# Special 301 Report/2015/Executive Summary

EXECUTIVE SUMMARY
The Special 301 Report (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 the 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. The Report 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 online copyright piracy in countries such as Brazil, China, India, and Russia and trademark counterfeiting in China and elsewhere; (e) market access barriers, including nontransparent and discriminatory measures, that appear to impede access to products embodying IPR and measures that impede market access for U.S. entities that rely upon IPR protection; and (f) other ongoing, systemic IPR enforcement issues in many trading partners around the world.
The Report serves a critical function by identifying opportunities and challenges facing U.S. innovative and creative industries in foreign markets and by promoting job creation, economic development, and many other benefits that effective IPR protection and enforcement support. The Report informs the public and our trading partners and can serve as a positive catalyst for change.
USTR looks forward to working closely with the governments of the trading partners that are identified in this year's Report to address both emerging and continuing concerns, and to continue to build on the positive results that many of these governments have achieved.
The Special 301 Process
The Congressionally-mandated annual Special 301 Report is the result of an extensive multi-stakeholder process. Pursuant to the statute mandating the Report, USTR is charged with designating as Priority Foreign Countries those countries that have the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products. (See Annex 1). To facilitate administration of the statute, USTR has created a Priority Watch List and Watch List within this Report.
​Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IPR.
Public Engagement
USTR solicited broad public participation in the 2015 Special 301 review process to facilitate sound, well-balanced assessments of the IPR protection and enforcement efforts of trading partners, and to help ensure that the Special 301 review would be based on comprehensive information regarding IPR issues in trading partner markets.
USTR requested written submissions from the public through a notice published in the Federal Register on December 29, 2014 (Federal Register notice). In addition, on February 24, 2015, USTR conducted a public hearing that provided the opportunity for interested persons to testify before the inter-agency Special 301 Subcommittee of the Trade Policy Staff Committee (TPSC) about issues relevant to the review. The hearing featured testimony from witnesses, including representatives of foreign governments, industry, and non-governmental organizations. USTR recorded and posted on its public website the testimony at the Special 301 hearing, and offered a 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 Federal Register notice and post-hearing comment opportunity drew submissions from 55 interested parties, including 21 trading partner governments.
The submissions filed in response to the Federal Register notice, and during the post-hearing comment period, are available to the public online at www.regulations.gov, docket number USTR-2014-0025. The public can access both the video and transcript of the hearing at www.ustr.gov.
Country Placement
The Special 301 listings and actions announced in this Report follow intensive deliberations among all relevant agencies within the U.S. Government, informed by extensive consultation with participating stakeholders, foreign governments, the U.S. Congress, and other interested parties.
USTR, together with the Special 301 Subcommittee, conducts a broad and balanced assessment of U.S. trading partners' IPR protection and enforcement, as well as related market access issues affecting IPR-intensive industries, in accordance with the statutory criteria set out by the U.S. Congress. (See Annex 1). The Special 301 Subcommittee, through the TPSC, provides country placement recommendations to the USTR based on this assessment.
​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 in a particular trading partner.
In the year ahead, USTR will continue to engage 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 informed by the full range of views on the pertinent issues;
* Conduct extensive discussions with individual trading partners regarding their respective IPR regimes;
* Encourage 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).
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. In addition, 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.
The 2015 Special 301 List
The Special 301 Subcommittee reviewed 72 trading partners during the 2015 Special 301 process. The Subcommittee received stakeholder input on nearly 100 trading partners, but focused its review on those submissions that responded to the request set forth in the notice published in the Federal Register 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. Following extensive research and analysis, USTR has listed 37 trading partners as follows:
Priority Watch List: Algeria; Argentina; Chile; China; Ecuador; India; Indonesia; Kuwait; Pakistan; Russia; Thailand; Ukraine; and Venezuela; and
​Watch List: Barbados; Belarus; Bolivia; Brazil; Bulgaria; Canada; Colombia; Costa Rica; Dominican Republic; Egypt; Greece; Guatemala; Jamaica; Lebanon; Mexico; Paraguay; Peru; Romania; Tajikistan; Trinidad and Tobago; Turkey; Turkmenistan; Uzbekistan; and Vietnam.
Out-of-Cycle Reviews
An Out-of-Cycle Review (OCR) is a tool that USTR uses to encourage progress on IPR issues of concern. OCRs provide an opportunity for heightened engagement and cooperation with trading partners and other stakeholders to address and remedy such issues.
Country-Specific Out-of-Cycle Reviews
OCRs focus on identified IPR challenges in specific trading partner markets. Successful resolution of specific IPR issues of concern can lead to a positive change in a trading partner's Special 301 status outside of the typical time frame for the annual review. Conversely, failure to address identified IPR concerns, or further deterioration as to an IPR-related concern within the specified timeframe, can lead to an adverse change in status.
In the coming months, USTR will conduct several OCRs, including of the following trading partners.
* USTR has noted the willingness of two Watch List countries, Turkmenistan and Tajikistan, to work with the United States on improving their IPR protection and enforcement regimes and will conduct an OCR for each country to evaluate whether specific steps taken merit their removal from the Watch List.
* USTR will conduct an OCR of Honduras, which is not listed in the 2015 Report, to determine whether to place that country on the Watch List. This OCR will assess whether Honduras has acted to address widespread cable and satellite signal piracy, including through increased regulatory oversight, strengthened criminal IPR enforcement capacity, increased clarity in procedures relating to geographical indications, and improved the protection of test or other data generated to obtain marketing approval for certain regulated products.
* USTR extends the current OCR of Paraguay, which is currently on the Watch List, to provide additional time for conclusion of a bilateral IPR Memorandum of Understanding (MOU). USTR encourages Paraguay to conclude the MOU by June 30, 2015, and notes that, ​if Paraguay does not do so, USTR will evaluate possible implications accordingly, including with respect to Paraguay's status under Special 301.
* Although Spain is not listed in the 2015 Report, USTR continues the OCR of Spain, announced in 2013, which is focused, in particular, on concrete steps taken by Spain to combat copyright piracy over the Internet. While Spain has taken several positive steps, concerns remain, and additional steps are necessary.
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 online and physical markets that are reportedly engaged in copyright piracy and trademark counterfeiting, according to information submitted to USTR in response to a notice published in the Federal Register requesting public comments. USTR requested such comments on September 26, 2014, and published the 2014 Notorious Markets List on March 5, 2015. USTR plans to conduct its next Notorious Markets OCR in the fall of 2015. The Notorious Markets List is available at www.ustr.gov.
Structure of the Special 301 Report
The 2015 Report contains the following Sections and Annexes:
Section I. Developments in Intellectual Property Rights Protection and Enforcement discusses 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; and
Annex 2 highlights U.S. Government-sponsored technical assistance and capacity building efforts.