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 RUSSIA

Certain aspects of Russia's IPR regime, including its copyright law and enforcement measures, are deficient and appear to be inconsistent with the 1992 U.S.-Russian Federation Trade Agreement (Bilateral Trade Agreement) and below the standards set in the TRIPS Agreement. While Russia recognizes that it must revise its IPR laws and enforcement measures to meet TRIPS requirements, key legislation is still pending. Russia has amended its laws on trademark, appellations of origins, patents, designs for integrated circuits, plant varieties, computer software, and databases. However, Russia's Copyright Law still does not provide protection for pre-existing works and sound recordings, although on April 21, 2004, the State Duma adopted, in a second reading, a set of amendments to the Russian Copyright Law that would, among other things, provide protection for pre-existing works and sound recordings. The Russian Government is working to enact amendments to its laws on protection of undisclosed information, in particular protection for undisclosed test data submitted to obtain marketing approval for pharmaceuticals and agricultural chemicals. Serious concerns also remain about Russia's reciprocity-based system for protection of geographical indications. Russia also needs to give its courts the authority in criminal cases to order forfeiture and destruction of machinery and materials used to make pirated and counterfeit products.

Border enforcement in Russia is particularly weak. Unauthorized production and export of pirated optical media products has become a significant problem, with the number and capacity of optical media facilities rising dramatically. U.S. industry believes that many of 32 optical disc facilities are producing illegal optical discs. Industry estimates losses of over $1 billion annually as a result of this illegal activity. In addition, trademark counterfeiting remains significant and widespread, resulting in substantial losses for U.S. industry. We urge Russia to take immediate and effective steps to shut down illegal optical media plants, strengthen border enforcement, combat piracy and counterfeiting, and address deficiencies in its IPR laws. We will continue to monitor Russia's progress in these areas, including through the ongoing GSP review that was initiated by USTR in 2001.

TAIWAN

Taiwan extended its 2002 "Action Year for IPR Protection" until 2005 and has moved to strengthen enforcement, particularly against pirated optical media. The United States commends the Taiwan authorities and in particular, its enforcement authorities, for increasing the frequency and effectiveness of raids against night markets and inspections of optical media factories, which have significantly reduced the number of pirated optical media products for retail sale. These are important and praiseworthy steps. However, the IP piracy community in Taiwan appears to have adjusted to increased pressure from authorities in ways that maintain business losses due to IPR infringement at unacceptably high levels. For example, production appears to be shifting from large optical media plants to small, custom optical media burning operations. There is evidence that infringers are using non-traditional retail channels, including catalogue sales to anonymous customers for home delivery and marketing pirated products over the Internet. Serious concerns also remain over counterfeiting and border enforcement. U.S. companies report that trade in counterfeit goods continues, including increased reports of counterfeit pharmaceutical products. The United States hopes that successful implementation of recently approved laws to increase penalties for the production and importation of counterfeit pharmaceuticals will lead to the elimination of this public health threat.

Taiwan needs to make the necessary changes to its relevant laws to prevent unfair commercial use of pharmaceutical and agricultural chemical test data and to strengthen its copyright law. Although Taiwan