# Special 301 Report/2014/Executive Summary

EXECUTIVE SUMMARY
The Special 301 Report is the result of an annual review of the state of intellectual property rights (IPR) protection and enforcement in U.S. trading partners around world, which the Office of the United States Trade Representative (USTR) conducts pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (19 U.S.C. § 2242).
This Report reflects the Administration's continued resolve to encourage and maintain adequate and effective IPR protection and enforcement worldwide. It identifies a wide range of concerns, including: (a) the deterioration in IPR protection, enforcement, and market access for persons relying on IPR in a number of trading partners; (b) reported inadequacies in trade secret protection in China, India, and elsewhere, as well as an increasing incidence of trade secret misappropriation; (c) troubling "indigenous innovation" policies that may unfairly disadvantage U.S. rights holders in China; (d) the continuing challenges of copyright piracy over the Internet in countries such as Brazil, China, India, and Russia; (e) market access barriers, including nontransparent, discriminatory or otherwise trade-restrictive measures, that appear to impede access to healthcare; and (f) other ongoing, systemic IPR enforcement issues in many trading partners around the world.
USTR looks forward to working closely with the governments of the trading partners that are identified in this year's Special 301 Report, to address both emerging and continuing concerns, and to continue to build on the positive results that many of these governments have achieved.
Public Engagement
USTR continued to enhance public engagement in this year's Special 301 process, to facilitate sound, well-balanced assessments of IPR protection and enforcement efforts of particular trading partners, and to help ensure that the Special 301 review is based on a full understanding of the various IPR issues in trading partner markets. USTR requested written submissions from the public through a notice published in the Federal Register on January 3, 2014. In addition, on February 24, USTR conducted a public hearing that provided the opportunity for interested persons to testify before the interagency Special 301 Subcommittee about issues relevant to the review. The hearing featured testimony from witnesses such as representatives of foreign governments, industry, and non-governmental organizations. For the first time, USTR recorded and posted on its website the testimony at the Special 301 hearing, and also offered a two-week post-hearing comment period during which hearing participants and interested parties could submit additional information in support of, or in response to, hearing testimony. The 2014 Federal Register notice – and post-hearing comment period – drew submissions from over 100 interested parties, including 21 trading partner governments. These submissions are available to the public online at www.regulations.gov, docket number USTR-2013-0040. The public can access both the video and transcript of the hearing at www.ustr.gov.
​Country Placement
The Special 301 designations and actions announced in this Report are the result of deliberations among all relevant agencies within the U.S. Government, informed by extensive consultation with affected stakeholders, foreign governments, the U.S. Congress, and other interested parties.
USTR, together with the Special 301 Subcommittee of the Trade Policy Staff Committee, conducts a balanced assessment of U.S. trading partners' IPR protection and enforcement, as well as related market access issues, in accordance with the statutory criteria set out by the U.S. Congress. (See Annex I).
This assessment is necessarily conducted on a case-by-case basis, taking into account diverse factors such as a trading partner's level of development, its international obligations and commitments, the concerns of rights holders and other interested parties, and the trade and investment policies of the United States. It is informed by the various cross-cutting issues and trends identified below in Section I – Developments in Intellectual Property Rights Protection and Enforcement. Each assessment is based upon the specific facts and circumstances that shape IPR protection and enforcement regimes in a particular trading partner.
In the year ahead, USTR will continue its bilateral engagement with the governments of the trading partners that are discussed in this Report. In preparation for, and in the course of, those interactions, USTR will:
* Engage with U.S. stakeholders, the U.S. Congress, and other interested parties to ensure that the U.S. Government's position is well-informed by the full range of views on the pertinent issues;
* Conduct extensive discussions with individual trading partners regarding their respective IPR regimes;
* Encourage those trading partners to engage fully, and with the greatest degree of transparency, with the full range of stakeholders on IPR matters; and
* Identify, where possible, appropriate ways in which the U.S. Government can be of assistance. (See Annex 2 for examples).
USTR will conduct these discussions in a manner that both advances the policy goals of the United States and respects the importance of meaningful policy dialogue with U.S. trading partners. Additionally, USTR will continue to work closely with other U.S. Government agencies to ensure consistency of U.S. trade policy objectives with other Administration policies.
2014 Special 301 List
The Special 301 Subcommittee of the TPSC reviewed 82 trading partners in this year's Special 301 process. The Subcommittee received stakeholder input on nearly 100 trading partners, but focused the review on those submissions that complied with the requirement in the Federal ​Register notice to identify whether a particular trading partner should be named as a Priority Foreign Country (PFC), placed on the Priority Watch List (PWL) or Watch List (WL), or not listed in the Report, and that were received by the deadlines provided in the notice. Following extensive research and analysis, USTR has listed 37 trading partners as follows:
Priority Watch List: Algeria; Argentina; Chile; China; India; Indonesia; Pakistan; Russia; Thailand; and Venezuela; and
Watch List: Barbados; Belarus; Bolivia; Brazil; Bulgaria; Canada; Colombia; Costa Rica; Dominican Republic; Ecuador; Egypt; Finland; Greece; Guatemala; Jamaica; Kuwait; Lebanon; Mexico; Paraguay; Peru; Romania; Tajikistan; Trinidad and Tobago; Turkey; Turkmenistan; Uzbekistan; and Vietnam.
The Report also provides an update on the results of the Section 301 investigation of Ukraine following Ukraine's designation as a Priority Foreign Country on May 1, 2013.
Out-of-Cycle Reviews
An Out-of-Cycle Review (OCR) is a tool that USTR uses to encourage progress on IPR issues of concern. It provides an opportunity for heightened engagement and cooperation with trading partners to address and remedy such issues. Successful resolution of specific IPR issues of concern can also lead to a change in a trading partner's Special 301status outside of the typical time frame for the annual Special 301 Report. In the coming months, USTR will conduct OCRs of Priority Watch List country India and Watch List countries Kuwait and Paraguay. Details appear in the country-specific discussions below. Although Spain is not listed in the 2014 Special 301 Report, USTR will continue to conduct an OCR of Spain, announced in 2013, that is focused in particular on concrete steps taken by Spain to combat copyright piracy over the Internet. USTR may conduct additional OCRs of other trading partners as circumstances warrant, or as requested by the trading partner.
Out-of-Cycle Review of Notorious Markets
In 2010, USTR began publishing the Notorious Markets List as an OCR separately from the annual Special 301 Report. The Notorious Markets List identifies selected markets, including online markets, that are reportedly engaged in piracy and counterfeiting, according to information submitted to USTR in response to a request for comments pursuant to a Federal Register notice. USTR requested such comments on September 20, 2013, and published the 2013 Notorious Markets List on February 12, 2014. USTR plans to conduct its next Notorious Markets OCR in the fall of 2014. The Notorious Markets List is available at www.ustr.gov.
Format of the Special 301 Report
The Special 301 Report is divided into the following two Sections and three Annexes.
* Section I. Developments in Intellectual Property Rights Protection and Enforcement discusses broad global trends and issues in IPR protection and enforcement that the U.S. Government works to address on a daily basis.
* Section II. Country Reports includes descriptions of issues of concern with respect to particular trading partners.
* Annex 1 describes the statutory basis of the Special 301 Report.
* Annex 2 highlights U. S. Government-sponsored technical assistance and capacity building efforts.
* Annex 3 highlights new ratifications and accessions to the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty (WPPT) and the WIPO Copyright Treaty (WCT) (collectively, the WIPO Internet Treaties).