Generally, IPR enforcement at the local level is hampered by poor coordination among Chinese government ministries and agencies, local protectionism and corruption, high thresholds for initiating investigations and prosecuting criminal cases, lack of training, and inadequate and non-transparent processes. As in the past, the United States will continue to review the policies and enforcement situation in China at the sub-national levels of government.
Russia
Russia will remain on the Priority Watch List in 2010. While Russia has made some progress over the past several years in improving IPR protection and enforcement, concerns remain, particularly with respect to Russia's continued failure to implement fully its commitments in the November 2006 Bilateral Agreement on Protection and Enforcement of Intellectual Property Rights ("IPR Bilateral Agreement").
In the IPR Bilateral Agreement, Russia committed to fight optical disc and Internet piracy, enact legislation to protect against unfair commercial use of undisclosed test or other data generated to obtain marketing approval for pharmaceutical products, deter piracy and counterfeiting through enhanced criminal penalties, strengthen border enforcement, and conform its laws to international IPR norms. Russia's continued delays in fully implementing this Agreement are particularly troubling, since, with respect to several of the obligations, the IPR Bilateral Agreement established an agreed-upon deadline of June 1, 2007. While the amendments to the Civil Code and Customs Code have been introduced into the Duma they have not yet become law. Amendments to the Law on Medicines were enacted in 2010; they did not implement the provisions of the IPR Bilateral Agreement on protection of pharmaceutical test data.
The United States urges Russia to strengthen its enforcement efforts against piracy and counterfeiting, which remain major concerns. The U.S. copyright industries report significant losses due to copyright infringement, especially through online piracy, which has continued to grow. Despite the closing of some illegal websites offering pirated music, many more have sprung up in their place. In 2009, Russian law enforcement agencies conducted raids on optical disc production facilities suspected of engaging in pirate activities; however, many surprise raids are minimally effective because the date and time of pending raids is often leaked to the optical disc plant in advance. While the level of cooperation among Russian agencies in optical disc raids is increasing, the quality of raids, and the level of police expertise, is uneven nationwide. A number of factors limit the effectiveness of raids, including the monetary damages threshold required to initiate criminal actions, and the general reluctance of prosecutors to initiate criminal cases in the field of IPR, even when there is evidence of a violation of criminal code provisions.
In addition, rights holders continue to report counterfeiting of trademarked goods as a problem, especially for consumer goods, distilled spirits, agricultural chemicals, biotechnology, and pharmaceuticals.
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