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 SECTION I. DEVELOPMENTS IN INTELLECTUAL PROPERTY RIGHTS PROTECTION AND ENFORCEMENT

An important part of the mission of USTR is to support and implement the Administration's commitment to protect vigorously the interests of U.S. holders of intellectual property rights overseas while preserving the incentives that ensure access to and widespread dissemination of the fruits of innovation and creativity. IPR infringement, including trademark counterfeiting and copyright piracy, 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, IPR infringement endangers the public. Some counterfeit products, such as semiconductors, 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 U.S. prosperity, competitiveness, and the support of an estimated 40 million U.S. jobs that directly or indirectly rely on intellectual property-intensive industries, USTR works to protect American innovation 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 2013 and early 2014.

 Algeria – In October 2013, Algeria submitted its instrument of accession to the WIPO Internet Treaties. Adopted in Geneva in December 1996, the treaties are designed to maintain the protection of the rights of authors, performers, and producers of phonograms in the digital age. The treaties entered into force for Algeria on January 31, 2014.

China – In August 2013, the National People's Congress enacted important amendments to China's Trademark Law, including provisions to combat trademark squatting, expand protection to sound marks, permit multi-class registration, and streamline application and appeal procedures. The United States welcomes these long-sought reforms, but notes that a number of important issues not clarified in the law need to be addressed in implementing regulations that are still under development. The United States will continue to work closely with China to address these concerns as the implementing regulations are drafted, adopted, and enter into force. The United States also looks forward to pending reforms of China's patent, copyright, trade secrets, and other IP- related laws and regulations.

European Union (EU) – On November 28, 2013, the European Commission introduced a proposal for a Directive of the European Parliament and of the Council on the   10