# Special 301 Report/2010/Section 1

SECTION I. DEVELOPMENTS IN IPR PROTECTION AND ENFORCEMENT
An important part of the mission of the United States Trade Representative is supporting and implementing the Administration's commitment to aggressively protect American intellectual property overseas. IPR infringement causes significant financial losses for rights holders and legitimate businesses around the world. It undermines key U.S. comparative advantages in innovation and creativity to the detriment of American businesses and workers. In its most pernicious forms it can also endanger the public. Counterfeiting of some products, such as automobile parts and medicines, poses a real risk to health and safety. Trade in counterfeit and pirated products often fuels cross-border organized criminal networks and hinders the sustainable economic development of many countries.
Because fostering innovation and creativity is essential to our prosperity and to the support of countless jobs in the United States, USTR works to protect American inventiveness and creativity with all the tools of trade policy, including this Report.
Positive Developments
Several countries made significant positive progress on IPR protection and enforcement in 2009 and early 2010. For example:
Countries being removed from the Special 301 Watch List:
* Czech Republic – The Czech Republic is being removed from the Special 301 Watch List because of significant progress made to effectively control its border markets over the past two years. Moreover, a new criminal code raising the maximum penalties for IPR related crimes from 2 to 8 years imprisonment and criminalizing the manufacture and storage of counterfeit items came into effect January 1, 2010. The United States will continue to monitor whether the new law results in the imposition of deterrent penalties.
* Hungary – Hungary is being removed from the Special 301 Watch List in recognition of the significant improvements on enforcement and other actions taken during the past year. Hungary has taken proactive steps to address the growing threat of Internet piracy, and its Customs and police officials have developed their ability to effectively identify infringing products. Through effective and consistent enforcement actions, Hungary has closed its notorious Verseny street market, which was home to an array of illegitimate products. Furthermore, Hungary has taken effective measures to protect IPR, including numerous public awareness raising campaigns and training and educational seminars for police, prosecutors, and judges. The United States will continue to monitor Hungary's progress to ensure that IPR protection and enforcement improvements are ongoing.
* Poland – Poland is being removed from the Special 301 Watch list in recognition of a significant reduction in the availability of pirated and counterfeit goods at border markets, increased and improved enforcement efforts, and to strong cooperation between rights holders and enforcement officials. The government has also taken some initial steps to address Internet piracy concerns. The United States will continue to monitor Poland's progress to ensure that IPR protection and enforcement improvements are ongoing.
Results from the 2009 OCRs:
* Fiji – Fiji made progress on IPR enforcement during the 2009 OCR period and will not be placed on a list in the 2010 Special 301 Report. The United States encourages Fiji to continue its efforts to ensure that IPR are properly protected and enforced in the country, and will continue to monitor Fiji's progress.
* Israel – The United States has recently concluded an understanding with Israel to address several longstanding issues with its IPR regime for pharmaceutical products. The understanding more closely aligns key aspects of Israel's IPR system for pharmaceutical products with the levels of protection afforded by other countries at Israel's advanced stage of development. The United States will continue to work with Israel through the implementation of this understanding and to address other outstanding concerns in IPR protection and enforcement.
* Saudi Arabia – Saudi Arabia significantly improved its IPR protection and enforcement regime and as a result was removed from the Watch List in February 2010, following the conclusion of an OCR. Enforcement, prosecutions, and transparency issues were successfully addressed in the past year, and the United States will continue to engage with Saudi Arabia to address remaining issues.
Other positive developments:
* Sweden – The government of Sweden has implemented several measures to improve its IPR regime within the past year. As a result of such efforts, many of the Bit Torrent tracker websites and DC-hubs (types of peer-to-peer protocols that allow users to either download files from websites containing links, or from a central hub with infringing material) that previously operated out of Sweden have now moved elsewhere. In their place, legal alternatives, such as Spotify, Film2Home, and Voddler have generated growing interest. Sweden's implementation of the EU's Enforcement Directive has increased public awareness of IPR protection.
* EU – In 2009 the European Union (EU) ratified the World Intellectual Property Organization (WIPO) Copyright Treaty (WCT) and the Performances and Phonograms Treaty (WPPT) (collectively, the "WIPO Internet Treaties"). This marked a significant ​step forward for international norms of IPR protection, particularly with regard to Internet-based delivery of copyrighted works. With the EU's ratification of the WIPO Internet Treaties, there are now 88 members of the WCT and 86 members of the WPPT. These treaties have raised the standard of IPR protection around the world, particularly with regard to Internet-based delivery of copyrighted works.
The United States commends this positive progress by our trading partners. The United States will continue to work with these and other countries to achieve further improvements in IPR protection and enforcement during the coming year.
Initiatives to Strengthen IPR Internationally
The United States has worked to promote adequate and effective protection and enforcement of IPR through a variety of mechanisms, including the following initiatives:
* World Trade Organization (WTO): The multilateral structure of WTO agreements provides opportunities for USTR to lead engagement with trading partners on IPR issues in several contexts, including accession processes for prospective members; the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council); and WTO dispute settlement.
* Bilateral and Regional Initiatives: The United States worked with many countries to strengthen IPR protection and enforcement through the provisions of bilateral and regional agreements, including free trade agreements (FTAs). In addition, Trade and Investment Framework Agreements (TIFAs) between the United States and several countries, including many in the Middle East and Asia, have facilitated discussions on enhancing IPR protection and enforcement.
* Anti-Counterfeiting Trade Agreement (ACTA): The goal of the ACTA initiative is to work with trading partners in favor of strong IPR enforcement to achieve an agreement that raises the international standard for the enforcement of IPR. On April 21, 2010, the ACTA participants released the current draft of the ACTA text, following the 8th round of the ACTA negotiations in Wellington, New Zealand. USTR has made the draft text available to the public at www.ustr.gov/acta.
* Trade Preference Program Reviews: USTR reviews IPR practices in connection with the implementation of trade preference programs such as the Generalized System of Preferences (GSP), and regional programs such as the Caribbean Basin Economic Recovery Act (CBERA). USTR will continue to review IPR practices in Russia, Lebanon, and Uzbekistan under ongoing GSP reviews.
* Expanded International Cooperation: USTR, in coordination with other agencies, looks forward to continuing engagement with trading partners in bilateral, regional, and ​multilateral fora to improve the global IPR environment. In addition to the work listed above, we anticipate engaging with our trading partners in initiatives such as the U.S.-EU Summit, our trilateral cooperation with Canada and Mexico, the Asia Pacific Economic Cooperation (APEC) forum, the Organization for Economic Cooperation and Development (OECD), and other multilateral and regional fora.
Capacity Building Efforts
In addition to identifying concerns, this Report also highlights opportunities for the U.S. Government to work collaboratively with trading partners to address those concerns. The U.S. Government collaborates on training and IPR-related capacity building with various partner countries around the world. Both in Washington D.C. and abroad, through bilateral collaborations and in regional groupings, the U.S. Government remains engaged in building stronger, more streamlined and more effective systems for the promotion, and protection and enforcement of IPR.
For example, in the United States, the U.S. Patent and Trademark Office (USPTO) invites training participants from around the world to its Global Intellectual Property Academy, which has over 75 training programs a year, focusing on a variety of topics from patent and trademark examination to IP management to technology transfer. Other U.S. Government agencies bring foreign government and private-sector representatives to the United States on study tours to meet with IPR professionals and visit the institutions and businesses responsible for developing, protecting and promoting IPR in the United States. One such program is the State Department's International Visitors Leadership Program, which brings groups from around the world each year to cities across the U.S. to learn more about IPR and related trade and business issues. Other U.S. Government agencies hold well-attended conferences in Washington, such as the international program conducted by the U.S. Copyright Office, cosponsored by WIPO, which in March 2010 hosted developing countries and countries in transition for training on emerging issues in copyright and related rights and issues pertaining to blind and visually impaired persons.
Overseas, the U.S. Government is also active in partnering to provide training, technical assistance, capacity building, exchange of best practices, and other collaborative activities to improve IPR protection. These activities are conducted by a number of different agencies. For example:
* The USPTO's Office of External Affairs provides capacity building in countries around the world and has developed agreements with regional and international IP organizations, such as the African Regional Intellectual Property Organization (ARIPO) and Interpol, to partner on IPR training activities.
* The U.S. Department of State provides training funds each year to U.S. Government agencies that provide IPR enforcement training and technical assistance to foreign governments. The agencies which provide such training include the U.S. Department of Justice (DOJ), the USPTO, and the Department of Homeland Security's (DHS) bureau of Customs and Border Protection (CBP) and bureau of Immigrations and Customs Enforcement (ICE). In 2009, State Department funds supported 18 training events for over 1,500 Customs, police, and judicial officials from more than 21 developing countries, including Ukraine, Mexico, Russia, Vietnam, and Nigeria. The U.S. Government works collaboratively on many of these training programs with the private sector and with various international entities such as WIPO and regional organizations, like the APEC Intellectual Property Experts Group (IPEG).
* The Department of Commerce's Commercial Law Development Program (CLDP) provides training to foreign lawmakers, regulators, judges, and educators seeking to improve the legal environment for doing business in their countries, including on IPR. CLDP currently works with more than 35 countries and has conducted cooperative programs in Central and Eastern Europe, the former Soviet Union, the Middle East, North Africa, Sub-Saharan Africa and Asia. For example, in April 2009, CLDP organized the Second National Workshop on Intellectual Property and Technology Commercialization in Manila, Philippines, jointly with the Philippines Intellectual Property Research and Training Institute (IPRTI).
These programs are often coordinated across many U.S. Government agencies.
Although many trading partners have implemented IPR legislation, the lack of criminal prosecutions and deterrent sentencing has left effective IPR enforcement to languish in many regions. Lack of knowledge regarding IPR law and policy on the part of judges and enforcement officials, and a lack of enforcement resources, are repeatedly cited as primary reasons for this growing concern. The United States welcomes steps by a number of trading partners to educate their judiciary and enforcement officials on IPR matters. The United States will continue to work collaboratively with trading partners to address these issues.
Trends in Counterfeiting and Piracy
Counterfeiting has evolved in recent years from a localized industry concentrated on copying high-end designer goods to a sophisticated global business involving the mass production and sale of a vast array of fake goods, including items such as counterfeit medicines, health care products, food and beverages, automobile and airplane parts, toothpaste, shampoos, razors, electronics, batteries, chemicals, and sporting goods.
​Counterfeiting and piracy affects the profits of legitimate producers and impacts consumers whose lives and safety are at risk when they purchase fake goods. It also damages the economies of the countries in which it occurs by decreasing tax revenue and deterring investment. Counterfeiters and pirates generally pay no taxes or duties, and they often disregard basic standards for worker health and safety and product quality and performance. Industry reports trends in counterfeiting and piracy that include:
* A greater diversity in the types of goods that are being counterfeited, as well as the production of labels and components for these fake products. Exploiting free trade zones (FTZs), counterfeiters are establishing a global trade in counterfeit items, shipping them separately to FTZs to be assembled and distributed in another country. FTZs are also often used to disguise the origin of counterfeit goods.
* A rapid growth in the piracy of copyrighted products in virtually all formats, as well as counterfeiting of trademarked goods, because these criminal enterprises offer enormous profits and little risk. Counterfeiters and pirates require little up-front capital investment and even if caught and charged with a crime, the penalties imposed in many countries are so low that they offer little or no deterrence against further infringements.
* A growth in the online sale of physical pirated and counterfeit products that is rapid and that is matching the volumes associated with street vendors and physical markets. Legal and investigative institutions face difficulties in responding to this trend. Online advertisements for sale of illegitimate physical goods that are delivered through the mail or by hand are found in many countries including China, Romania, and Ukraine. For example, in China, although the largest Internet-based sales portals have responded to rights holders' complaints of counterfeit and pirated product listings, more than 75 percent of illicit sellers have reportedly re-listed the infringing goods.
* Another notable trend involves shipping counterfeit products separately from labels and packaging to evade enforcement efforts. For example, infringers in Russia reportedly import unbranded products, package these products with unauthorized packaging materials bearing the rights holders' trademarks, and subsequently export the products to various countries. Infringers in countries such as Paraguay reportedly facilitate these illegal activities by exporting label and packaging components to these counterfeit and pirated product assemblers.
Stronger and more effective criminal and border enforcement is required to stop the manufacture, import, export, transit, and distribution of pirated and counterfeit goods. Through bilateral consultations, FTAs, and international organizations, USTR is working to ensure that penalties have deterrent effects, and that penalties include significant monetary fines and meaningful sentences of imprisonment. Additionally, important elements of a deterrent enforcement system ​include requirements that pirated and counterfeit goods – as well as materials and implements used for their production – are seized and destroyed.
The manufacture and distribution of pharmaceutical products bearing counterfeit trademarks is a growing problem that has important consequences for consumer health and safety. Such trademark counterfeiting is one dimension of the larger problem of substandard medicines. The United States notes its particular concern with the proliferation of the manufacture, sale, and distribution of counterfeit pharmaceuticals in countries such as Brazil, China, India, Indonesia, and Russia.
In many cases, bulk active pharmaceutical ingredients (API) that are used to manufacture pharmaceuticals that bear counterfeit trademarks are not made according to good manufacturing practices. Hence, these products may contain sub-standard and potentially hazardous materials. For instance, in China, domestic chemical manufacturers that produce APIs can avoid regulatory oversight by not declaring that the bulk chemical is intended for use in pharmaceutical products. This contributes to China being a major source country for APIs used in counterfeit pharmaceutical products. Although China has taken some welcome steps, such as requiring manufacturers to register with the State Food and Drug Administration, more effective regulatory controls are needed to assist China and its trading partners in their efforts to address this problem.
Internet and Digital Piracy
While the increased availability of broadband Internet connections around the world is generating many benefits, from increased economic activity and new on-line business models to greater access to and exchange of information, this phenomenon has also made the Internet an extremely efficient vehicle for disseminating copyright-infringing products.
Internet piracy is a significant concern with respect to a number of trading partners, including Brazil, Canada, China, India, Italy, Russia, Spain and Ukraine. Unauthorized retransmission of live sports telecasts over the Internet continues to be a growing concern in many countries, particularly China, and "linking sites," many reportedly based in the Netherlands, are exacerbating the problem. In addition, piracy using new technologies is an emerging problem internationally. U.S. copyright industries also report growing problems with piracy using cellular telephones, palm devices, flash drives, and other mobile technologies. In some countries, these devices are being pre-loaded with illegal content before they are sold. In addition to piracy of music and films using these new technologies, piracy of ring tones, games, and scanned books also occurs. The United States will work with our trading partners to combat these growing problems. The United States urges governments to ratify and implement the WIPO Internet Treaties, which provide tools necessary for protecting copyrighted works in the digital environment.
​Although Internet piracy is rapidly supplanting physical piracy in many markets around the world, the production of and trade in pirated optical discs remain major problems in many regions. In recent years, some countries, such as Malaysia, the Philippines, and Romania, have made progress toward implementing controls on optical media production. Other countries still need to adopt and implement legislation or improve existing measures to combat illegal optical disc production and distribution, including China, India, Paraguay, and Thailand, which have not made sufficient progress in this area. The United States continues to urge its trading partners who face challenges of illegal optical media production to pass effective legislation to counter this problem, and to enforce existing laws and regulations aggressively.
Trademarks and Domain Name Disputes
A growing area of concern for trademark holders is the protection of their trademarks against unauthorized uses under country code top level domain name (ccTLD) extensions. U.S. rights holders risk losing valuable Internet traffic because of such uses. A related and growing concern is ccTLDs lacking transparent and predictable uniform domain name dispute resolution policies (UDRPs). Effective UDRPs should assist in quickly and efficiently resolving these disputes.
The United States encourages our trading partners to provide procedures that allow for the protection of trademarks used in domain names, and to ensure that dispute resolution procedures are available to effectively enforce against misuse of trademarks.
Government Use of Software
Under Executive Order 13103 issued in September 1998, United States Government agencies maintain procedures to ensure that they use authorized business software. Pursuant to the same directive, USTR has undertaken an initiative to work with other governments, particularly in countries that are modernizing their software asset management systems or where concerns have been raised, to stop governmental use of illegal software. Considerable progress has been made under this initiative, leading to numerous countries and territories mandating that only authorized, legitimate software may be used by government ministries. Further work on this issue remains with certain trading partners, such as China, Costa Rica, India, Pakistan, Paraguay, Peru, and Ukraine. The United States looks forward to these governments' adoption of effective and transparent procedures to ensure legitimate governmental use of software.
Intellectual Property and Health Policy
Numerous comments in the 2010 Special 301 review highlighted important concerns arising at the intersection of IPR policy and health policy. The 2001 WTO Doha Declaration on the TRIPS Agreement and Public Health (Doha Declaration on TRIPS and Public Health) recognized the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria, and other ​epidemics. As affirmed in the Doha Declaration on TRIPS and Public Health, the United States respects a country's right to protect public health and, in particular, to promote access to medicines for all, and supports the vital role of the patent system in promoting the development and creation of new and innovative lifesaving medicines. The assessments set forth in this Report are based on various critical factors, including, where relevant, the Doha Declaration on TRIPS and Public Health.
Consistent with these views, the United States respects our trading partners' rights to grant compulsory licenses, in a manner consistent with the provisions of the TRIPS Agreement, and encourages our trading partners to consider ways to address their public health challenges while maintaining intellectual property systems that promote investment, research, and innovation.
The United States is firmly of the view that international obligations such as those in the TRIPS Agreement have sufficient flexibility to allow countries to address the serious public health problems that they may face. We strongly support the WTO TRIPS/health solution concluded in August 2003, in which members are permitted, in accordance with specified procedures, to issue compulsory licenses to export pharmaceutical products to countries that cannot produce drugs for themselves. The General Council adopted a Decision in December 2005 that incorporated this solution into an amendment to the TRIPS Agreement, and later that month the United States became the first WTO member to formally accept this amendment. The United States hopes to see at least two-thirds of the WTO membership accept this amendment by the December 31, 2011 deadline, at which point the amendment will go into effect for those members that accept it. The August 2003 waiver will remain in place and available until the amendment takes effect.
The United States will work to ensure that the provisions of our bilateral and regional trade agreements are consistent with these views and do not impede the taking of measures necessary to protect public health. Accordingly, USTR will continue its close cooperation with the Department of Health and Human Services to ensure that public health challenges are addressed and the patent system is supported as a mechanism to promote research and innovation.
Supporting Pharmaceutical and Medical Device Innovation through Improved Market Access
USTR has sought to reduce market access barriers faced by U.S. pharmaceutical and medical device companies in many countries, and to facilitate both affordable health care today and the innovation that assures improved health care tomorrow. For example, this year's Special 301 Report highlights concerns regarding market access barriers affecting pharmaceutical products in Algeria and Indonesia.
Even where a country's IPR regime demonstrates a commitment to strong IPR protection, other types of measures have the potential to affect market access in the pharmaceutical and medical device sector. For example, government practices including unreasonable regulatory approval ​delays and potentially unfair reimbursement policies can discourage the development of new drugs and other medical products. The criteria, rationale, and operation of such measures are often nontransparent or not fully disclosed to patients or to pharmaceutical and medical device companies seeking to market their products. USTR encourages trading partners to provide appropriate mechanisms for transparency and opportunities for public engagement in the context of their relevant health care systems.
U.S. industry has expressed concerns regarding the policies of several industrialized trading partners, including Finland, France, Italy, Japan, Korea, New Zealand, Poland, and Taiwan, on issues related to innovation in the pharmaceutical sector and other aspects of health care goods and services. For example:
* With respect to Japan, pharmaceutical and medical device issues are an integral part of bilateral discussions. While Japan has made progress on these issues, the United States continues to press for improved transparency, which would facilitate the introduction of innovative pharmaceuticals and medical devices into Japan's market. Ways to improve transparency include ensuring meaningful opportunities for interested stakeholders to provide input into important regulatory, reimbursement, and pricing matters.
* With regard to Poland, the United States remains concerned about Poland's enactment in 2006 of a regulation that appears to reduce the official maximum wholesale and retail prices for imported drugs by 13 percent, while generally leaving the prices for drugs of Polish origin unchanged. The U.S. pharmaceutical industry reports that this regulation has had a significant impact by reducing prices for numerous products manufactured outside Poland. The United States is concerned that this regulation created an impediment to market access for this industry and will continue to monitor the situation in Poland throughout the coming year.
The United States is seeking to establish or continue dialogues with Organization for Economic Cooperation and Development (OECD) members and other developed economies to address these and other sectoral concerns, and encourage a common understanding on questions related to innovation in the pharmaceutical and medical device sectors. For example, the United States-Korea Free Trade Agreement, once in force, would improve access to innovative medical products and ensure the transparent, predictable, and non-discriminatory pricing and reimbursement of innovative and generic pharmaceutical products, and medical devices. Separately, the United States is also continuing its engagement with China to promote fair and transparent policies in this sector.
The United States shares policy goals and concerns related to health care with other countries, including challenges surrounding aging populations and rising health care costs. The United ​States also shares the objective of continued improvement in the health and quality of life of its citizens, and the objective of delivering care in the most efficient and responsive way possible. The United States looks forward to engaging with these trading partners to address specific concerns related to reimbursements, regulatory policies, and transparency.
Implementation of the WTO TRIPS Agreement
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) requires all WTO members to provide certain minimum standards of IPR protection and enforcement, and was one of the most significant achievements of the Uruguay Round. The TRIPS Agreement is the first broadly-subscribed multilateral IPR agreement that is subject to mandatory dispute settlement provisions.
Developed country members were required to implement TRIPS fully as of January 1, 1996. Developing countries were given a transition period for many obligations until January 1, 2000, and in some cases, until January 1, 2005. Nevertheless, certain members are still in the process of finalizing implementing legislation, and many are still engaged in establishing adequate and effective IPR enforcement mechanisms.
Recognizing the particular challenges faced by least-developed countries (LDCs), in 2005 the United States worked closely with them and other WTO members to extend the implementation date for these countries from January 2006 to July 2013. The LDC members in turn pledged to preserve the progress that some have already made toward TRIPS implementation. Additionally, the LDC members have until 2016 to implement their TRIPS obligations for patent and data protection for pharmaceutical products, as proposed by the United States at the Doha Ministerial conference of the WTO. The United States looks forward to the successful completion of this transition.
The United States will continue to work with WTO members and expects further progress in the near term towards completing their TRIPS implementation process. However, in those instances in which additional progress is not achieved, the United States will consider alternative means of encouraging implementation, including the possibility of recourse to dispute settlement consultations.
The United States participates actively in the WTO TRIPS Council's scheduled reviews of WTO members' implementation of the TRIPS Agreement and also uses the WTO's Trade Policy Review mechanism to pose questions and seek constructive engagement on issues related to TRIPS implementation. Furthermore, the United States continues to work with other WTO members, including the European Union (EU), Japan, and Switzerland, to encourage a discussion within the WTO TRIPS Council on implementation of the enforcement-related provisions of the TRIPS Agreement. The United States hopes that the TRIPS Council can generate a useful ​sharing of experiences related to IPR enforcement to ensure effective implementation of enforcement obligations.
WTO Dispute Settlement
The United States will continue pursuing the resolution of WTO-related disputes announced in previous Special 301 reviews and determinations. The most efficient and therefore preferred manner of resolving our concerns is through bilateral dialogue. Where these efforts are unsuccessful, the United States will not hesitate to use the dispute settlement procedures, as appropriate.
In April 2007, the United States requested WTO dispute settlement consultations with China over deficiencies in China's legal regime for protecting and enforcing copyrights and trademarks on a wide range of products. After those consultations failed to resolve the matter, the United States requested the establishment of a WTO panel. A WTO panel was established to examine this matter on September 25, 2007. On March 20, 2009, the WTO Dispute Settlement Body ("DSB") adopted a panel report ruling in favor of the United States that found (1) China's denial of copyright protection to works that do not meet China's content review standards is impermissible under the TRIPS Agreement; and (2) China's Customs rules cannot allow seized counterfeit goods to be publicly auctioned after only removing the infringing mark. With respect to the third claim concerning China's thresholds for criminal prosecution and conviction of counterfeiting and piracy, while the United States prevailed on the interpretation of the important legal standards in Article 61 of the TRIPS Agreement, including the finding that criminal enforcement measures must reflect and respond to the realities of the commercial marketplace, the panel found that it needed additional evidence before it could uphold the overall U.S. claim that China's criminal thresholds are too high. On April 15, 2009, China notified the DSB that China intended to implement the recommendations and rulings of the DSB in this dispute, and stated it would need a reasonable period of time for implementation. On June 29, 2009, the United States and China notified the DSB that they had agreed on a one-year period of time for implementation, to end on March 20, 2010. The United States is working with China on its implementation of the DSB recommendations and rulings in this dispute.
In addition, the United States requested WTO dispute settlement consultations with China concerning certain other Chinese measures affecting distribution and market access for publications, movies, and music. These measures appear to be inconsistent with various WTO obligations of China. The U.S. claims challenged China's prohibition on foreign companies importing all of the products, China's prohibitions and discriminatory requirements imposed on foreign distributors of publications, music, and videos within China, and China's imposition of more burdensome requirements on the distribution of imported publications, movies, and music vis-à-vis their domestic counterparts. As the United States and China were unable to resolve this dispute in these consultations, the United States filed a request for the establishment of a WTO panel. A WTO panel was established to examine this matter on November 27, 2007. On August ​12, 2009, the panel rules in favor of the United States on the vast majority of its claims. Significantly, the panel also found that China's restriction on the right of foreign enterprises to import the products at issue was not justified by the exception in the GATT 1994 related to the protection of public morals, as China had argued. China subsequently appealed certain of the panel's findings. However, on December 21, 2009, the WTO Appellate Body rejected each of China's claims on appeal and sustained the panel's findings in those respects. On January 19, 2010, the DSB adopted the panel and Appellate Body reports. On February 18, 2010, China notified the DSB that China intends to implement the recommendations and rulings of the DSB in this dispute, and stated it would need a reasonable period of time for implementation.
Following the 1999 Special 301 review, the United States initiated dispute settlement consultations concerning the European Union's (EU) regulation on food-related geographical indications (GIs), which appeared to discriminate against foreign products and persons – notably by requiring that EU trading partners adopt an "EU-style" system of GI protection – and appeared to provide insufficient protections to trademark owners. On April 20, 2005, the DSB adopted a panel report ruling in favor of the United States that the EU GI regulation is inconsistent with the EU's obligations under the TRIPS Agreement and the General Agreement on Tariffs and Trade 1994. On March 31, 2006, the EU published a revised GI Regulation that is intended to comply with the DSB recommendations and rulings. There remain some concerns, however, with respect to this revised GI Regulation, which the United States has asked the EU to address, and the United States intends to continue monitoring this situation.