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 treat India-owned IP more favorably than foreign-owned IP. The United States remains concerned, however, about actions and policies in India that appear to favor local manufacturing or Indian IP owners in a manner that distorts the competitive landscape needed to ensure the development of globally successful and innovative industries. For example, last year's Drug Price Control Order (DPCO) imposes pricing restrictions on the sale of 348 medicines, but provides exemptions from those restrictions—that is, allows them to be priced at higher levels—for certain medicines that are manufactured in India and "developed using indigenous Research and Development." In addition, as noted above, the IPAB's interpretation of Section 84 of India's Patents Act suggests that a patent could be subject to a compulsory license if it is not manufactured in India.

The United States looks forward to continuing to work with India to address these and other issues.

Russia

Russia remains on the Priority Watch List in 2014 as a result of continued, significant challenges to IPR protection and enforcement. Russia passed amendments to its Civil Code that substantially weakened protections for industrial designs and introduced confusion into the available scope of copyright exceptions and limitations.

The United States is troubled that IPR enforcement continued to decrease overall in 2013, following a dramatic decline in 2012, and remained plagued by a lack of transparency and effectiveness. Stakeholders express concern about the manufacture, transshipment and retail availability of counterfeit goods, including counterfeits of agricultural chemicals, electronics, information technology, auto parts, consumer goods, machinery, and other products. Enforcement actions combatting end user piracy have sharply declined, including a decrease in raids, initiations of criminal cases, and issuances of court verdicts.

The United States urges Russia to develop an appropriately strong, more transparent, and more effective legal framework and enforcement strategy to reduce the sale of counterfeit goods online and piracy of copyright-protected content. Counterfeit pharmaceuticals are reportedly manufactured in Russia and made available through online pharmacies. The United States notes that Russian courts issued the first two criminal convictions for online piracy this year. Both resulted in suspended sentences, and one also included a fine. It is reported that both cases required investigations of multiple years and that there is little interest in future prosecutions of this type by law enforcement officials. Russia remains home to many sites facilitating online piracy, which damage both the legitimate content market in Russia as well as third-country markets.

Russia has not issued regulations clarifying the protection against the unfair commercial use, as well as unauthorized disclosure, of test and other data generated to obtain marketing approval for pharmaceutical products. Russia has also not enacted a formal review and improvement of its collecting society system, which is nontransparent and burdensome. The United States will continue to monitor Russia's progress on these and other matters. 43