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MAY
1
2 YEARS

Spain Escapes U.S. Trade Rep's Piracy 'Watch List'

Ukraine and 40 other countries are not so lucky.

The Office of the United States Trade Representative has released its annual "Special 301" report, intended to highlight which countries raise concern over intellectual property practices.

The big loser this year is Ukraine, which has been designated a "Priority Foreign Country" due to what the U.S. government says is a "severe deterioration of enforcement" in pirated software and piracy over the Internet. The U.S. Trade Rep also flags the "nontransparent administration of royalty collecting societies" there.

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Other countries enjoyed better treatment. Spain and Bulgaria are no longer on the "Watch List," although technically, the U.S. will be still watching. The agency says it will soon be conducting reviews of both countries to assess progress on the IP front. Another country that has been given a different grade this year is Canada, moving from the "Priority Watch List" to the less scary "Watch List."

The report (read here in full) is prepared annually by the United States Trade Representative, which was created by the executive order of President John F. Kennedy in 1962. Since then, the office negotiates bilateral treaties and prepares the report, released pursuant to Section 182 of the Trade Act of 1974.

The countries that made the "Priority Watch List" are Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand and Venezuela.

Of those countries, China will likely draw the most attention thanks to its huge, important market.

"Obtaining effective enforcement of IPR in China remains a central challenge, as it has been for many years," says this year's 301 report, which identifies legal reform as a positive sign there and trade secrets as a concern.

The report also notes that "over 90 percent of the revenue generated by U.S. films in China comes in the form of box office revenues, compared to 25-30 percent in the United States. This difference is partly due to widespread piracy of motion pictures over the Internet and on optical discs."

Canada is one of 30 countries on the "Watch List," along with such countries as Israel, Egypt, Mexico and Brazil. The report explains why Canada has been bumped down in the country's concerns.

According to the report, "In June 2012, the United States welcomed the passage of the Copyright Modernization Act, which, among other things, is designed to implement Canada’s obligations under the WIPO Internet Treaties and to address the challenges of copyright piracy in the digital age. In March 2013, Canada also introduced the Combating Counterfeit Products Act to strengthen IPR enforcement, which included provisions that would provide ex officio authority to Canadian customs officials to seize pirated and counterfeit goods at the border."

The government also identifies some larger trends out there.

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Among them is the "emergence of Media Box piracy, whereby 'boxes,' often with capability to play high definition content, are loaded with large quantities of pirated works. These boxes may be sold with preloaded content, but can later have new content uploaded for a relatively low fee."

The MPAA has released a statement in reaction to the 301 Report, flagging Ukraine's inclusion and the need for Thailand to enact meaningful anti-camcording legislation.

Hollywood studios have also given their version of a congratulations to Spain. According to the press release, "MPAA welcomes the efforts of the Spanish government to enforce copyright protection and looks forward to concrete results in the months ahead."

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner