USTR calls out countries needing better IP protections in annual report 

biotech special 301 report

Despite progress from some U.S. trading partners in developing global intellectual property protections that enable innovation, much improvement is needed, according to the Special 301 Report by the U.S. Trade Representative (USTR) released on April 26.

The report, produced annually to highlight U.S. concerns about global IP protection, took on board several suggestions made by the Biotechnology Innovation Organization (BIO) during the comment period earlier this year. It also mentioned the possibility of a WTO IP waiver that BIO opposes.

“A couple of our suggestions have been taken into consideration and are reflected in the report,” said Justin Pine, BIO Senior Director of International Affairs. “Most notably, USTR continues to express concern about the implementation of China’s human genetic resources (HGR), China’s biosecurity law, and other market-distorting measures that require or pressure technology transfer from U.S. companies. Such policies make accessing global markets very difficult for U.S.-based small- and medium-sized biotech firms.”

Obstacles to protecting the global IP necessary to enable R&D mentioned in the report include:

  • challenges with border and criminal enforcement against counterfeits
  • inadequacies in trade secret protection and enforcement in China and elsewhere
  • troubling forced or pressured technology transfer policies that may unfairly disadvantage U.S. right holders in markets abroad 
  • other ongoing, systemic issues regarding IP protection around the world 

The Watch List

China remained on USTR’s Priority Watch List of countries with problematic IP protection regimes according to the report, which said the country’s limited efforts at reform have slowed.

“While right holders have welcomed some positive developments, their concerns remain about the adequacy and effective implementation of IP measures, as well as about long-standing issues like technology transfer, trade secrets, counterfeiting, online piracy, copyright law, and patent and related policies,” the report’s section on China said.

Of the 11 countries that BIO recommended for the Priority Watch List, the USTR put eight on either the Watch List or the Priority Watch List: Argentina, Brazil, Canada, Chile, China, Colombia, India, and Mexico. Those countries are considered to need improvement in IP protections.

There was also a catalog of promising developments and best practices around the world as countries improve their regulatory regimes and cooperation with industry to help strengthen global IP protection.

Still considering WTO IP waiver

The document still holds out the possibility of the U.S. supporting a World Trade Organization (WTO) TRIPS waiver of IP protections for COVID-19 diagnostics and therapeutics, an extension of the 2022 waiver on COVID-19 vaccine IP. The USTR said its decision will be based on a U.S. International Trade Commission (USITC) report, which is scheduled for release on October 17.

BIO had opposed the 2022 waiver and expressed its opposition to a waiver extension in a USITC public hearing held in March. “A waiver of IP rights would significantly disrupt the existing investment and research landscape in the biotechnology sector—with a particularly acute impact on U.S. based SME biotech firms,” BIO Chief Policy Officer John Murphy said.

Pine said it is odd to see mention of an IP giveaway like a TRIPS waiver in a report that defends the merits of strong and reliable IP protection to enable innovation and support U.S. workers.  “USTR twists itself into a pretzel, simultaneously justifying the TRIPS waiver while defending the importance of IP rights for American workers and U.S. driven innovation—and calling for other countries to eliminate market-distorting IP policies,” he said.

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