Page:Special 301 Report 1998.pdf/10



The Administration is placing 15 countries on the Priority Watch List because of the lack of adequate and effective intellectual property protection or market access in these countries is particularly troublesome to U.S. interests. The trading partners are:


 * Argentina's patent regime denies adequate and effective protection to U.S. right holders, particularly in the pharmaceutical industry. As a result, in 1997 President Clinton decided to withdraw benefits for approximately fifty percent of Argentina's exports under the Generalized System of Preferences (GSP) program. Argentina's patent law contains onerous compulsory licensing provisions and pharmaceutical patent protection will not become available until November 2000. Its law does not provide TRIPS-consistent protection for exclusive test data. There is no provision for pipeline protection or protection from parallel imports, which are long-sought U.S. objectives. An additional concern is the ruling by an Argentine court that computer software is not protected under the copyright law. This ruling contradicts the TRIPS Agreement which requires computer programs to be protected as literary works under copyright law. We are extremely concerned that a pending bill that would criminalize software piracy was substantially weakened by amendment in a Senate Committee recently and returned to the Chamber of Deputies. The amendment allows for unlimited reproduction of software by public educational entities, a provision that is clearly incompatible with international agreements. We look to the Argentine Government to obtain quick passage of this bill in its original form and to take further action to come into compliance with its international obligations.


 * Bulgaria has established a modern legal framework which should enable the Government of Bulgaria to crack down against copyright piracy. However, until recently, Bulgaria failed to take effective enforcement actions to address a rampant pirate CD and CDROM export problem. Ambassador Barshefsky announced on January 16 that Bulgaria would be identified as a priority foreign country, as early as April 1998, without substantial progress toward combating piracy. Some important progress has occurred since that announcement. On January 28, Bulgaria announced a CD manufacturing plant licensing decree to address the alarming increase in pirate CD production. Under this decree plants are not allowed to operate without a manufacturing license or without a specific license for titles that are being produced. In Washington, DC, on February 10, 1998, President Clinton and President Stoyanov announced a U.S. - Bulgaria work program. As part of this program, President Stoyanov committed to seek strict enforcement of Bulgarian legislation and strengthen cooperation among relevant Bulgarian institutions in the fight against piracy. While initial reports of Bulgaria's efforts to address pirate CD production under the plant licensing regime are encouraging, Bulgaria must demonstrate its ability to substantially eliminate copyright piracy over the long term. We will closely monitor the level of piracy in Bulgaria and review the situation in September 1998. Should Bulgaria fail to maintain significant enforcement efforts against pirate production of CDs and software compilations on CD-ROMs, it will be identified as a priority foreign country as early as September.