Today USTR released its annual Special 301 Report on Intellectual Property Rights. The report highlights countries of concern with regard to intellectual property (IP) protections and enforcement and examines market access issues. This report is of great interest to the NAM, as manufacturers increasingly rely on robust protection and vigorous enforcement of IP rights.

Most notably, the report underscores serious concerns with China’s misappropriation of trade secrets and other issues; adds Barbados, Bulgaria, Paraguay and Trinidad and Tobago to the Watch List; and, designates Ukraine a Priority Foreign Country (PFC). In addition, manufacturers note that Canada was upgraded in this year’s report.

While USTR praises the progress that Canada has made in a number of IP areas in the last year, the NAM would be remiss if we failed to note that the pharmaceutical IP situation in Canada, particularly patent utility, remains a serious concern to manufacturers. Canadian courts have invalidated pharmaceutical patents for major products based on a heightened standard for what is useful under patent law. This makes Canada unique among developed countries – and not in a positive way. Our hope is that USTR will continue working with Canada to address this, as all pharmaceutical patents, and potentially those in other industries, are now seriously under threat.

This year’s Priority Watch List includes the following nations: Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela.  While manufacturers face serious challenges in many of those countries, we are particularly concerned by India’s recent actions.  Manufacturers have seen firsthand the situation in India deteriorating over the last year and a half as India has taken a number of deeply troublesome actions, particularly through the rejection of legitimate patent applications, the issuance of compulsory licenses in flagrant disregard of international rules, and the implementation of India’s preferential market access (PMA) policy.

The NAM’s statement for a recent House Trade Subcommittee hearing summarizes some of the key barriers in India as follows: “Manufacturers face persistent challenges in India, including tax and market access issues, localization barriers to trade, lack of or inadequate protections for intellectual property rights and other investment or trade-restrictive policies.” IPR protection and enforcement challenges in India are indeed mounting, raising serious questions about India’s business and innovation climate and undermining the business community’s confidence in India.

IP rights are the lifeblood of the U.S. economy, and the protection of those rights assures manufacturers that their innovations will be secure as build industries around them and create jobs. Manufacturers in every U.S. state rely on IP rights as an integral part of business both domestically and globally. As the U.S. Department of Commerce found in its April 2012 report, IP-intensive industries accounted for $775 billion, or 60.7 percent, of total U.S. merchandise exports in 2010.  For all these reasons, manufacturers will continue to be vigilant in their work with the Administration and Congress to address serious IP violations and lack of enforcement in numerous countries.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

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