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 growing concern and are often granted due to these constraints at the Bulgarian Patent Office. Unfortunately, a lack of coordination between investigation and prosecution authorities creates inefficiencies in the effective enforcement of IP cases, which is compounded by inadequacies in the Bulgarian judicial system. Generally, rights holders face significant delays in the adjudication of IPR disputes, many of which do not reach final sentencing, and when they do, remedies are not a deterrent to further infringements. Bulgaria's government should coordinate with rights holders and other interested parties, such as Internet service providers (ISPs), to develop recommendations for reducing Internet piracy. We also encourage Bulgaria to engage in meaningful follow-up on its Mass Software Compliance Campaign initiated by the Ministries of Culture and Interior in early 2013. Notwithstanding these continuing issues, the United States recognizes the positive steps Bulgaria has taken to address IPR infringement in its market. For example, Bulgaria has been able to engage in certain enforcement actions, including those led by the Ministry of Culture. The Ministry of Culture's Copyright Office also facilitated a royalty payment agreement between the holders of film rights and the Bulgarian Association of Cable and Communication Operators (BACCO). The United States encourages Bulgaria to continue to enhance its IPR protection and enforcement efforts and intensify its engagement on IPR public awareness. The United States looks forward to continuing to work with Bulgaria to address these and other issues.

Canada

Canada remains on the Watch List in 2014. On copyright issues, the United States welcomed the passage of the Copyright Modernization Act in June 2012. As part of Canada's implementation of this law, the United States urges Canada to implement its WIPO Internet Treaties commitments in a manner consistent with its international obligations and to continue to address the challenges of copyright piracy in the digital age. Regarding border enforcement issues, Canada re-introduced the Combating Counterfeit Products Act in October 2013 to strengthen IPR enforcement. The bill included provisions that would provide ex officio authority to Canadian customs officials to seize pirated and counterfeit goods at the border. The United States supports Canada's commitment to address the serious problem of pirated and counterfeit goods entering our highly integrated supply chains and urges Canada, as it proceeds with this legislation, to expand its scope to provide authority for its customs officials to take action against such goods in-transit. With respect to pharmaceuticals, the United States continues to have serious concerns about the availability of rights of appeal in Canada's administrative process for reviewing regulatory approval of pharmaceutical products. The United States also has serious concerns about the lack of clarity and the impact of the heightened utility requirements for patents that Canadian courts have applied recently. Under this amorphous and evolving standard, courts can invalidate a patent on utility grounds by construing the "promise of a patent" years after the patent has been granted, leading to uncertainty for patent holders and applicants and undermining incentives for investment in the pharmaceutical sector. In applying this standard, courts have invalidated a number of patents held by U.S. pharmaceutical companies, finding now that those products lack utility (i.e., not capable of industrial application), even though such products have been in the market and benefiting patients for years. The United 49