Co-Authored by Sharath Patil

Special 301 Report

The United States Trade Representative (“USTR”) conducts an annual evaluation known as the Special 301 review. In the review, USTR identifies countries that deny adequate and effective protection of intellectual property (“IP”) rights or deny fair and equitable market access to U.S. persons who rely on IP protection. As a result of this review, trading partners that present the most significant concerns regarding IP rights are placed in one of three categories: 1) the Watch List, 2) the Priority Watch List, and 3) Priority Foreign Countries.

The ‘Watch List’ and ‘Priority Watch List’ categories are non-statutory categories. The Watch List is an administrative category created by USTR to designate countries that have intellectual property protection inadequacies that are less severe than those on the Priority Watch List, but still attract U.S. attention. Meanwhile, the Priority Watch List is an administrative category created by the USTR for those countries whose acts, policies, and practices warrant concern, but who do not meet all of the criteria for identification as Priority Foreign Country. The USTR may place a country on the Priority Watch List when the country lacks proper intellectual property protection and has a market of significant U.S. interest. If designated on the Priority Watch List, the USTR must develop an action plan with respect to that foreign country. If the President, in consultation with USTR, determines that the foreign country fails to meet the action plan benchmarks, then the President may take appropriate action with respect to the foreign country

In 2020, USTR designated the following countries under its Watch List:

In 2020, USTR designated the following countries under its Priority Watch List:

The third category, ‘Priority Foreign Country,’ is a statutory category and is the worst classification given in the Special 301 review process. A Priority Foreign Country designation is given to “foreign countries that deny adequate and effective protection of intellectual property rights or fair and equitable marketing access to U.S. persons relying upon intellectual property rights protection. A statutory category for those designated by the USTR as having “the most onerous or egregious acts, policies or practices that deny intellectual property protection and limit market access to U.S. persons or firms depending on intellectual property rights protection” with the “greatest adverse impact (actual or potential) on the relevant United States products.” These countries may be investigated under section 301 provisions of the Trade Act of 1974.62 If a country is named as a “Priority Foreign Country,” the USTR must launch an investigation into that country’s IPR practices. The USTR may suspend trade concessions and impose import restrictions or duties, or enter into a binding agreement with the priority country that would eliminate the act, policy, or practice under scrutiny. In 2020, no country was identified as a Priority Foreign Country.

USTR Robert Lighthizer made the following remarks regarding the 2020 Special 301 Report:

“The Trump Administration is committed to holding intellectual property rights violators accountable and to ensuring that American innovators and creators have a full and fair opportunity to use and profit from their work. Over the last year, USTR has secured strong and enforceable obligations on intellectual property in our historic agreements with China, Canada, and Mexico.”

Comments Due January 28, 2021

USTR is seeking comments for its 2021 Special 301 review. USTR requests written comments that identify acts, policies, or practices that may form the basis of a country’s identification as a Priority Foreign Country or placement on the Priority Watch List or Watch List. Specifically, USTR requests that interested persons identify those countries whose acts, policies or practices deny adequate and effective protection for IP rights or deny fair and equitable market access to U.S. persons who rely on IP protection.  According to USTR, written submissions from the public are a key source of information for the Special 301 review process.

The deadline for submitting written comments from the public is January 28, 2021. USTR will publish the 2021 Special 301 Report on or about April 30, 2021.

Contact Us

Diaz Trade Law has significant experience on intellectual property matters and in submitting comments on federal rulemaking. If you require assistance filing comments for the Special 301 review or have other questions pertaining to intellectual property, contact us today at info@diaztradelaw.com or 305-456-3830.