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 through cooperative IPR capacity-building programs to support the improvement of IP enforcement efforts in the country.

Paraguay Paraguay will remain under Section 306 monitoring in 2010, specifically with respect to its implementation of the bilateral agreement regarding IPR protection and enforcement. In 2009, the United States and Paraguay signed an extension and revision of the previous Memorandum of Understanding on Intellectual Property Rights, which will remain in effect through 2011. While Paraguay has offered assurances of continued commitment to IPR enforcement in keeping with its obligations under the revised Memorandum of Understanding, the country experienced a marked decline in IPR enforcement actions during 2009 and early 2010. Turnover in personnel and limited resources contributed to unfavorable enforcement trends, as did longstanding problems with porous borders, ineffective prosecutions of IPR infringers, and a lack of deterrent sentences. Disappointing enforcement results contrasted with progress made in the area of public awareness and the adoption of a new penal code that increased penalties for IPR offenses. To date, however, industry reports that there have been no deterrent sentences and no criminal convictions for copyright piracy. The United States has concerns about inadequate protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products, as well as shortcomings in Paraguay's patent regime. The United States will continue to work with Paraguay to address these IPR concerns during the coming year, including through the Joint Commission on Trade and Investment.

Israel On February 18, 2010, in connection with the Special 301 Out-of-Cycle Review that was extended in 2009, the United States and Israel reached an understanding on several longstanding issues concerning Israel's IPR regime for pharmaceutical products. Israel's commitments pursuant to the understanding more closely align key aspects of Israel's IPR system for pharmaceutical products with the levels of protection afforded by other countries at Israel's advanced level of development.

As part of the understanding with the United States, Israel has committed to strengthen its laws on protection of pharmaceutical test data and patent term extension, and to publish patent applications before they are granted. These developments are significant to U.S. companies,