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 ECUADOR Ecuador will remain on the Watch List in 2007. Despite cooperation between Ecuador's enforcement authorities and the U.S. business software industry, overall IPR enforcement remains problematic, resulting in high piracy levels for the U.S. copyright industries. Ecuador has not established the specialized IPR courts required by its 1998 IPR law. Concerns also remain over Ecuador's lack of effective protection against unfair commercial use for data generated to obtain marketing approval, as well as Ecuador's lack of an effective coordination system between its health and patent authorities to prevent the issuance of marketing approvals for patent-infringing pharmaceutical products. The U.S. pharmaceutical industry also reports concerns over a growing patent backlog in Ecuador. The United States urges Ecuador to strengthen its IPR regime and to enhance its IPR enforcement efforts, and will monitor Ecuador's efforts to address IPR concerns.

HUNGARY Hungary will remain on the Watch List in 2007. Although Hungary has improved its IPR regime over the past several years, additional improvements are necessary. The United States commends Hungary for forming an Inter-Ministerial Task Force in 2006 to address IPR issues, comprising representatives from the Hungarian Government and the private sector. Copyright piracy in Hungary continues to grow, especially related to the Internet. Enforcement deficiencies include prosecutorial delays, judicial imposition of non-deterrent sentences, and weak border enforcement. The United States urges Hungary to provide an effective coordination system between its health and patent authorities to prevent the issuance of marketing approvals for patent-infringing pharmaceutical products. The United States will continue to work with the Hungarian Government to address these IPR concerns.

INDONESIA Indonesia will remain on the Watch List in 2007. Indonesia was lowered from the Priority Watch List to the Watch List at the conclusion of an Out-of-Cycle Review in November 2006. The United States commends Indonesia for its continued attention to IPR enforcement, including steps taken to fight retail piracy and to implement its optical disc regulations to combat pirate production in optical disc factories. The United States notes that following the announcement of the OCR result, Indonesia established an Information Communication Technology National Team to address legalization of government software and passed customs legislation to provide ex officio authority. The National Task Force for IPR Violation Prevention, formed in 2006, has conducted meetings but has not yet taken specific actions to combat IPR violations. The United States urges Indonesia to continue to build on its momentum by enforcing its IPR laws effectively and in a deterrent manner against piracy and counterfeiting, including: raiding pirate optical disc factories; conducting seizures of pirated goods and the machinery and materials used to make them; arresting and prosecuting IPR infringers; and ensuring that courts impose deterrent sentences for IPR crimes, including jail time, and that offenders actually serve such sentences. The U.S. copyright industries report that high piracy rates continue to exist in Indonesia. The U.S. pharmaceutical industries report that Indonesia does not provide effective protection against unfair commercial use for data generated to obtain marketing approval. The United States will continue to use the bilateral Trade and Investment Framework Agreement process to work with Indonesia to improve its IPR enforcement regime.