By electronic submission: Jacob Ewerdt Director for Innovation and Intellectual Property Office of the U.S. Trade Representative Washington, D.C. 2020 SPECIAL 301 SUBMISSION Submitted electronically to USTR via http://www.regulations.gov February 6, 2020 Jacob Ewerdt Director for Innovation and Intellectual Property Office of the U.S. Trade Representative 600 17th Street NW Washington, DC 20508 Re: Federal Register Vol. 84, No. 246; Request for Comments and Notice of a Public Hearing Regarding the 2020 Special 301 Review, Office of the U.S. Trade Representative Dear Mr. Ewerdt: The U.S. Chamber of Commerce is pleased to submit the attached comments for the Office of the U.S. Trade Representative’s Request for Comments and Notice of a Public Hearing Regarding the 2020 Special 301 Review. Intellectual property (IP) is critical to U.S. economic growth and competitiveness. IP-intensive industries directly employ over 45 million American workers and drive over $6 trillion in total U.S. gross domestic product (GDP). However, the benefits derived from IP-intensive industries are not limited by U.S. borders. Yesterday, the Chamber released the eighth edition of its International IP Index (also known as The Index) titled “Art of the Possible,” which shows that economies of all sizes and levels of development have a stake in IP. And though the IP Index evaluates countries on the strength of their IP laws and enforcement, the data collected also helps us understand important correlations between IP and socioeconomic benefits—from access to venture capital and foreign direct investment to high-value job creation. As a companion to The Index, this year the Chamber launched the Innovation & Creativity Access Barometer, which measures the availability of life-saving medicines, popular movies and television shows, and advanced technology to consumers around the world. We are pleased to incorporate the findings of these signature research products into our attached comments. The Chamber’s comments also discuss global trends and specific challenges in 16 markets and the European Union (EU). These countries were chosen due to market size, geopolitical significance, and severity of IP issues to U.S. industry and the global economy. The Special 301 Report shines a much-needed spotlight on inadequate IP protection and enforcement globally. We encourage the U.S. government to use this analysis, along with other available mechanisms, to secure meaningful action by our trading partners to improve their respective IP environments. The Chamber looks forward to working with the U.S. government to achieve this goal. Sincerely, David Hirschmann Executive Vice President, U.S. Chamber of Commerce President and CEO, U.S. Chamber’s Global Innovation Policy Center Myron Brilliant Executive Vice President Head of International Affairs, U.S. Chamber of Commerce Table of Contents Executive Summary .................................................................................................................................... 1 Section A: Measuring IP & Access .................................................................................................... 4 • “Art of the Possible”, The 2020 Chamber International IP Index • “Fair Value for Innovation”, The 2019 Chamber Innovation & Creativity Access Barometer Section B: Global Trends .................................................................................................................. 13 • The International IP landscape across strategic markets .................................................. 13 o Enforcement ▪ Bangladesh ▪ Taiwan ▪ Ukraine ▪ United Arab Emirates o Compulsory Licenses & Price Controls ▪ Malaysia o Online Audiovisual Content Quotas ▪ Vietnam o Forced Localization ▪ Turkey o Use of Competition Law to Curtail IP rights ▪ Republic of Korea o Resource Challenges ▪ United States • The International IP Landscape through Trade & Multilateral Organizations ................. 23 o Free Trade Agreements (FTAs) ▪ USMCA ▪ U.S. FTAs with the United Kingdom, European Union, & Japan ▪ African Continental Free Trade Area o Norm-setting Multilateral Environment ▪ International IP treaties & Patent Prosecution Highways (PPHs) ▪ Misuse of Competition Law in International Fora • The International IP Landscape in Enforcement ............................................................... 31 o Global enforcement trends ▪ Transshipment and Small Parcels ▪ Counterfeit Goods Online ▪ Illegal Diversion of Drugs ▪ Piracy Devices o Global Enforcement Priorities ▪ Enforcing Baseline Protections ▪ Increased Enforcement ▪ Voluntary Agreements Section C: Developed Market Profiles ............................................................................................. 40 • Australia ............................................................................................................................ 40 o Overview o IP Index & Barometer Scores o Patents & related rights ▪ Patent Linkage & Market-size Damages ▪ Intellectual Property Laws Amendment Bill o Copyrights & related rights ▪ Copyright Amendment (Online Infringement Act) o Trade secrets & related rights ▪ Regulatory Data Protection o Commercialization of IP assets & market access ▪ Reimbursement & Listing Uncertainty ▪ Local Content Quotas o Enforcement ▪ Ex officio authority • Canada .............................................................................................................................. 48 o Overview o IP Index & Barometer Scores o Patents & related rights ▪ Patent Enforcement & Resolution Mechanism ▪ Patent Term Restoration ▪ Patented Medicines Prices Review Board o Copyrights & related rights ▪ Online Piracy ▪ Copyright Act Review & USMCA o Trade Secrets & related rights ▪ Disclosure of Confidential Business Information o Commercialization of IP assets & market access ▪ Patented Medicines Prices Review Board (PMPRB) • Chile .................................................................................................................................. 56 o Overview o IP Index Score o Patents & related rights ▪ Compulsory Licensing ▪ Pharmaceutical-related FTA Commitments o Copyrights & related rights ▪ Online Piracy ▪ Copyright-related FTA Commitments o Commercialization of IP assets & market access ▪ Screen Quota Bill • European Union ................................................................................................................ 62 o Overview o IP Index & Barometer Scores o Patents & related rights ▪ EU Incentives Review & Orphan Medicinal Products o Copyrights & related rights ▪ General Data Protection Regulation (GDPR) • Japan ................................................................................................................................. 66 o Overview o IP Index & Barometer Scores ▪ Revisions to the Price Maintenance Premium (PMP) system ▪ Health Technology Assessment Changes • Republic of Korea ............................................................................................................. 69 o Overview o IP Index & Barometer Scores ▪ Pricing Issues ▪ Transparency and Due Process Concerns with KORUS Implementation ▪ Patent Term Restoration • Switzerland ....................................................................................................................... 73 o Overview o IP Index Score o Copyrights & related rights ▪ Copyright Amendments Section D: China ................................................................................................................................ 76 o Overview o IP Index & Barometer Scores o Innovation & industrial policy o Cybersecurity & national security ▪ Overview ▪ China’s Cybersecurity Review Regime ▪ MLPS 2.0 Standards Series (Baseline, Technical Requirements, and Evaluation Requirements ▪ Draft Measures for Data Security Management ▪ Cryptography Law ▪ Draft Measures for the Security Assessment of Cross-Border Personal Information Transfers ▪ Cloud Computing Service Security Assessment Measures o Industrial policy & patent licensing ▪ Anti-Monopoly Law (AML) ▪ Technology Transfer ▪ Technology Transfer and The U.S.-China Phase I Trade Agreement ▪ The State Council Decision on TIER and the Foreign Investment Law ▪ Compulsory licensing ▪ The Standardization Law o Other policies & trends that impact IP & Innovation ▪ 2019 IP Policy Roadmap ▪ Made in China 2025 ▪ Foreign Investment Law ▪ Corporate Social Credit System ▪ Cloud computing ▪ Patenting in Strategic Technologies ▪ Remuneration ▪ Market Access Restrictions ▪ Protection of Human Genetic Resources o Rule of Law ▪ Latest Judicial Reform Efforts ▪ Intellectual Property Courts ▪ Partial Judgments ▪ Electronic Evidence o Patents & related rights ▪ Patent Protection and Enforcement ▪ New Policies for Innovative Drugs ▪ Protection of the Graphical User Interfaces (GUI): ▪ Protection for the Invention Containing Algorithmic, Business Rules, or Methods ▪ New Policy of Patent Invalidation Proceedings ▪ Patent Linkage ▪ Data Supplementation for Patent Applications in China ▪ Patent Quality and Utility Model Patents ▪ Acceleration of the Reviews of Patent Applications o Copyrights & related rights ▪ Online Piracy ▪ Copyright Law Amendments ▪ Criminal Code Revision ▪ Liability Thresholds o Trademarks & related rights ▪ Trademark Law ▪ Damages ▪ Bad-faith Trademark Registration ▪ Quality Examination Practices ▪ OEM-related Trademark Infringement ▪ Remedies ▪ Online Counterfeiting o Design rights & related rights ▪ Design Patents o Trade Secrets & related rights ▪