“The Special 301 Report spotlights one of the central challenges facing the global economy,” explained USTR, Susan Schwab, continuing:

“Pirates and counterfeiters don’t just steal ideas; they steal jobs, and too often they threaten our health and safety. The Administration has been committed to stepping up the fight against IPR infringers who seek to profit from American artists, inventors, and entrepreneurs.”

The Special 301 Report is viewed by the US government as constituting "a critical policy tool for focusing on urgent problems, including the growing problem of Internet piracy and the counterfeiting of pharmaceuticals and other products that threaten the health and safety of consumers around the world".

The Report aims to provide a basis for constructive engagement with US trading partners in order to address these challenges, particularly in key countries such as China and Russia.

This year's Special 301 Report highlighted serious continuing IPR concerns with respect to China and Russia, in spite of some evidence of improvement in both countries.

With regard to the sitution in China, the Report stated:

"USTR announced that it will once again retain China on the Priority Watch List and continue monitoring China under Section 306 of the 1974 Trade Act, thus maintaining pressure on China to improve its IPR situation. While the United States continues to seek cooperative channels to work with China to strengthen that country’s IPR regime, high levels of copyright piracy and trademark counterfeiting remain serious concerns."

"At the same time, the United States is also using the WTO dispute settlement process to address a number of specific deficiencies in China’s IPR regime."

Commenting, meanwhile, on the state of play with regard to Russia, the USTR announced that:

"The Administration also continues to work for improvements to the intellectual property regime in Russia. Although Russia has made some progress – for example, in moving optical disc factories off of government-controlled sites and raiding unlicensed factories – large-scale production and distribution of IP-infringing optical media and Internet piracy remain significant problems that require more enforcement action."

"The United States will continue to monitor to ensure that Russia moves to implement a variety of legal and law enforcement improvements to which it committed as part of a bilateral agreement with the United States on Russia’s accession to the WTO. Implementation of these commitments remains essential to completing the final multilateral negotiations on the overall accession package."

In addition to flagging prominent intellectual property concerns of US trade policy, the USTR explained that the Special 301 Report also provides an opportunity to recognize trading partners whose efforts to improve intellectual property protection and enforcement are delivering results, both for home-grown innovators in those countries and for US right holders.

It went on to reveal that Egypt, Lebanon, Turkey, and Ukraine are being moved to the Watch List (from the Priority Watch List), reflecting improvements in each country’s IPR regime. Two other trading partners – Belize and Lithuania – are being removed from the Special 301 Report altogether.

This year’s Special 301 Report places 46 countries on the Priority Watch List, Watch List, or the Section 306 monitoring list.

There are 9 countries on this year’s Priority Watch List: China, Russia, Argentina, Chile, India, Israel, Pakistan, Thailand, and Venezuela. Countries on the Priority Watch List are viewed by the US as not providing an adequate level of IPR protection or enforcement, or market access for persons relying on intellectual property protection, in absolute terms and/or relative to a range of factors such as their level of development. Priority Watch List countries will be the subject of particularly intense engagement through bilateral discussion during the coming year.

36 trading partners are on the lower level Watch List, meriting bilateral attention to address IPR problems. These are: Algeria, Belarus, Bolivia, Brazil, Canada, Colombia, Costa Rica, Czech Republic, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Hungary, Indonesia, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Republic of Korea, Romania, Saudi Arabia, Spain, Taiwan, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam.

The Administration further announced that it will conduct Out-of-Cycle Reviews for Taiwan and Israel to assess progress on specific IPR issues.

The Report announced, with relation to other countries, that:

"Canada has taken some significant steps in the past year and, given the importance of the outstanding issues and maturity of its economy, we look forward to additional action in the coming months on the IP reforms identified as key priorities by the Government of Canada."

And revealed that:

"Paraguay will continue to be subject to Section 306 monitoring under a bilateral Memorandum of Understanding that establishes objectives and actions for addressing IPR concerns in that country."