Ukraine has been flagged by the Office of the United States Trade Representative as the worst abuser of U.S. intellectual property (IP) rights. The designation was part of the agency’s annual report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of IP rights.
As explained by the U.S. Trade Representative, the agency designated Ukraine a Priority Foreign Country (PFC) due to severe deterioration of IP enforcement. Specifically referenced areas of concern included “government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorization and operation of copyright collecting societies.”
This was the first time in seven years that a country earned this designation. The PFC designation is reserved by statute for countries with the most egregious IP rights violations, 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. Under Section 301 of the 1974 Trade Act, the United States is authorized to seek sanctions directly or through the World Trade Organization (WTO).
• USTR reports grave concerns about misappropriation of trade secrets in China, and incremental progress on a few of China’s many other significant IPR and market access challenges;
• USTR adds Barbados, Bulgaria, Paraguay, and Trinidad and Tobago to the Watch List due to specific problems identified in the report;
• USTR announces that while El Salvador and Spain are not listed in the Report, USTR will conduct out-of-cycle reviews to assess progress on IPR challenges identified in this year’s reviews of those countries;
• Canada moves from the Special 301 Priority Watch List to the Watch List in recognition of significant progress on copyright issues, while USTR continues to work with Canada to address several remaining IPR concerns; and
• Brunei Darussalam and Norway move off of the Special 301 Watch List.
As the report highlights, “Thefts may arise in a variety of circumstances, including those involving departing employees, failed joint ventures, cyber intrusion and hacking, and misuse of information submitted to government entities for purposes of complying with regulatory obligations.” The report also notes that “public reports have further indicated that actors affiliated with the Chinese military and Chinese Government have systematically infiltrated the computer systems of over one hundred U.S. companies and stolen hundreds of terabytes of data, including all forms of trade secrets, such as proprietary technology, manufacturing processes, and confidential business information.”
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