposes of the Trade Act.

In addition, we urge the USTR not to coerce countries to provide for IP protections beyond the requirements of their international obligations. To the extent that the USTR seeks changes to domestic policies of other countries, the agency should do so through diplomatic engagement rather than trade pressures. This approach would foster better economic relationships between the U.S. and its trading partners.

In order to secure these objectives, the USTR should:

1) Be mindful of the importance of a balanced copyright regime in protecting the interests of IP owners and users;
2) Not use the Special 301 process as a means to coerce countries to accede to or implement treaties such as the Anti-Counterfeiting Trade Agreement; and
3) Introduce greater transparency into its review process.

1. The USTR should promote a balanced copyright regime.

A balanced copyright system that secures rights for the benefit of copyright owners and limitations and exceptions for the benefit of users has been the hallmark of U.S. law. This balance has fostered the development of creative industries, such as filmmaking, as well as innovative industries such as the Internet and consumer electronics industries. These industries rely on copyright limitations and exceptions to make and market their products and services in this country and abroad. Absence of this balance in other countries would harm the ability of these industries to export their products. Therefore, the USTR should not be swayed by rights holder assertions that limitations and exceptions in foreign domestic laws amount to a denial of IP protection. Such assertions are not consistent with U.S. copyright law. Furthermore, the Trade Act does not mandate a reading of IP protection that is inconsistent with principles of U.S. law.

2. Countries should not be forced to accede to agreements such as the WIPO Internet treaties or ACTA.

As we stated in testimony last year, countries may not accede to certain treaties out of concern that their provisions would not be conducive to their national interests. For example, in its 2009 comments, Israel questioned the relevance of technological protection measures in protecting copyright and therefore decided not to accede to the WIPO treaties. Similarly, developing countries may consider ACTA’s provisions too onerous. First, they may find that its requirements for IP protection are not conducive to their developmental goals such as securing access to affordable education, conducting research, or promoting technological advancement. Second, they may find ACTA’s enforcement obligations too onerous on their limited resources. Decisions not to accede to particular treaties are the prerogative of sovereign nations and must be respected.

If the USTR deems particular policies of countries inconsistent with those countries’ international obligations, it should engage with those countries diplomatically. This approach is particularly prudent in today’s world, where emerging economies are growing in strength and offer attractive market access opportunities for U.S. producers. Pressuring these countries to adopt particular IP provisions may push them to refuse to engage in trade with the U.S.

3. The Special 301 review process should be transparent.

As we stated last year, the evaluation criteria used to list countries on the priority watch list and watch list are vague. Often reports have contained general statements such as the need to improve enforcement without a further explanation of what this means. A clearer understanding as to why a country is cited can only be obtained by reference to the rights holder submissions, which often complain against countries for including copyright limitations and exceptions within their laws.

In addition, the Special 301 reports seem to rely on unverified rights holder assertions and discredited methods of estimating losses caused by intellectual property infringement. In order to address these shortcomings, we renew our calls to the USTR to:

1. Make transparent the set of factors and standards it uses for evaluating countries in each year’s special 301 report.

2. Provide a clear written explanation stating the basis for identification of a country in the Special 301 report and placement on the watch list and priority watch list, or for an out-of-cycle review.

3. Arrange for independent external verification of country data and statistics submitted by rights holders before making factual determinations based upon it.