The United States, the country’s largest trading partner, has retained the Philippines on the Watch List with an Out-of-Cycle Review to be conducted this year due to its ineffective enforcement of intellectual property laws specifically noting inefficiencies in the judicial system.
This was contained in the 2010 Special 301 Report, which was released Friday, April 30 by the US Trade Representative office after reviewing the IPR protection and enforcement of its 77 trading partners.
Although, the report noted of some Philippine government agencies making progress to increase raid and seizure activities particularly in controlling illegal optical media production it also stressed these efforts have proven insufficient to address widespread piracy and counterfeiting in the country.
In particular, the report identified Greenhills, Quiapo, Binondo, Makati Cinema Square, and 168 Mall in Manila where street stalls in these areas are a haven for counterfeit clothing, shoes, watches, and handbags due to the unwillingness of local investigation agencies and government authorities to confront stall owners, trademark owners have had a difficult time obtaining meaningful enforcement action. Also, although a 2006 Executive Order establishes landlord liability, reportedly no landlords have yet been prosecuted for IPR violations.
“The United States encourages ongoing efforts to address inefficiencies in the judicial system, and to establish specialized IPR courts so that rights holders have a reliable avenue for recourse and prosecutions move forward effectively and without delay. The United States also encourages the Philippines to complete its work on legislative reforms needed to strengthen IPR protection, including the implementation of the WIPO Internet Treaties, which has been pending in Congress for years, and the final signing of the anti-camcording bill,” the report stated.
The United States said it remained concern about amendments to the patent law that prohibits patents on certain chemical forms unless the applicant demonstrates increased efficacy.
“The United States urges the Philippines to address its IPR protection and enforcement challenges, and looks forward to working with the Philippines in the coming year to address these and other issues,” the report added.
Asked for comment on the 2010 Special 301 Report, Intellectual Property Office of the Philippines Director General Atty. Ricardo R. Blancaflor told Manila Bulletin that the concern on efficiencies of the country’s judicial system in the enforcement of IPR laws will be addressed by the Supreme Court.
“The Supreme Court will address that in the rules which are forthcoming,” Blancaflor said.
“The IPO is proud to report that various steps has been made in the past like improvement in services for lessen time for patent examination, over P5.6 billion in seizures in greater public awareness on IPR protection, Blancaflor said.
The Philippines was listed in the Priority Watch List of the US Special 301 until 2005. It was downgraded in 2006 after the USTR noted of some improvements in the country’s efforts to enforce IPR protection and prosecute violators. The country has remained in that category until now.
By placing the Philippines for out- of-cycle review (OCR) this year, this means the USTR encourages progress on IPR issues of concern. The OCR provides an opportunity for heightened engagement with the trading partner on IPR issues. Successful resolution of specific IPR issues may in some circumstances lead to a change in a country’s status on the Special 301 list outside of the typical time frame for the annual Special 301 Report.
Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on intellectual property. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.
Trading partners on the Priority Watch List means there is no provision of adequate level of IPR protection or enforcement, or market access for persons relying on intellectual property protection.
China, Russia, Algeria, Argentina, Canada, Chile, India, Indonesia, Pakistan, Thailand, and Venezuela are on the Priority Watch List in this year’s 2010 Special 301 Report. These countries will be the subject of particularly intense engagement through bilateral discussion during the coming year.
Twenty-nine trading partners are on the lower-level Watch List, meriting bilateral attention to address underlying IPR problems: Belarus, Bolivia, Brazil, Brunei, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, Romania, Spain, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam.
The USTR said that fighting IPR theft in overseas markets is critical to the livelihoods of the estimated 18 million Americans who work in intellectual property-intensive industries.
As such, the US is using a country’s IPR standing as a measure to qualify for benefits under the US Generalized System of Preferences (US-GSP) trade program, which grants zero duty on its export to the US market.
In 2009, the Philippines enjoyed duty-free access to the US market for more than $733.6 million or 10.8 percent of the country’s total exports under the US-GSP system.
In its earlier 66-page submission to the USTR, Atty. Andrew Michael S. Ong, then officer-in-charge and Deputy Director General of the Intellectual Property Office of the Philippines stressed that the Philippines has made sustainable progress in its holistic IP strategy that includes several components besides intensifying IP enforcement.
These components include public outreach and education, capacity and institutional building, judicial reforms and other rules-based initiatives to develop the desired IP system.
Based on the detailed report, IP Philippines posted positive milestones for the period 2005 to 2009 including the passage of the Anti-Camcording Bill, the Anti-Cable TV and Cable TV and Cable Internet Pilferage Bill and the Technology Transfer Bill and the progress of the other IP-related bills still in Congress.
IP Philippines also cited the creation of IP Courts with national jurisdiction thus moving one step nearer to realization with the convening of the special committee to finalize the draft rules prior to submission to the Supreme Court en banc for approval and implementation.
Aside from an increasing rate of enforcement activities through the years, IP Philippines Ong cited that copyright-based industries continue to thrive in the country such as the book publishing industry which imports American books in volumes far more than other Asian countries.