USTR Finds IP Infringement in Many Countries, Though China, Taobao Improving

The Office of the U.S. Trade Representative released results Thursday of its 2015 Special 301 out-of-cycle review on intellectual property infringement. It focused on the sale of counterfeit goods online, listing 14 online markets alongside physical markets in Argentina, Brazil, China, India, Indonesia, Mexico, Nigeria, Paraguay and Thailand. USTR cited the difficulties customs authorities face attempting to stop shipments of counterfeit goods sold online, and the growing problem of free trade zones enabling counterfeit activities. Major Chinese online shopping website Taobao again escaped inclusion, after last being listed in 2012. USTR said Taobao parent Alibaba took some enforcement measures over the past year, including “a good-faith product takedown procedure, a three and four strikes penalty system, and an English-language version of the TaoProtect portal to register [intellectual property rights] and submit takedown requests.” But USTR said it's “increasingly concerned” by reports that Alibaba’s enforcement program is “too slow, difficult to use, and lacks transparency.” The report applauded China for its efforts over the past year to examine the problem of counterfeit sales online; a study by that country in November found less than 59 percent of articles sold online last year were genuine. USTR cautioned that large free trade zones have “become enablers for counterfeit activities and are being used as a staging ground to disguise the illicit nature of counterfeit goods, to add infringing trademarks, logos and packaging to products, as well as to conceal the origin of counterfeit goods.” The EU has said counterfeiters are to blame, noted USTR. The issue would be partially addressed by the Trans-Pacific Partnership agreement, it said. Distribution of counterfeit goods bought online is a major enforcement challenge for customs authorities, said USTR. The report “shines an essential light on the rampant nature of content theft, which diminishes the work of creators, harms consumers through the spread of malware,” MPAA CEO Chris Dodd said in a statement. “As the film and television industry relies on robust copyright frameworks to create and distribute content around the globe, the report is a reminder that it’s important to include strong protections for intellectual property in trade agreements such as the TPP.” USTR’s decision to take “action against the identified markets is a win for both consumers and rights holders, allowing the legitimate foreign market distribution of, and thus greater access to, legal content -- of literary works, music, movies and TV programming, video games, software, and other products and services,” said International Intellectual Property Alliance Counsel Steven Metalitz in a statement.