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 customs authorities. The United States urges Mexico to pass IPR legislation to give ex officio authority to law enforcement and customs authorities, criminalize camcording in theaters, and implement fully the WIPO Internet Treaties. The United States also encourages Mexico to make further efforts to provide adequate protection against unfair commercial use for data generated to obtain marketing approval, and improve coordination between its health and patent authorities to prevent the issuance of marketing approvals for patent-infringing pharmaceutical products. The U.S. pharmaceutical industry reports an increase in the number of marketing approvals issued in 2006 for patent-infringing pharmaceutical products. The United States also notes its concern over reports of increases in counterfeit pharmaceuticals in Mexico. The United States will continue to work with Mexico to address and resolve these IPR concerns in an effective manner.

PAKISTAN Pakistan will remain on the Watch List in 2007 and the United States will conduct an Out-of-Cycle Review to monitor Pakistan's progress. In 2006, Pakistan was lowered from the Priority Watch List to the Watch List in recognition of Pakistan's progress on IPR enforcement. However, the United States remains concerned about the lack of effective protection against unfair commercial use for data generated to obtain marketing approval, as well as the failure to codify the existing system of coordination between its health and patent authorities to prevent the issuance of marketing approvals for patent-infringing pharmaceutical products. Due to a lack of progress this year in either of these areas, the United States will conduct an Out-of-Cycle Review. The United States and Pakistan will remain closely engaged on these issues during the coming year. The United States commends Pakistan for continuing to take enforcement actions against large-scale illegal optical disc production and retail sales of pirated and counterfeit products. The United States encourages Pakistan to ensure that its authorities aggressively prosecute IPR crimes and that its courts issue deterrent sentences for pirates and counterfeiters. The United States will continue to monitor closely the IPR situation during the OCR, and will work together with Pakistan to achieve further improvements in its IPR protection and enforcement regimes.

PHILIPPINES The Philippines will remain on the Watch List in 2007. Throughout 2006, the Philippines continued to implement its Optical Media Act, including regulating the licensing of optical disc plants and coordinating raids against pirate optical disc production factories and retail establishments. The Philippines' Intellectual Property Office continued to coordinate among IPR enforcement agencies. While recognizing these continued IPR enforcement actions, the United States urges the Philippines to continue strengthening its enforcement regime against piracy and counterfeiting. Specifically, the United States encourages the Philippines to increase the numbers of arrests, prosecutions, and convictions of pirates arising out of the optical disc plant inspections; ensure that courts impose deterrent sentences against criminal IPR infringers (i.e. significant fines or prison sentences that are actually served); destroy pirated and counterfeit goods and the equipment used to make them; take steps to combat the problem of illegal textbook copying; further improve customs enforcement; take actions against television signal theft by pirate cable TV operators; and fully implement the WIPO Internet Treaties, including addressing Internet piracy. The United States urges the Philippines to maintain a patent regime that is fully consistent with its WTO obligations. The United States will continue to use the