On the Watch List: 5 Countries Not Strengthening Intellecutal Property Rights
In the previous post, the Property Rights Alliance (PRA) highlighted 4 countries that were taken off the US Trade Representative’s Watch List for their efforts to improve IPR protection. Yet despite these improvements, 40 countries continue to be monitored for their enforcement weaknesses. The PRA would like to highlight 5 countries that regularly make either the priority or general watch lists. China, Russia, India, Mexico, and Brazil all have serious IP protection shortfalls that need to be corrected.
China is notorious for trafficking counterfeit software and entertainment. According to the 2010 International Property Rights Index (IPRI), “pirated business software and music still account for 80 percent and 90 percent of their markets, respectively.” The USTR states that 79 percent of counterfeit goods confiscated at the US border are from China. Furthermore, China’s protectionist scheme—indigenous innovation—levies onerous rules on companies that sell foreign goods. It has become so hard to buy and sell certain foreign products that people now prefer the black market as an alternative.
Russia remains on the Priority Watch List because of its reluctance to enact any meaningful IP protections. In a 2006 bilateral agreement with the U.S., Russia agreed to address several issues and to comply with the WTO’s TRIPS agreement. While Russia enacted several IP amendments to its civil code, as of 2010, none of the provisions agreed upon have become law. As a result, levels of internet, optical disc, and pharmaceutical piracy remain high.
India remains on the watch list because of its underdeveloped legal regime. Although it has made some improvements, it still lacks strong laws to protect patent and copyrights holders. As a result, counterfeits are rampant, with counterfeit pharmaceuticals being a huge problem. The health and safety of potentially millions of people are at risk because of dangerous fake drugs. It is no wonder that India’s IP rating has decreased every year since the IPRI’s inception, from 6.1 in 2007 to 5.5 in 2010.
Mexico, America’s 3rd largest trading partner, remains on the list for poor coordination between law enforcement officials at the federal, state, and local levels. There is scant protection against illegal commercial use and a weak system for patenting pharmaceuticals, which results in increased black market trading. According to Carlos Ignacio Gutiérrez and Alberto Saracho of the Fundación IDEA, “the informal economy employs more than half of all Mexican workers and produces at least 30 percent of the nation’s GDP…In Mexico, it is possible to buy illegal copies of movies, music, software, medicines, and other products without consequences.”
Though Brazil’s overall IPRI score increased this year, its IP component score remained the same. Brazil remains on the watch list because of its lack of border enforcement and its noncompliance with WIPO treaties. Moreover, Brazil’s lack of tough punishments for IP infringement provides little deterrent for potential criminals.
If these states would strengthen their protections, the results would be staggering. Trade and foreign direct investment would increase. Businesses would have more incentives to grow and hire. Furthermore, strong IP laws could protect millions from fake drugs.