On April 25, 2019, the Office of the U.S. Trade Representative (USTR) issued its 2019 “Special 301 Report” on inadequate protection and enforcement of intellectual property rights by the United States’ trading partners. USTR has issued a Special 301 Report each year since 1989 pursuant to section 182 of the Trade Act of 1974. The Special 301 Report reflects the culmination of a public comment and hearing process allowing all interested parties – domestic businesses and industries, civil society groups, trade associations, think tanks, and other stakeholders – to identify foreign countries and expose the laws, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers. The Special 301 Report and process provides an important opportunity for IP-intensive U.S. industries to highlight adverse cross-border IP rights issues and help shape the Administration’s priorities as it engages with trading partners on IP and related market access issues.
Countries that are identified as falling short with respect to protection, enforcement, and market access for IP-intensive industries are listed in the Special 301 Report in one of three ways. Countries with the most egregious acts, policies, or practices that have the greatest adverse impact on U.S. companies and products are listed Priority Foreign Countries (“PFC”). PFCs are subject to investigation and potential trade sanctions such as tariffs, quotas, or other measures. A country may not be listed as a PFC under the law if it is entering into good faith negotiations or making significant progress toward providing and enforcing IP rights. Notably, USTR may designate a country as a PFC even if