# Special 301 Report/2012/Executive Summary

EXECUTIVE SUMMARY
The "Special 301" Report is an annual review of the state of intellectual property rights (IPR) protection and enforcement in 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 (enacted in 1994).
This Report reflects the Administration's resolve to encourage and maintain adequate and effective IPR protection and enforcement worldwide. It identifies a wide range of concerns, including troubling "indigenous innovation" policies that may unfairly disadvantage U.S. rights holders in China, the continuing challenges of copyright piracy over the Internet in countries such as Canada, Italy, and Russia, and other ongoing, systemic IPR enforcement issues presented 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 its enhanced approach to public engagement activities in this year's Special 301 process. These activities are designed to help facilitate sound, well-balanced assessments of IPR protection and enforcement efforts of particular trading partners, and to help ensure that Special 301 decisions are based on a robust understanding of the complicated IPR issues that various trading partners may encounter.
USTR requested written submissions from the public through a notice published in the Federal Register on December 28, 2011. This year's notice yielded 42 comments from interested parties. USTR also received submissions from 18 trading partners. The submissions that USTR received were made available to the public online at www.regulations.gov, docket number USTR-2011-0021. In addition, on February 23, 2012, USTR conducted a public hearing that allowed interested persons to testify before the interagency Special 301 subcommittee about issues relevant to the review. The hearing featured testimony from 12 witnesses, including representatives of foreign governments, industry, and non-governmental organizations. A transcript of the hearing is available 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, works to make a well-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 Congress (see Annex 1).
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 to interact closely 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 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 range of stakeholders on IPR matters; and
* identify, where possible, ways in which the United States can be of assistance.
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 works closely with other U.S. Government agencies to ensure consistency of U.S. trade policy objectives with other Administration policies. For example, as described in Section I of this Report, USTR has convened a new subcommittee of the interagency Trade Policy Staff Committee, called the "Trade Enhancing Access to Medicines" (TEAM), to investigate how to best deploy the tools of trade policy to further the Administration's objective of promoting trade in, reducing obstacles to, and enhancing access to both innovative and generic medicines.
2012 Special 301 List
​The 2012 Special 301 review process examined IPR protection and enforcement in 77 trading partners. Following extensive research and analysis, USTR has listed the 40 trading partners below as follows:
Priority Watch List: Algeria, Argentina, Canada, Chile, China, India, Indonesia, Israel, Pakistan, Russia, Thailand, Ukraine, Venezuela.
Watch List: Belarus, Bolivia, Brazil, Brunei Darussalam, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Mexico, Norway, Peru, Philippines, Romania, Tajikistan, Turkey, Turkmenistan, Uzbekistan, Vietnam.
Section 306 Monitoring: Paraguay.
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 with trading partners to address and remedy such issues. Successful resolution of specific IPR issues of concern can lead to a change in a trading partner's status on a Special 301 list outside of the typical time frame for the annual Special 301 Report. USTR may conduct OCRs in consultation with a trading partner as circumstances warrant.
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 ones on the Internet, that are reportedly engaged in piracy and counterfeiting, according to information submitted to the USTR in response to a request for comments. USTR requested such comments on September 22, 2011, and published the 2011 OCR of Notorious Markets on December 20, 2011.
USTR plans to conduct an OCR on notorious markets in the fall of 2012.
Format of the Special 301 Report
The Special 301 Report is divided into the following two main sections and two Annexes:
* Section I: Developments in Intellectual Property Rights Protection and Enforcement discusses broad global trends and issues in IPR protection and enforcement that USTR 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 background of the Special 301 Report.
* Annex 2 provides information about parties to the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty (WPPT) and the WIPO Copyright Treaty (WCT) (collectively, the WIPO Internet Treaties).