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2018 SPECIAL 301 REP
ORT ONCOPYRIGHT PROTECTION
ANDENFORCEMENT
SUBMITTED FEBRUARY 8, 2018
TO THE
UNITED STATES TRADE REPRESENTATIVE
BY THE
INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE
© 2018 International Intellectual Prop
erty Alliance Material in this report is protected by copyright. it may, however, be reproduced for non -commercial purposes or quoted with appropriate attribution to the International Intellectual Property Alliance.International Intellectual Property Alliance
is a registered service mark of International Intellectual Property Alliance. IIPA is a registered servicemark of the International Intellectual Property Alliance. The logo (three circles with a "c" in the center and the globe design) is a service mark of the
International Intellectual Property Alliance.
© 2018 International Intellectual Property Alliance (IIPA) 2018 Special 301: Table of ContentsIssued February 8, 2018
Page 1 www.iipa.org
TABLE OF CONTENTS INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE 2018SPECIAL 301 REPORT ON COPYRIGHT PROTECTION AND ENFORCEMENT SUBMISSION: Letter to Ms. Elizabeth Kendall, Acting Assistant United States Trade Representative
for Innovation and Intellectual Property, Office of the United States TradeRepresentative
APPENDIX A: Country Surveys
Priority Watch List
Argentina .......................................................................................................................................... 1
Chile ................................................................................................................................................. 6
China ............................................................................................................................................. 12
India ................................................................................................................................................ 28
Mexico ................................
39Russian Federation ....................................................................................................................... 51
Taiwan ............................................................................................................................................ 63
Ukraine ........................................................................................................................................... 71
Vietnam .......................................................................................................................................... 82
Watch List
Brazil .............................................................................................................................................. 94
Canada ......................................................................................................................................... 107
Colombia ................................................................................................
120Ecuador ........................................................................................................................................ 125
Indonesia ...................................................................................................................................... 129
Peru .............................................................................................................................................. 140
South Africa ................................
146Switzerland ................................................................................................................................... 155
Thailand ........................................................................................................................................ 163
United Arab Emirates.................................................................................................................... 174
International Intellectual Property Alliance (IIPA) 2018 Special 301: Table of ContentsPage 2
Annex - Short Country Summaries ....................................................................................................... A-1
Barbados ....................................................................................................................................... A-2
Costa Rica ..................................................................................................................................... A-3
Egypt ............................................................................................................................................. A-4
Guatemala ..................................................................................................................................... A-5
Jamaica ......................................................................................................................................... A-6
Turkey ........................................................................................................................................... A-7
Venezuela...................................................................................................................................... A-9
APPENDIX B: History of Countries' Special 301 Placement (1989-2017) and IIPA's 2018 Special 301Recommendations
1818 N STREET, NW, 8
TH FLOORWASHINGTON, DC 20036
TEL (202) 355-7900 · FAX (202) 355-7899
WWW.IIPA.ORG · EMAIL: INFO@IIPA.ORG
9770260.1/40488-00001
February 8, 2018
Submitted via regulations.gov Docket No. USTR-2017-0024Ms. Elizabeth Kendall
Acting Assistant United States Trade
Representative
for Innovation and Intellectual PropertyOffice of the United States Trade Representative
600 17th Street, N.W.
Washington, D.C. 20508
Re: IIPA Written Submission Regarding 2018 Special 301 Review: Identification of Countries Under Section 182 of the Trade Act of 1974: Request for Comment and Notice of PublicHearing, 82 Fed. Reg. 61363 (Dec. 27, 2017)
Dear Ms. Kendall:
This submission by the International Intellectual Property Alliance (IIPA) is made in response to the above-
captioned Federal Register Notice, which requested public comments regarding intellectual property protection and
market access barriers in U.S. trading-partner countries, as part of the "Special 301" review. 1IIPA has filed comments in the Special 301 reviews for three decades since the 1988 Trade Act created this
process. In that time, the technologies available for the production and distribution of copyrighted materials have
changed dramatically, and with them, the diversity of methods through which the cop yright industries disseminatetheir creative output - including literary works, music, movies and TV programming, video games and software - to
consumers. As evidenced by the growth of revenues, the copyright industries have embraced all means of digital
technologies to produce and distribute their works and recordings, including launching new businesses, services, and
apps to meet consumer demand. More legitimate copyrighted material is now available to consumers, and in more
diversified ways and with more flexible pricing than at any time in history.2This consumer appetite for copyrighted
materials does not stop at our borders. To meet worldwide demand, the copyright sector, more than any other in the
U.S. economy, has moved aggressively to digitally deliver its products and services across borders, inextricably linking "digital trade" with trade in copyright-protected material.3As a result, the U.S. copyright industries, as much as any industry, depend on strong rules and practices for
digital trade. The purpose of the Special 301 review process is to help the U.S. Government identify "foreign
countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market
access to U.S. persons who rely on intellectual property protection."4The ability of U.S. creators to reach foreign
markets through legitimate digital (and physical) channels is why the Special 301 review of countries - those denying
1IIPA will file under separate cover a Notice of Intent to Testify at the February 27, 2018 public hearing on Special 301.
2For example, there are now over 40 million tracks and hundreds of digital music services now available according a 2017 study: IFPI, Music Consumer Insight
Report 2017, available at http://www.ifpi.org/downloads/Music-Consumer -Insight-Report-2017.pdf. For more information on the proliferation of services, see, e.g.,https://www.mpaa.org/watch-it-legally/ (movies and TV content); http://www.whymusicmatters.com and http://www.pro-music.org/ (music); and
http://www.theesa.com/purchasing-legitimate-digital-copies-games/ (video games). 3A January 2018 Department of Commerce study, using the latest available year (2016) data, found that charges for the use of intellectual property, which
includes copyrighted content, accounted for $124.5 billion of a total of $403.5 billion of potentially
ICT (information and communications technology)-enabledservices exports, or 31%. It also found that charges for the use of intellectual property accounted for $80 billion out of a
total trade surplus of $159.5 billion ofpotentially ICT-enabled services, or over 50%. See, Department of Commerce "Digital Trade in North America" at 4, available at:
419 U.S.C. section 2242(a)(1).
IIPA 2018 Special 301 Letter to USTR, February 8, 2018, page iilegal protection or enforcement, or which are in engaged in activities blocking market access to American creators
and producers - is so critical at this time. The goal of the Special 301 review is, ultimately, to open markets for
American (and other) copyrighted materials in digital and hard copy formats. The goal of the review is not to catalog
trade barriers, nor to admonish foreign governments for deficient laws or enforcement regimes.For the copyright industries to flourish abroad, foreign markets need to: (i) have copyright laws that meet
high standards of protection; (ii) provide efficient copyright enforcement and sound legal structures to enable healthy
licensing of works and recordings; and (iii) eliminate market access barriers and unfair competitive practices. Markets
with these features also help our trading partners to develop, nurture, and enjoy the benefits of their own local
cultural and creative output, ultimately for the benefit of consumers. Unfortunately, as detailed in this filing, some
rights holders and copyright-dependent services confront deficient local laws, weak enforcement, and market access
barriers (or other discriminatory or unfair competitive practices). These shortcomings enable parties to engage in
piracy, some on a commercial scale, because it is a high-profit, low risk enterprise, unencumbered by the
considerable costs associated with either producing and licensing works, or protecting them against theft.
5This year, as in past IIPA filings, we provide public comments on the acts, practices and policies of our key
trading partners that present obstacles to achieving the goals of satisfying consumer demands for U.S. creative
materials in foreign marketplaces. This filing recounts, by country, the deficiencies of legal regimes and enforcement
practices, and recommends improvements. Dynamic market conditions and ever-changing technologies continue to
create enormous opportunities, with huge potential to further expand economic growth and creative activity in key
foreign markets. But that potential will only be reached if these protection and enforcement shortcomings, and
market access barriers, can be corrected. IIPA's recommendations include, where possible, emerging best practices
to address these issues and provide successful strategies applicable both to developed and developing country
markets. I. IIPA RECOMMENDATIONS ON DESIGNATIONS AND A SUMMARY OF COUNTRY REPORTS The focus of the 2018 IIPA submission is on markets where IIPA members believe active engagement bythe U.S. Government can reap positive results for creators and the industries that support and invest in them, either
by improving the legal regimes, the efficiency of enforcement, and/or lessening market barriers. The country reports
also contain short summaries of specific obligations taken by each country with the United States in bilateral or
multilateral trade agreements or in other fora, but which remain unfulfilled. Overcoming the challenges to the creative
industries identified in these reports will help to create more good-paying jobs, promote U.S. exports and foreign
sales, and contribute generally to healthy economic growth in the U.S. and abroad. IIPA members appreciate that USTR has made the Special 301 process a positive catalyst for change toaddress the challenges faced by the creative industries in key markets around the world. To highlight progress, we
include a section below on "positive developments" in particular countries, identifying specific instances of
improvement. IIPA members also appreciate USTR's efforts to maintain Special 301's focus on improving and
strengthening copyright protection and enforcement in the reported countries, which is clearly what the statute
requires and what Congress intended. IIPA's 2018 Submission includes this letter and two appendices.In Appendix A, IIPA provides detailed reports on 19 countries that it recommends for designation in the
USTR's Special 301 report this year.
6 5See, e.g., USTR, 2017 National Trade Estimate Report on Foreign Trade Barriers (March 2017), for the leading U.S. Government report on many market access
and other trade barriers around the world. The report is available at: 6Country reports and Annex entries were prepared by counsel to the IIPA, including, Kevin Rosenbaum, Dima Budron, Naomi Beckman-Straus, Steven Metalitz
and the undersigned, and are based on information furnished by IIPA's member associations. We thank Pamela Burchette for her
contribution in preparing, IIPA 2018 Special 301 Letter to USTR, February 8, 2018, page iiiIn addition,
Appendix A includes an Annex Report combining short summaries on seven countries:Barbados; Costa Rica; Egypt; Guatemala; Jamaica; Turkey; and Venezuela. Each of these seven countries were
identified in the USTR's 2017 Special 301 Report, and previous IIPA submissions have provided detailed analyses of
legal and enforcement regimes in these countries. Because IIPA members were aware of no new developments that
would lead us to revisit the present designations under Special 301, or IIPA's proposed designations, the Annex
focuses on one or two key issues in short blurbs on these countries. IIPA does not recommend any change in the
Special 301 status for these countries.
7 Appendix B provides an historical chart of Special 301 designations since 1989. 8 Regarding the 19 full country reports, the IIPA's recommendations are as follows:IIPA 2018 Special 301 Recommendations
Priority Watch List Watch List
Argentina
Chile China IndiaMexico
Russian Federation
Taiwan
Ukraine
Vietnam Brazil
Canada
Colombia
Ecuador
Indonesia
PeruSwitzerland
South Africa
Thailand
United Arab Emirates
9 10II. ABOUT IIPA AND IIPA'S INTEREST IN SPECIAL 301
IIPA is a private sector coalition, formed in 1984, of trade associations representing U.S. copyright-based
industries working to improve international protection and enforcement of copyrighted materials and to open foreign
markets closed by piracy and other market access barriers. Members of the IIPA include Association of American
Publishers (www.publishers.org), Entertainment Software Association (www.theesa.com ), Independent Film &Television Alliance (www.ifta-online.org), Motion Picture Association of America (www.mpaa.org), and Recording
Industry Association of America (www.riaa.com). Collectively, IIPA's five member associations represent over 3,200
U.S. companies producing and distributing materials protected by copyright laws throughout the world. These include
entertainment software (including interactive video games for consoles, handheld devices, personal computers and
the Internet) and educational software; motion pictures, television programming, DVDs and home video and digital
representations of audiovisual works; music recorded in all formats (from dig ital files to CDs and vinyl), for streamingand download services, or synchronization in audiovisual materials; and fiction and non-fiction books, education
instructional and assessment materials, and professional and scholarly journals, databases and software in all
formats. producing and distributing this submission, and Alesha Dominique, Albina Gasanbeko va, and Theresa Bowman for reviewing and editing the report. The country reports and Annex contain information which should not be construed as providing legal advice. 7Venezuela is currently on the USTR's
Priority Watch List
; all others are currently on the Watch List. 8A number of countries/territories have appeared on a Special 301 list each year since 1989, or for a considerable number of years. A 1994 amendment to
Section 182 of the Trade Act, dealing with identification of "priority foreign countries," provides that USTR must take into account "the history of intellectual
property laws and practices in the foreign country, whether the country has been identified as a priority foreign country pre
viously, and U.S. efforts to obtainadequate and effective intellectual property protection in that country." Uruguay Round Agreements Act Statement of Administrative Action, reprinted in H.R. Doc.
No. 103-316, vol. I, at 362 (1994). Under these criteria, these countries/territories are particularly vulnerable.
IIPA 2018 Special 301 Letter to USTR, February 8, 2018, page iv In December 2016, IIPA released the latest update of its comprehensive economic report, CopyrightIndustries in the U.S. Economy: The 2016 Report, prepared by Stephen E. Siwek of Economists Inc. According to the
report, the "core" copyright industries in the U.S. generated over $1.2 trillion of economic output in 2015, accountingfor 6.88% of the entire economy. The core copyright industries also employed over 5.5 million workers in 2015,
accounting for 3.87% of the entire U.S. workforce, and 4.57% of total private employment in the U.S. These are good
jobs: copyright industry workers earn on average38% higher wages
than other U.S. employees. The core copyrightindustries also outpaced the U.S. economy, growing at an aggregate annual rate of 4.81% between 2012 and 2015,
while the U.S. economy as a whole grew by 2.11%. When factoring in other industries that contribute to the copyright
economy (which together make up the "total" copyright industries), the numbers are even more compelling. Finally,
the report highlights the positive contribution of selected copyright sectors to the U.S. overall trade balance. Given
the importance of digital delivery to the copyright-based industries, this sector has the potential to multiply its export
revenues if our trading partners provide proper copyright-protective environments. In 2015, the copyright sectors
contributed $177 billion in foreign sales and exports, exceeding that of many other industry sectors, including
chemicals, aerospace products and parts, agricultural products, and pharmaceuticals and medicines. 9Studies such
as these amply demonstrate the contribution of creators, and the copyright-based industries that support them, to the
American economy. They also highlight what is at stake if those creators and industries have to face the additional
hurdles and costs associated with obstacles such as copyright piracy and discriminatory market barriers.
III. KEY CHALLENGES FOR THE COPYRIGHT INDUSTRIES - PROTECTION, ENFORCEMENT ANDMARKET ACCESS ISSUES
The U.S. copyright industries face complex challenges in overseas markets, but they can be organized into
three distinct but overlapping categories:Legal Reforms:
Copyright and related laws (e.g., civil and criminal codes, and procedural codes) mustmeet current and evolving global standards and commitments, in order to adequately and effectively address all
forms of piracy in a fast-changing technological environment.Enforcement:
These laws must be vigorously and effectively enforced. As a minimum standard, the WTOTRIPS Agreement requires "effective action" and "remedies that constitute a deterrent" to infringement, through civil,
administrative, and criminal channels, and effective adjudication in the courts. 10Enforcement tools must robustly
meet current infringement challenges, including those presented by pirate operations based online and/or outside the
jurisdiction, cybercrime syndicates, and organized criminal enterprises; and enforcement resources, training and
capacity building must be deployed at a level commensurate with the scale of the piracy problem.Market Access: Barriers, investment restrictions, and discriminatory treatment that make it difficult for U.S.
producers and distributors to compete on a level playing field in foreign markets must be dismantled.
9See Stephen E. Siwek, Copyright Industries in the U.S. Economy: The 2016 Report (December 6, 2016) available at: https://iipa.org/reports/copyright-industries-us-
economy/. Core copyright industries are those whose primary purpose is to create, produce, distribute, or exhibit copyright materials. The link between copyright
protection and economic growth is also well documented by the World Intellectual Property Organization (WIPO) in
its report,2014 WIPO Studies on the Economic
Contribution of the Copyright Industries: Overview; and the WIPO website now provides links to 49 country studies employing virtually the same agreed-upon
methodology. See,http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/economic_contribution_analysis_2014.pdf and
http://www.wipo.int/copyright/en/performance/. The WIPO national studies provide the economic underpinnings for efforts to reform copyright law, improve
enforcement, and lower market access barriers. The Motion Picture Association Asia Pacific has issued a series of "Economic Contribution of the Film and Television
Industry" studies. The most recent editions of these studies include: China (2015), Australia (2015), Hong Kong (2015), Japan
(2015), Malaysia (2014), India (2013),Taiwan (2013), Shanghai (2012
), New Zealand (2012), Indonesia (2012), Thailand (2012), South Korea (2012 ). See Motion Picture Association Asia-Pacific,
Research and Statistics, available at:
http://mpa-i.org/research-and-statistics/. There have been other studies prepared, including some in the music and video game
industries. See, e.g., UK Music's The Economic Contribution of the Core UK Music Industry (2013), available at:http://www.ukmusic.org/assets/general/The_ Economic_Contribution_of_the_Core_UK_Music_Industry___WEB_Version.pdf and
PWC's Economic contribution of the New Zealand music industry, 2012 and 2013 (2014), available at: http://www.wecreate.org.nz/wp-content/uploads/2014/07/PWC-
Music.pdf and Stephen Siwek's Video Games in the 21st Century: The 2017 Report (2017), available at: http://www.theesa.com/wp-
10See WTO TRIPS Articles. 41, 61. There are many obligations for civil, administrative and criminal remedies in Articles 41 through 61, including for provisional
relief and judicial procedures (e.g., injunctive relief), which are particularly critical for online enforcement.
IIPA 2018 Special 301 Letter to USTR, February 8, 2018, page v Here is a summary, in turn, of the major challenges across the global markets in each of these three categories: (1) legal reforms; (2) enforcement; and (3) market access.A. LEGAL REFORMS
1. WIPO Internet Treaties
The World Intellectual Property Organization's (WIPO) Copyright Treaty (WCT) and Performances andPhonograms Treaty (WPPT) set the global minimum standards for providing copyright holders with a full panoply of
exclusive rights in the digital networked environment. The treaties also include an overarching commitment to
deterrent levels of enforcement of those rights online as well as offline. In the 22 years since their adoption, 96
countries have acceded to each of these critical treaties. There are a number of large trading partner countries that
have not acceded to the treaties at all, including: Brazil, India, Pakistan, Saudi Arabia, Vietnam, South Africa andNew Zealand,
as well as smaller markets, such as Bolivia, Kuwait and Lebanon. Many more countries, while theyhave joined the treaties, have yet to implement the treaties' obligations into their national laws, including Algeria
(2014), Ecuador (2002), Mexico (2002), and the UAE (2004). IIPA commends Nigeria's accession to the WCT and
WPPT in January 2018; it now faces the task of implementing the treaties into its national laws. The U.S.
Government should make it a priority to encourage all U.S. trading partners both to accede to and fully implement the
WIPO Internet Treaties.
The WIPO Internet Treaties were the catalyst for the global consensus on the need to provide legalprotection to technological protection measures (TPMs) that copyright owners use to control access to their works.
As discussed below, these access controls are key enabling technologies for the range of online digital services that
have brought more creative works than ever to consumers. IIPA urges the U.S. Government to remain vigilant on this
issue, especially in reviewing legislation purporting to implement the WIPO Internet Treaties, and when reviewing
copyright reforms being undertaken in our trading partner countries. In particular, TPMs protections should be
adopted in ways that protect access controls independent of whether there is an accompanying copyright
infringement. Only in this way can effective TPM legislation establish a practical and enforceable anti-circumvention
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