Page:Special 301 Report 2003.pdf/27

 cases and follow through with plans to provide deterrent sentencing for IPR violators.

MEXICO

This is the first time that Mexico has been placed on the Watch List since 1999. Despite some sings of progress, the United States remains concerned that several TRIPS and NAFTA issues, including lax enforcement against copyright piracy and trademark counterfeiting, remain serious problems. In addition, a new matter that arose over the last year that generated concerns by U.S. pharmaceutical companies: the lack of coordination between Mexican health officials and the Mexican Institute of Industrial Property (IMPI) with regard to the granting of marketing approval for their products. The Ministry of Health have allowed Mexican companies to rely on the confidential test data submitted by U.S. companies without authorization from the U.S. companies. Therefore the Government of Mexico (GOM) has improperly granted marketing approval to Mexican companies copies of U.S. products. More importantly, the Ministry of Health's actions have undermined validly granted patents that were issued by IMPI. We are aware of GOM efforts to remedy this situation and will await the outcome of these efforts. If those efforts are not successful, we will analyze the situation to determine what recourse may be available under international agreements, including NAFTA. We also remain concerned that many firms complain about the difficulty they face in enforcing their trademark rights in Mexico. We note that the complaints seem almost uniformly to involve issues of process or administration, resulting, for example, some companies failing to secure their rights in well-known marks in Mexico for as many as 14 years. We hope that this situation will be properly resolved in the near term and that Mexico will provide a systematic and effective means for right holders to protect their well-known marks.

In addition, the United States has longstanding concerns that raids rarely lead to prosecutions and convictions. While we are encouraged that in the last few months Mexico has been developing legislation to classify piracy as an organized crime, and has created a special IPR prosecutor within the Mexican Department of Justice (Procuraduria General de la Republica - PGR), we are still concerned by the lack of progress in making effective use of such provisions. The copyright industries estimate losses of $731 million in 2002. We are also concerned about recent copyright amendments which were proposed which did not appear to meet international obligations, nor address implementation of the WIPO Internet Treaties. We urge the Mexican Government to: ensure that marketing approvals are not granted to infringing copies of patented products; expand its anti-piracy program to all major cities; improve investigations and raids against pirates at both levels of commercial distribution and street piracy; and encourage prosecutors to bring cases swiftly and press for deterrent sentences. We will monitor Mexico's progress on these issues in the coming months.

PAKISTAN

In 2002, Pakistan was the fourth largest source of counterfeit and piratical goods seized by the U.S. May 1, 2003