# Special 301 Report/2010/Executive Summary

EXECUTIVE SUMMARY
The "Special 301" Report is an annual review of the global state of intellectual property rights (IPR) protection and enforcement, conducted by the Office of the United States Trade Representative (USTR) 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 effective IPR protection and enforcement worldwide. It identifies a wide range of serious concerns, ranging from troubling "indigenous innovation" policies that may unfairly disadvantage U.S. rights holders in China, to the continuing challenges of Internet piracy in countries such as Canada and Spain, to the ongoing systemic IPR enforcement challenges in many countries around the world. Positive accomplishments recognized in this year's Report include improved efforts by trading partners the Czech Republic, Hungary, and Poland, all of whom have been removed from the Watch List. Additionally, after successful Out-of-Cycle Reviews in 2009, Saudi Arabia was removed from the Watch List, and Israel has entered into an understanding with the United States whereby it will address key outstanding IPR issues.
In the year ahead, USTR looks forward to working with our trading partners to address emerging and continuing concerns, and building on the positive results achieved thus far.
Public Engagement
Consistent with the goals articulated in the President's 2010 Trade Policy Agenda, USTR has enhanced its public engagement activities in this year's Special 301 process. These activities are designed to ensure that Special 301 decisions are based on a robust understanding of complicated issues involving intellectual property and to help facilitate sound, well-balanced assessments of developments in particular countries.
USTR requested written submissions from the public through a notice published in the Federal Register on January 15, 2010. This year's review yielded 571 comments from interested parties, a significant increase from 2009. The submissions received by USTR were made available to the public online at www.regulations.gov, docket number USTR-2010-0003. Further, on March 3, 2010, USTR conducted a public hearing that permitted interested persons to testify before the interagency Special 301 subcommittee about issues relevant to the review. The hearing included testimony from 23 witnesses, ranging from foreign governments to industry representatives to 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 close consultations with affected stakeholders, interested parties, foreign governments, the U.S. Congress, and of interagency discussions within the U.S. Government.
USTR, together with the interagency Special 301 subcommittee, works to make a well-balanced assessment of intellectual property protection and enforcement, as well as related market access issues, in accordance with the statutory criteria set out by Congress in the Special 301 statute (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 IPR Protection and Enforcement. However, the assessment is especially based upon the particular facts and circumstances that shape IPR protection and enforcement regimes in a particular trading partner.
Going forward, USTR will continue to interact closely with the governments of the countries that are discussed in this report. USTR expects that, in preparation for and in the course of those interactions, it will:
* engage with U.S. stakeholders to ensure that the U.S. position with the foreign country is well-informed by the full range of views on the pertinent issues;
* conduct extensive discussions with individual countries regarding their respective IPR regimes;
* encourage those countries to engage fully and with the greatest degree of transparency with the full 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 the countries with which it is engaging.
Additionally, USTR works closely with other agencies to ensure consistency of United States trade policy with other Administration policies. For example, USTR works closely with the Department of Health and Human Services to ensure consistency of the Administration's trade policy (including support for the 2001 WTO Doha Declaration on the TRIPS Agreement and Public Health) with the Administration's health policy.
​2010 Special 301 List
The 2010 Special 301 review process examined IPR protection and enforcement in 77 countries. Following extensive research and analysis, USTR designates the 42 countries below as follows:
Priority Watch List: Algeria, Argentina, Canada, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, Venezuela.
Watch List: Belarus, Bolivia, Brazil, Brunei, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, Romania, Spain, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, Vietnam.
Section 306 Monitoring: Paraguay.
Status Pending: Israel.
2010 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 the trading partner on those issues. Successful resolution of specific IPR issues may in some circumstances lead to a change in a country's status on the Special 301 list outside of the typical time frame for the annual Special 301 Report. In 2010, USTR will conduct OCRs of the Philippines and Thailand to monitor progress on IPR protection and enforcement in those countries, and to consider again their Special 301 status.
Format of the Special 301 Report
The Special 301 Report is divided into the following three 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 in particular countries.
* Section III: Notorious Markets is a listing of Internet markets and physical markets of concern.
* Annex 1 provides the statutory background for the Special 301 Report.
* Annex 2 provides a list of contracting parties to the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty (WPPT) and the WIPO Copyright Treaty (WCT) (i.e., the WIPO Internet Treaties).