USTR’s 2023 assessment on Intellectual Property Rights

Intellectual property (IP) infringements remain a persistent challenge for businesses worldwide, encompassing various illicit activities such as the distribution of counterfeit medicines, falsified ingredient labels on medications, e-book piracy websites, and the proliferation of imitation designer shoes.

Recognizing the gravity of this issue, the Office of the United States Trade Representative (USTR) has recently released its 2023 Special 301 Report, focusing on evaluating the adequacy and effectiveness of intellectual property protection measures and enforcement practices employed by trade partners. This annual report serves as a comprehensive assessment of intellectual property rights protection and market access practices in foreign countries, as mandated by U.S. trade laws

This report highlights some of the key elements related to intellectual property rights (IPR) protection and fair trade practices. This element includes the identification of countries that are considered not serious enough to adequately protect IPR, countries on the ‘Priority Watch List’, encouragement to improve IPR regimes, and efforts to engage the United States government with countries to address IPR issues.

The Priority Watch List: Identifying Intellectual Property Concerns

In its comprehensive review encompassing over 100 trading partners, USTR has meticulously examined the intellectual property landscape across the globe. As a result of this assessment, the USTR has identified seven countries that warrant particular attention and scrutiny, placing them on the Priority Watch List

Through an in-depth evaluation process, the USTR has carefully analyzed the intellectual property protection measures and enforcement practices of these countries, emphasizing the need for heightened attention and concerted action to address the prevailing challenges.

For the 2023 edition of the Priority Watch List, the USTR has reaffirmed the inclusion of Argentina, Chile, China, India, Indonesia, Venezuela, and Russia—maintaining continuity with the countries identified in the previous year’s list. These countries are deemed to have displayed limited progress or even regressed in crucial areas pertaining to intellectual property rights, encompassing the following key aspects:

1. Enforcement of Intellectual Property Rights (IPR): Insufficient or declining enforcement of IPR laws, hindering the effective deterrence and prosecution of intellectual property violations.
2. Border Control and Illicit Goods Circulation: Weaknesses in border control measures, resulting in the illicit flow of counterfeit and pirated goods, undermining intellectual property protection efforts.
3. Compliance with International Trade Agreements: Lack of implementation or adherence to international trade agreements that pertain to intellectual property rights, impeding the harmonization of global standards.
4. Inadequate Legal Framework: Absence of a robust legal framework that provides comprehensive protection for intellectual property rights, leaving room for infringement and unauthorized exploitation.

Since 2018, for instance, Indonesia has consistently been included on the list. Nevertheless, the Indonesian government has been actively striving to improve its standing and endeavors to address the concerns. Notably, the government has implemented measures such as closely monitoring export and import activities through the Directorate General of Customs and Excise (DJBC) and conducting cyber patrols on e-commerce platforms, overseen by the Directorate General of Intellectual Property (DJKI). These efforts reflect the commitment of the Indonesian government to tackle the identified issues and work towards removal from the list.

What companies should be doing 

In addition to the efforts made by governments, companies, as intellectual property owners, play a vital role in safeguarding their assets in all countries where they conduct business.

To effectively protect their intellectual property, companies should consider and implement the following prevention, detection and investigation measures: 

• Register Intellectual Property: Companies should prioritize the registration of their intellectual property, such as trademarks, patents, copyrights, or trade secrets, in relevant jurisdictions. This legal protection helps establish ownership rights and provides a strong foundation for enforcement actions if infringement occurs; 
• Add and improve continuously security features to their products to ensure proper authentication of genuine products; 
• Implement Internal Policies and Procedures: This includes establishing protocols for handling confidential information, conducting regular IP audits, and training employees on the proper handling and safeguarding of intellectual property assets; 
• Monitor and Enforce Rights: Regular monitoring of markets and online platforms is crucial to identify any potential infringements or unauthorized use of intellectual property; 
• Due Diligence in Supply Chain: By conducting supplier vetting, verifying authenticity, and implementing robust quality control measures to ensure that the products or components they source are not involved in intellectual property violations;
• Collaboration with authorities such as local law enforcement agencies, by reporting any instances of intellectual property infringement or participating in industry-wide initiatives to combat counterfeiting and piracy;
• Education and Awareness: Companies need to educate their employees but also the general public about the importance of intellectual property rights, the risks associated with infringement, and the appropriate use of protected intellectual property. This can be achieved through training programs, internal policies, and ongoing awareness campaigns;
• To actively engage the public in combating fake products and promoting intellectual property protection, companies should establish effective channels for reporting incidents;
• And engage with specialized brand protection service providers to support with vigorous and continuous anti-counterfeiting programs. 

By adopting these measures, companies can proactively keep the public safe from potentially dangerous and sub-standard counterfeits, safeguard their intellectual property, while preserving their competitive advantage in the global marketplace.

Photo by Vladislav Klapin on Unsplash