[Federal Register Volume 69, Number 239 (Tuesday, December 14, 2004)]
[Notices]
[Pages 74561-74563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27373]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE


Identification of Countries Under Section 182 of the Trade Act of 
1974: Request for Public Comment on Out-of-Cycle Review of the People's 
Republic of China

AGENCY: Office of the United States Trade Representative.

ACTION: Request for written submissions from the public.

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SUMMARY: Section 182 of the Trade Act of 1974 (Trade Act) (19 U.S.C. 
2242), requires the United States Trade Representative (USTR) to 
identify countries that deny adequate and effective protection of 
intellectual property rights (IPRs) or deny fair and equitable market 
access to U.S. persons who rely on intellectual property protection. In 
addition, USTR is required to determine which of those countries should 
be identified as Priority Foreign Countries. Section 182 is commonly 
referred to as the ``Special 301'' provision of the Trade Act.
    The People's Republic of China (China) was designated a Priority 
Foreign Country in 1994, and has subsequently remained subject to 
monitoring under Section 306 of the Trade Act (19 U.S.C. 2416). On May 
3, 2004, USTR announced the results of the 2004 Special 301 review and 
stated that an Out-of-Cycle Review (OCR) would be conducted in early 
2005 to assess China's actions to implement effectively the commitments 
it undertook under the Joint Commission on Commerce and Trade (JCCT), 
its WTO commitments, and a 1995 bilateral intellectual property 
agreement with the United States (including additional commitments made 
in 1996). USTR will examine whether China's actions are producing 
substantial progress toward a significant reduction in IPR infringement 
levels in China. USTR requests written comments from the public 
concerning the acts, policies, and practices relevant for this review 
under Section 182 of the Trade Act.

DATES: Submissions must be received on or before 5 p.m. on Monday, 
January 31, 2005.

ADDRESSES: Comments should be addressed to Sybia Harrison, Special 
Assistant to the Section 301 Committee, and sent (i) electronically, to 
<a href="/cdn-cgi/l/email-protection#cc8a9efcf8f8fa8cb9bfb8bee2a9a3bce2aba3ba"><span class="__cf_email__" data-cfemail="6325315357575523161017114d060c134d040c15">[email protected]</span></a>, with ``Special 301 Out-of-Cycle Review'' in the 
subject line, or (ii) by fax, to (202) 395-9458, with a confirmation 
copy sent electronically to the e-mail address above.

FOR FURTHER INFORMATION CONTACT: Victoria Espinel, Deputy Assistant 
U.S. Trade Representative for Intellectual Property, at (202) 395-6864, 
Angela Davis, Director of China Affairs, at (202) 395-3900, or Stanford 
McCoy, Assistant General Counsel, at (202) 395-3581, Office of the 
United States Trade Representative.

SUPPLEMENTARY INFORMATION: Pursuant to Section 182 of the Trade Act, 
USTR must identify those countries that deny adequate and effective 
protection for intellectual property rights or deny fair and equitable 
market access to U.S. persons who rely on intellectual property 
protection. 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 relevant U.S. 
products may be identified as Priority Foreign Countries. Acts, 
policies, or practices that are the basis of a country's designation as 
a Priority Foreign Country are normally the subject of an investigation 
under the Section 301 provisions of the Trade Act. China was designated 
a Priority Foreign Country in 1994, and has subsequently remained

[[Page 74562]]

subject to monitoring under Section 306 of the Trade Act.
    Improving protection for intellectual property in China is a top 
priority for this Administration. To that end, during the April 2004 
meeting of the Joint Commission on Commerce and Trade (JCCT), China 
agreed to take certain specific steps toward China's goal of 
significantly reducing IPR infringement.\1\
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    \1\ http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2004/asset_upload_file225_5834.pdf.
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    On May 3, 2004, USTR announced the results of the 2004 Special 301 
review and stated that an OCR would be conducted in early 2005 to 
assess China's actions to implement effectively the commitments it 
undertook under the JCCT, its WTO commitments, and the 1995 bilateral 
intellectual property agreement with the United States (including 
additional commitments made in 1996). USTR will examine whether China's 
actions are producing substantial progress toward a significant 
reduction in IPR infringement levels in China. The direct input of U.S. 
IPR leaders and participants in China's market is critical to USTR's 
ability to thoroughly evaluate China's progress.
    Earlier this year, Ambassador Josette Sheeran Shiner, Deputy U.S. 
Trade Representative, sent an open letter to industry requesting data 
on the prevalence of IPR infringement in China and examples of specific 
individual cases where IPRs in China have or have not been respected. 
USTR reiterates this request as part of the formal OCR. Given the scale 
and nature of the information needed and the importance of this issue, 
receipt of data regarding both successes and failures from January 2002 
and onward is crucial to identifying short- and long-term progress in 
China, and any additional shortcomings in China's IPR regime. 
Submission of responses is entirely voluntary, and it is up to each 
respondent to decide how to respond. For example, industry groups may 
wish to provide data on prevalence of IPR infringement, while 
individual companies may wish to focus on specific individual cases of 
IPR infringement.
    The following information will be particularly useful for the OCR 
evaluation process:

--Detailed retail and consumer market surveys (for example, calculating 
on a monthly basis the rates of pirated or counterfeit product 
available through various retail channels in major cities across 
China);
--Detailed reports on major centers around China dealing in or 
producing infringing product and the success or failure of Chinese 
authorities in eliminating those centers;
--Detailed reports on particular geographic areas or sectors where 
China's enforcement of IPRs is notable for either its weakness or its 
strength;
--industry data on exports of infringing products from China to the 
United States and other international markets;
--information on sources and supporters of the production of infringing 
products (e.g., whether infringing production is individual, corporate, 
state-supported, supported by organized crime or official corruption, 
etc., and whether such support is local, provincial, regional or 
national in scope);
--trade estimates showing any effect on trade of IPR infringing goods;
--statistical data, if appropriate, aggregated from the experiences of 
members of right holder organizations, on the actions undertaken and 
results produced by China's authorities responsible for enforcement of 
specific IPRs of concern to industry, including data based on right 
holder experience with

    [dec222] type and amount of penalties (e.g., fines, license 
suspensions, imprisonments) and seizures of infringing goods and 
implements used to make them;
    [dec222] frequency and type of all relevant forms of enforcement 
action, such as initiation of administrative action, raids, referrals 
for criminal prosecution, imposition of penalties, and other relevant 
enforcement actions; and
    [dec222] data on deterrence or lack thereof, e.g., recidivism; and

--dossiers prepared by individual right holders on significant 
enforcement cases, preferably in the format specified by the template 
available on the USTR Web site (referenced below), together with other 
information that right holders consider to be relevant.
    In addition to this factual information, USTR encourages 
respondents to provide a detailed evaluation of specific strengths and 
weaknesses of China's legal regimes for enforcement of IPRs in light of 
relevant international standards and U.S.-China bilateral commitments. 
In particular, we seek comments on implementation of China's JCCT 
commitment to issue new judicial interpretations by the end of 2004 
that will (a) lower the value thresholds that trigger criminal 
investigation and the application of criminal penalties for IPR 
violations; and (b) facilitate the application of criminal sanctions to 
on-line piracy and to the import, export, distribution, storage and 
sale of counterfeit and pirated goods by clarifying the standards for 
such application.
    Any submitted information that respondents wish to remain 
confidential should be certified and marked as indicated in this 
notice.
    Requirements for Comments: Comments should include a description of 
the problems experienced and the effect of the acts, policies, and 
practices on U.S. industry. Comments should be as detailed as possible 
and should provide all necessary information for assessing the effect 
of the acts, policies, and practices. Any comments that include 
quantitative loss claims should be accompanied by the methodology used 
in calculating such estimated losses. A template available on the USTR 
Web site provides optional guidance for submission of information on 
specific cases.\2\ Respondents using the template may depart from the 
template as necessary and are encouraged to provide supplementary 
information.
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    \2\ http://www.ustr.gov/assets/Trade_Sectors/Intellectual_Property/2005_China_Out_of_Cycle_Review/asset_upload_file942_6340.doc.
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    Comments must be in English. No submissions will be accepted via 
postal service mail. Documents should be submitted as either 
WordPerfect, MS Word, or text (.TXT) files. Supporting documentation 
submitted as spreadsheets is acceptable as Quattro Pro or Excel files. 
A submitter requesting that information contained in a comment be 
treated as confidential business information must certify that such 
information is business confidential and would not customarily be 
released to the public by the submitter. A non-confidential version of 
the comment must also be provided. For any document containing business 
confidential information, the file name of the business confidential 
version should begin with the characters ``BC-'', and the file name of 
the public version should begin with the character ``P-''. The ``P-'' 
or ``BC-'' should be followed by the name of the submitter. Submissions 
should not include separate cover letters; information that might 
appear in a cover letter should be included in the submission itself. 
To the extent possible, any attachments to the submission should be 
included in the same file as the submission itself, and not as separate 
files.
    All comments should be addressed to Sybia Harrison, Special 
Assistant to the Section 301 Committee, and sent (i) electronically, to 
<a href="/cdn-cgi/l/email-protection#f7b1a5c7c3c3c1b782848385d9929887d9909881"><span class="__cf_email__" data-cfemail="98decaa8acacaed8edebeceab6fdf7e8b6fff7ee">[email protected]</span></a>,

[[Page 74563]]

with ``Special 301 Out-of-Cycle Review'' in the subject line, or (ii) 
by fax, to (202) 395-9458, with a confirmation copy sent electronically 
to the e-mail address above.
    Public Inspection of Submissions: Within one business day of 
receipt, non-confidential submissions will be placed in a public file 
open for inspection at the USTR reading room, Office of the United 
States Trade Representative, Annex Building, 1724 F Street, NW., Room 
1, Washington, DC. An appointment to review the file must be scheduled 
at least 48 hours in advance and may be made by calling Jacqueline 
Caldwell at (202) 395-6186. The USTR reading room is open to the public 
from 10 a.m. to noon and from 1 p.m. to 4 p.m., Monday through Friday.

James Mendenhall,
Assistant U.S. Trade Representative for Services, Investment, and 
Intellectual Property.
[FR Doc. 04-27373 Filed 12-13-04; 8:45 am]
BILLING CODE 3190-W5-P


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