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Wednesday, March 2, 2011

Intellectual Property Rights and International Trade

Shayerah Ilias
Analyst in International Trade and Finance

Ian F. Fergusson
Specialist in International Trade and Finance

This report provides background on intellectual property rights (IPR) and discusses the role of U.S. international trade policy in enhancing IPR protection and enforcement abroad. IPR are legal rights granted by governments to encourage innovation and creative output by ensuring that creators reap the benefits of their inventions or works, and they may take the form of patents, trade secrets, copyrights, trademarks, or geographical indications. U.S. industries that rely on IPR contribute significantly to U.S. economic growth, employment, and trade with other countries. Counterfeiting and piracy in other countries may result in the loss of billions of dollars of revenue for U.S. firms as well as the loss of U.S. jobs. Responsibility for developing IPR policy, engaging in IPR-related international negotiations, and enforcing IPR laws cuts across several different U.S. government agencies.

Promoting the enforcement of IPR is an important component of U.S. international trade policy. Since the 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) at the World Trade Organization (WTO), trade policy has been used to promote enforcement of IPR abroad. The United States and several trading partners have been negotiating the Anti-Counterfeiting Trade Agreement (ACTA), which would surpass TRIPS Agreement commitments.

The United States also pursues international IPR support through regional and bilateral free trade agreements (FTAs), which often include IPR commitments by U.S. partners exceeding their TRIPS Agreement obligations. However, the May 10, 2007 bipartisan trade agreement led to a scale-back of some of the IPR requirements in the Peru, Panama and Colombia FTAs, in an effort to bolster bipartisan support for the FTAs. Other trade policy tools also are available for U.S. efforts to advance international IPR. Pursuant to Section 182 of the Trade Act of 1974 as amended (P.L. 93-618), the Office of the U.S. Trade Representative (USTR) identifies countries providing inadequate IPR protection in its annual “Special 301” report. Section 337 of the amended Tariff Act of 1930 authorizes the U.S. International Trade Commission (ITC) to prohibit U.S. imports of infringing products. Additionally, under the Generalized System of Preferences (GSP), the United States may consider a developing country’s IPR policies and practices as a basis for offering or suspending preferential duty-free entry to certain products from the country.

IPR protection and enforcement has been a focal point of legislative activity in recent sessions of Congress. In the 110
th Congress, legislation was enacted to establish a new entity to coordinate intellectual property activities within the federal government (P.L. 110-403). In the 111th Congress, legislation was introduced calling for greater U.S. international IPR enforcement efforts and increased prioritization of resources devoted to such activities (H.R. 496 and related bill S. 1466; H.R. 2410 and H.R. 2475).

Given the role of IPR in the U.S. economy and its contribution to U.S. employment and trade, IPR issues related to international trade policy may figure prominently in the 112
th congressional agenda. Congress may choose to consider whether or not FTAs are an appropriate vehicle for boosting intellectual property protection and enforcement. Congress also may balance IPR protection and enforcement with other public policy goals such as access to medicine in poor or developing countries. In addition, Congress may examine the effectiveness of the current U.S. coordinating structure for promoting international IPR support.

Date of Report: February 17, 2011
Number of Pages: 42
Order Number: RL34292
Price: $29.95

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