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 SECTION I. DEVELOPMENTS IN INTELLECTUAL PROPERTY RIGHTS PROTECTION AND ENFORCEMENT

An important part of the mission of the United States Trade Representative (USTR) is to support and implement the Administration's commitment to aggressively protect American intellectual property overseas. Infringement of intellectual property rights (IPR) causes significant financial losses for rights holders and legitimate businesses around the world. It undermines key U.S. comparative advantages in innovation and creativity, to the detriment of American businesses and workers. In its most pernicious forms, it endangers the public. Some counterfeit products, such as automobile parts and medicines, pose significant risks to consumer health and safety. In addition, trade in counterfeit and pirated products often fuels cross-border organized criminal networks and hinders the sustainable economic development of many countries.

Because fostering innovation and creativity is essential to our prosperity, competitiveness, and the support of an estimated 40 million U.S. jobs that directly or indirectly rely on IPR-intensive industries, USTR works to protect American inventiveness and creativity with all the tools of U.S. trade policy, including this Report.

Positive Developments

The United States welcomes the following important steps by our trading partners in 2011 and early 2012:

 Malaysia – Malaysia passed copyright amendments that significantly strengthen its protection of copyrights and its enforcement against piracy. These amendments include provisions on: preventing the circumvention of technological protection measures; establishing a mechanism for cooperation by Internet service providers (ISPs) against piracy over the Internet; and prohibiting the unauthorized camcording of motion pictures in theaters. Malaysia also established mechanisms to facilitate rights holder assistance in IPR enforcement efforts. Further, in 2011, Malaysia promulgated regulations designed to provide protection against the unfair commercial use, as well as unauthorized disclosure, of test or other data generated to obtain marketing approval of pharmaceutical products. Nevertheless, concerns remain, including concerns regarding the implementation of Malaysia's pharmaceutical data protection regulations, and regarding border enforcement, in particular with respect to transshipment. However, in recognition of Malaysia's recent improved efforts with respect to IPR protection and enforcement, the United States has removed Malaysia from the Watch List. The United States will continue to work closely with Malaysia to ensure that progress is sustained and to address our remaining areas of concern, including through the Trans-Pacific Partnership negotiations.

Spain – In recognition of Spain's recent efforts with respect to IPR protection and enforcement, the United States has removed Spain from the Watch List. The United   8