X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A joint venture partner in China has just come out with a knockoff of the venture’s product. The Chinese company is not subject to meaningful suit in the United States and doesn’t care if the U.S. partner pulls the plug on their deal. An attempt to sue the company in China is going nowhere. Is the U.S. partner out of luck? A Latin American company is selling a product here that infringes a U.S. patent. But the patent owner doesn’t want to sue the U.S. importers and distributors because they’re also its customers. The patent owner could file a Section 337 case at the U.S. International Trade Commission, but the dispute may not meet the statutory criteria. It has tried filing suit in the infringer’s home country, but the local patent laws have some big gaps. Are there any other options? A U.S. company is starting to see a lot of software imported from India that infringes its intellectual property and that of other companies in the industry. The volume and value of this software isn’t large enough yet to justify filing a case in the United States. Besides, the products are being sold by numerous small distributors all across the country and over the Internet, so there are major jurisdictional issues. The company is considering suit in India, but its Indian lawyer says that will take years and is not likely to succeed. What should the company do next? When traditional IP remedies won’t fix a problem with international ramifications, individual companies and entire industries should look to a different set of tools: the many levers of trade policy. Uncle Sam is ready and willing to play a critical role in enforcing IP rights. Government officials know that intellectual property is often where the money is in today’s economy. Consequently, U.S. administrations in recent years have been broadly responsive to IP concerns, and IP-based industries have had a huge impact on the focus and scope of U.S. trade policy. Moreover, these bilateral and international trade efforts have often been successful. IP laws and enforcement have been significantly improved in such key markets as Brazil, China, and India. More focused victories have also been won. For example, working with Brazil, the United States has pressured Paraguay to crack down on major trafficking in pirated materials. Even company-specific issues have gained traction — such as Monsanto’s effort to enforce its rights concerning genetically modified seeds in foreign markets. The bottom line is that the scope of protection now recognized in U.S. and international trade law and trade policy is broad. Companies and trade associations of virtually every size and interest can find help here, and they ignore these tools to their competitive disadvantage. WHAT’S YOUR PROBLEM? Those seeking to leverage trade policy must understand its rules, procedures, and customs, both formal and informal, and the circumstances when it can be put to best use. Let’s assume that, incensed with the infringement of your intellectual property and the inadequacy of the source country’s response, you’re ready to march into a government office to ask for help. What should you do and say to make yourself heard? First, any approach to a government agency is best built on the back of efforts to handle the matter through other means. You need not have brought a lawsuit, but there should be a credible track record of reasonable albeit unsuccessful efforts to resolve the problem. Second, the problem must bear some connection to U.S. trade or international obligations. Third, a problem germane to only one company may still get attention, but it helps if the problem has implications for other U.S. companies, either immediately or down the road. A number of additional considerations fall under the heading of why the U.S. government should care about your case: • How symptomatic is this problem of a larger issue that businesses are facing or may soon face in a foreign country? What is the overall impact on the United States?

• How effective is U.S. intervention likely to be? • How clear is the violation? Can it be clearly explained to a policy-maker in light of U.S. law, policy, and international obligations? • What other political, economic, and international policy considerations are in play for the United States and other countries? WHO CAN HELP? There are a wide range of government officials charged with worrying about the fate of U.S. intellectual property overseas. The lead agency on the development of trade and foreign investment policy and negotiating strategy is the Office of the U.S. Trade Representative. The USTR is the Cabinet-level top adviser to the president on these issues. Working with other agencies, departments, and Congress, the USTR spearheads the implementation and enforcement of trade laws, policies, and programs. Within the agency, there is an office dedicated to IP issues, led by an assistant U.S. trade representative, who is the lead IP policy official in the agency. The office also works with the newly created position of chief negotiator for IP enforcement. Furthermore, officials in virtually every other USTR office play a role in IP-related policy-making, including leading negotiations on IP issues with foreign countries. The Commerce Department and several of its divisions participate actively in trade policy. The U.S. Patent and Trademark Office brings IP expertise to the table; the International Trade Administration represents Commerce in the interagency trade policy-making process; and Foreign Commerce Service officers reside in embassies around the world to assist U.S. businesses in foreign markets. The Patent and Trademark Office also has stationed officials in the U.S. embassies in Brazil, China, Egypt, India, and Thailand, due to the importance of our IP agenda in those areas. The State Department is another major player in the IP/trade arena. Its Economic, Energy, and Business Affairs Bureau has an office focused on IP issues, and its regional bureaus typically are the main interface with foreign governments. Furthermore, all U.S. ambassadors and embassy economic teams are charged with advancing the interests of the U.S. economy and business, making them part of the government’s global IP effort. Within Congress, key roles are played by the Senate Finance Committee, the House Ways and Means Committee, the two Judiciary committees, and the two Commerce committees. Individual lawmakers can offer more help in cases of particular interest to them. Also, the Library of Congress and its Copyright Office provide technical assistance to the USTR, Commerce, and State. WHICH TOOL TO CHOOSE? Now you know the players. What do you suggest they do to help? In other words, what are the specific tools available to them? Special 301 investigations. The USTR annually prepares a Special 301 list, which identifies countries that do not adequately protect IP rights. The most egregious violators are identified as “priority foreign countries” and are subject to further investigation. In the past, the notoriety alone of being named to a Special 301 list has often driven progress on IP issues in those countries. As part of the Special 301 review last year, for example, the USTR noted significant progress in several countries on the list. Indonesia and Malaysia had taken steps to combat optical-disc piracy and the production of counterfeit products. The Philippines made progress against IP piracy. And South Korea had set up a Copyright Protection Center and increased enforcement against illegal software. Sometimes countries improve enough to be removed from the Special 301 list. Azerbaijan and Kazakhstan were recently taken off the watch list due to better IP enforcement. Uruguay was removed due to better copyright enforcement. And, in an example of how specific problems can be addressed, the Slovak Republic was removed due to progress in stopping unfair commercial use of testing and other data submitted by drug companies seeking marketing approval for their products. Generalized System of Preferences and other tariff program reviews. The United States sets tariff rates of zero for many products from more than 100 developing countries to encourage market-driven economic development. One of the criteria for these preferences is that the country protect our IP rights. An interagency group conducts an annual review of the Generalized System of Preferences, including, when requested, the adequacy of IP protection. Similar annual reviews are conducted for other specialized tariff programs, such as one focused on the Andean countries of Peru, Ecuador, Colombia, and Bolivia. In fact, the USTR has the authority to conduct reviews of tariff preference eligibility at any time, and the president can modify those preferences at any time. As part of the 2006 review of the Generalized System of Preferences, the USTR cited progress in Pakistan, particularly noting the closure of numerous pirate optical-disc factories and improved enforcement efforts, including the establishment of an agency to centralize and coordinate such enforcement. Tariff preferences were restored for Ukraine due to progress in combating optical-disc piracy. Trade agreement negotiations. When a foreign country is negotiating a bilateral or multilateral trade agreement with the United States, American businesses can work with our government to encourage that country to improve its IP protection. In fact, U.S. trade negotiators are required by statute to seek provisions that “adequately and effectively” protect intellectual property. Consequently, U.S. leverage to obtain improved IP protection is maximized during such negotiations, and officials across the government work closely to advance IP interests. As noted, great progress has been achieved for global intellectual property through such efforts. Clearly, the single most significant victory is the Agreement on Trade-Related Aspects of Intellectual Property Rights, better known as TRIPS, which requires the 150 members of the World Trade Organization to bring their IP regimes into compliance with a set of international rules or potentially face commercial retaliation from other members. As more countries seek to join the WTO, they, too, must take on these obligations. In Russia, for example, Starbucks fought over the use of its trademark for more than three years. It finally prevailed in late 2005, after Russia modified its IP laws in order to join the WTO. The United States has also negotiated progressively more expansive IP protection provisions through a series of bilateral free trade agreements. This sweeping protection is backed up by enforceable dispute settlement provisions. The four pending free trade agreements (with Colombia, Panama, Peru, and South Korea) all have such IP discipline. Section 301 investigations. Under Section 301 (not to be confused with Special 301), the USTR can investigate a foreign unfair trade practice on its own initiative or based on a private party’s petition. It may negotiate to eliminate the practice, initiate a WTO complaint, or retaliate against the relevant foreign government in accordance with WTO procedures. Be warned: Section 301 is not to be invoked lightly. Trading partners view it as relatively heavy-handed action. So it tends to be an option at the end of a carefully orchestrated crescendo of efforts. STOP! Initiative. The basic idea here is to facilitate an international alliance of governments against particular instances of piracy and counterfeiting. The interagency program, started in 2004, has led to discussions and efforts to work collaboratively with such countries as France, Germany, Hong Kong, Japan, Singapore, South Korea, and the United Kingdom. TRIPS implementation. Although TRIPS was signed more than a decade ago, implementation of its many provisions remains an ongoing process. Each year the United States provides technical assistance to many trading partners through a process that involves the Copyright Office, the Patent and Trademark Office, Commerce, State, and the USTR. U.S. officials learn firsthand where problems exist and how they can best be remedied, through TRIPS or other means. Furthermore, the TRIPS Council is a forum where IP issues are discussed, and members are encouraged to fulfill their WTO obligations. WTO policy review. The WTO itself runs a periodic review of its members’ compliance with their obligations, including under TRIPS. This is an opportunity for the U.S. government to raise a variety of concerns and shine a public spotlight on those practices it considers problematic. Private sector concerns are typically on the U.S. agenda. Trade diplomacy. More generally, American companies can encourage diplomatic overtures aimed at piracy and counterfeiting. In fact, executive branch officials at all levels, as well as members of Congress and their staffs, routinely raise these issues with foreign governments in formal and informal settings. The scope of such activity may not be well known, as it tends to hit the front page only when the president, the USTR, or a prominent lawmaker is doing the talking. But it is a daily occurrence, and it frequently leads to meaningful IP enforcement. Congressional pressure. The six congressional committees noted earlier all engage in continuous dialogue with the USTR and other agencies about IP concerns raised by constituents. Sometimes this occurs in the context of formal congressional hearings, where administration officials testify and answer questions and where private citizens can publicly make their case. More commonly, the dialogue takes place behind closed doors. Either way, this is an important aspect of the making of IP trade policy. SUCCESS HAPPENS Cynics may dismiss trade policy as a never-ending gabfest with little to show for itself, but they are wrong. Those seeking to better protect intellectual property through trade tools have a strong — one could say unprecedented — record of success (despite the recent frustrations of some IP industries). Concerns about intellectual assets have had a powerful influence on U.S. trade law and policy. IP protection has taken up as much time and energy of U.S. trade policy-makers as just about any issue over the past 20 years. While trade policy is still not a solution for every foreign IP problem, it is a tool that should be in every company’s and every industry’s tool kit for just those moments when foreign courts and enforcement regimes fail to deliver results.


Jon E. Huenemann and James B. Altman are with the D.C. office of Miller & Chevalier. Huenemann, a nonattorney principal, is a trade, investment, and global market policy expert with nearly 16 years’ experience as a senior official in the Office of the U.S. Trade Representative. Altman, a partner, specializes in complex international intellectual property disputes, including trade litigation.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.